[Senate Hearing 105-439]
[From the U.S. Government Publishing Office]


[DOCID: f:39856.xxx]
                                                        S. Hrg. 105-439


 
    ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 1998

=======================================================================

                                HEARINGS

                                before a

                          SUBCOMMITTEE OF THE

            COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE

                       ONE HUNDRED FIFTH CONGRESS

                             FIRST SESSION

                                   on

                           H.R. 2203/S. 1004

 AN ACT MAKING APPROPRIATIONS FOR ENERGY AND WATER DEVELOPMENT FOR THE 
     FISCAL YEAR ENDING SEPTEMBER 30, 1998, AND FOR OTHER PURPOSES

                               __________

                      Department of Defense--Civil
                          Department of Energy
                       Department of the Interior
                       Nondepartmental witnesses

                               __________

         Printed for the use of the Committee on Appropriations


                               


 Available via the World Wide Web: http://www.access.gpo.gov/congress/senate


                       U.S. GOVERNMENT PRINTING OFFICE
 39-856 cc                    WASHINGTON : 1998
_______________________________________________________________________
            For sale by the U.S. Government Printing Office
Superintendent of Documents, Congressional Sales Office, Washington, DC 20402
                           ISBN 0-16-056461-1



                      COMMITTEE ON APPROPRIATIONS

                     TED STEVENS, Alaska, Chairman
THAD COCHRAN, Mississippi            ROBERT C. BYRD, West Virginia
ARLEN SPECTER, Pennsylvania          DANIEL K. INOUYE, Hawaii
PETE V. DOMENICI, New Mexico         ERNEST F. HOLLINGS, South Carolina
CHRISTOPHER S. BOND, Missouri        PATRICK J. LEAHY, Vermont
SLADE GORTON, Washington             DALE BUMPERS, Arkansas
MITCH McCONNELL, Kentucky            FRANK R. LAUTENBERG, New Jersey
CONRAD BURNS, Montana                TOM HARKIN, Iowa
RICHARD C. SHELBY, Alabama           BARBARA A. MIKULSKI, Maryland
JUDD GREGG, New Hampshire            HARRY REID, Nevada
ROBERT F. BENNETT, Utah              HERB KOHL, Wisconsin
BEN NIGHTHORSE CAMPBELL, Colorado    PATTY MURRAY, Washington
LARRY CRAIG, Idaho                   BYRON DORGAN, North Dakota
LAUCH FAIRCLOTH, North Carolina      BARBARA BOXER, California
KAY BAILEY HUTCHISON, Texas
                   Steven J. Cortese, Staff Director
                 Lisa Sutherland, Deputy Staff Director
               James H. English, Minority Staff Director
                                 ------                                

              Subcommittee on Energy and Water Development

                 PETE V. DOMENICI, New Mexico Chairman
THAD COCHRAN, Mississippi            HARRY REID, Nevada
SLADE GORTON, Washington             ROBERT C. BYRD, West Virginia
MITCH McCONNELL, Kentucky            ERNEST F. HOLLINGS, South Carolina
ROBERT F. BENNETT, Utah              PATTY MURRAY, Washington
CONRAD BURNS, Montana                HERB KOHL, Wisconsin
LARRY CRAIG, Idaho                   BYRON DORGAN, North Dakota
TED STEVENS, Alaska (ex officio)

                                 Staff

                             Alex W. Flint
                           W. David Gwaltney
                           Lashawnda Leftwich



                            C O N T E N T S

                              ----------                              

                        Thursday, March 20, 1997

                                                                   Page
Department of Energy: Atomic Energy Defense Activities...........     1

                        Tuesday, April 15, 1997

Department of Energy: Bonneville Power Administration............   105

                        Tuesday, April 22, 1997

Department of Energy: Environmental Restoration and Waste 
  Management.....................................................   157

                        Thursday, April 24, 1997

Department of the Interior: Bureau of Reclamation................   295
Department of Defense--Civil: Department of the Army: Corps of 
  Engineers--Civil...............................................   343

                       NONDEPARTMENTAL WITNESSES

California Water Resource Development Projects...................   453
California Navigation Projects...................................   549
Colorado River Basin Water Resource Development Projects.........   562
Department of Energy Research and Development Programs...........   577
Lower Mississippi River Valley Flood Control and Navigation 
  Projects.......................................................   627
New York/New Jersey Water Resources Project......................   666
Ohio River Valley Water Resource Development Projects............   678
Pacific Northwest Water Resource Development Projects............   684
Southeast U.S. Water Resource Development Projects...............   716
Southwestern U.S. Water Resource Projects........................   774
Midwest Water Resource Development Projects......................   791
Texas Water Resource Development Projects........................   828
Upper Plains Water Resource Projects.............................   839



    ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 1998

                              ----------                              


                        THURSDAY, MARCH 20, 1997

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 9:40 a.m., in room SD-124, Dirksen 
Senate Office Building, Hon. Pete V. Domenici (chairman) 
presiding.
    Present: Senators Domenici and Reid.

                          DEPARTMENT OF ENERGY

                    Atomic Energy Defense Activities

STATEMENT OF DR. VICTOR REIS, ASSISTANT SECRETARY FOR 
            DEFENSE PROGRAMS
ACCOMPANIED BY:
        KENNETH BAKER, ACTING DIRECTOR, OFFICE OF NONPROLIFERATION AND 
            NATIONAL SECURITY
        HAROLD SMITH, ASSISTANT TO THE SECRETARY OF DEFENSE FOR 
            NUCLEAR, CHEMICAL, AND BIOLOGICAL PROGRAMS

                 OPENING STATEMENT OF PETE V. DOMENICI

    Senator Domenici. The hearing will please come to order.
    Our ranking member, Senator Reid of Nevada, has indicated 
that he is going to be late, because the democratic members of 
the Senate are in a caucus. If he does not get here, and I am 
finished, we will hold the meeting open, so that he can inquire 
as he sees fit. But I believe he will be along within 30 
minutes or so.
    First, I want to welcome everyone to this hearing as we 
begin to review the Department of Energy's budget for fiscal 
year 1998.
    Today, we will take up the atomic energy defense activity's 
portion of the DOE, which includes the stockpile stewardship 
and management programs, and other defense activities, such as 
nonproliferation and national security, arms control, and 
nuclear technology, research, and development.

                    fiscal year 1998 budget program

    At the start, I want to sound a note of concern, because 
the budget request before the committee appears to be healthy. 
In fact, the fiscal year 1998 request is a better start than 
the 1997 request. But as you get into the details, below the 
gross totals, there appear to be continued erosion in core 
activities--the fundamental underpinning that is necessary to 
support the nuclear deterrent in the next century, both from a 
scientific and a manufacturing point of view.
    Large increases are included for important projects, such 
as the national ignition facility, known as NIF, and the 
tritium production and processing facilities.
    I also need to point out that function 050, the entire 
defense budget function, is severely constrained. The 1998 
budget targets for 050, of which DOE gets a portion, increased 
around $5.0 billion over the 1997 level, and the DOE budget 
increased by $2.3 billion, alone.
    Part of this is due to DOE's privatization proposal in the 
``Environmental management'' account. We are going to have to 
evaluate that in detail, as we develop the 1998 budget.
    In addition, the Congressional Budget Office has re-scored 
the outlays resulting from the fiscal year 1997 Energy and 
Water appropriations bill. They indicate that for the 050 
function, it is $5.6 billion more than estimated by the OMB, 
which means if Congress uses the CBO estimates, and if we are 
going to stay within the targets of the President's, we have to 
reduce something rather significantly.
    I say this only to highlight the major challenge that the 
subcommittee will have in formulating the recommendations for 
the defense activities for 1998. This is an area that the 
Budget Committee will be working on in an effort to address the 
defense needs in DOE and DOD.
    But, essentially, in the final analysis, the allocation 
will be made by Senator Stevens and the Appropriations 
Committee from the larger 050 amount allocated to either 
defense or other domestic discretionary programs.

                        introduction of witness

    With that, let me welcome our witnesses, Dr. Vic Reis, who 
is Assistant Secretary of Energy for Defense Programs; Mr. 
Kenneth Baker, Acting Director of the Office of 
Nonproliferation and National Security, and Dr. Harold Smith, 
Assistant to the Secretary of Defense for Nuclear, Chemical, 
and Biological Programs.
    It is a pleasure to have each of you here this morning and 
I commend you for your work. I want to particularly thank Dr. 
Reis for his special attention in the past few years to moving 
from the past era of nuclear deterrent to the new stockpile 
stewardship and management approach. We still have a long way 
to go to put into place the measures necessary to ensure the 
safety and reliability of the weapon stockpile.
    It is a very risky undertaking, and very, very difficult, 
in terms of the science and the technology. But you started us 
in the right path, and you understand the issues very well.
    We are going to hear from Dr. Reis, after which, we will 
hear the statements of Mr. Baker, and then you, Dr. Smith. Once 
the oral testimony has been completed, we will proceed with 
questions. I would ask that you try to limit your remarks, but 
this is our only occasion to hear from you. So, you have got to 
tell us the whole story.
    Your full printed statements will be made a part of the 
record.
    Please proceed, Dr. Reis.

                        statement of victor reis

    Dr. Reis. Thank you, Mr. Chairman. It is a pleasure to 
appear before you today to present the fiscal year 1998 
Department of Energy defense programs' budget.
    I will just hit a few highlights and submit my full 
testimony for the record, with your permission.
    The defense programs' budget request for next year is some 
$5 billion, of which approximately $1 billion is in the 
``Defense asset acquisition'' account, to fully fund 
construction projects.
    Full funding of construction projects is a new approach for 
the Department of Energy, but is similar to that used by the 
Department of Defense.
    On an apples-to-apples comparison with the fiscal year 1997 
budget, this would correspond to a budget request of around $4 
billion; an increase of $133 million over last year's 
appropriation.

                        defense programs mission

    Mr. Chairman, the mission of defense programs is to ensure 
the safety and reliability of the Nation's nuclear weapons 
indefinitely, without underground testing; to safely dismantle 
and store excess nuclear weapons; and to be prepared to resume 
testing and produce new nuclear weapons if the President and 
the Congress so direct.
    This is an unprecedented job, and one that involves risk, 
but we are committed to do the job and manage the risk.
    My task today is to demonstrate that the Stewardship and 
Management Program is working now, and will continue to work 
into the future.

                stockpile life extension program [slep]

    The essence of stockpile stewardship and management is the 
Stockpile Life Extension Program. Weapons in the stockpile will 
age, and the performance of these weapons may deteriorate.
    Weapon parts must be identified, replaced, and certified 
before any deterioration becomes unacceptable. For every part 
in every weapon now in the stockpile, the tools for assessment 
exist now, and are being used now, but they will not be 
sufficient in the future, as the time since the weapons' last 
underground test increases, and as experts who maintain the 
current weapons retire.
    Therefore, the Stockpile Stewardship and Management Program 
must be dynamic. It must continually improve as the job gets 
more difficult.

             nuclear weapons stockpile annual certification

    How do we know whether we are good enough now and are good 
enough in the future?
    On August 11, 1995, when the President announced that the 
United States intended to seek a zero yield Comprehensive Test 
Ban Treaty [CTBT], he stipulated six conditions for 
ratification. The last condition directed an extensive annual 
certification process that requires independent assessments 
from the directors of the nuclear weapons laboratories, the 
Commander in Chief of the U.S. Strategic Command, and the 
Nuclear Weapons Council.
    We did not wait until the CTBT was signed to start this 
process, but began immediately. I am pleased to report to this 
committee that the first of these annual reviews has been 
completed.
    A memorandum went to the President from Secretary Cohen and 
Acting Secretary Curtis, stating that the stockpile is judged 
safe and reliable, without nuclear testing.
    With your permission, I would like to place that memo into 
the record.
    Senator Domenici. It will be made a part of the record.
    Dr. Reis. Thank you.
    [The information follows:]
                      Memorandum for the President
Subject: Nuclear Stockpile Certification

    In response to Presidential direction to conduct an annual 
certification of the nuclear weapons stockpile, we have thoroughly 
reviewed the stockpile and judge it to be safe and reliable. There is 
no need to conduct an underground nuclear test at this time. Problems 
that have arisen in the stockpile, for example as a result of aging 
components, are being addressed to assure the stockpile remains safe 
and reliable. These current problems can be resolved without nuclear 
testing. In reaching this conclusion, we have obtained the advice of 
the Directors of DOE's Nuclear Weapons Laboratories, the Commander-in-
Chief, Strategic Command, the Chairman of the Joint Chiefs of Staff, 
and the Nuclear Weapons Council.

____________________________________

William S. Cohen, February 5, 1997,
Secretary of Defense.

____________________________________

Charles B. Curtis, February 7, 1997,
Acting Secretary of Energy.

    Dr. Reis. This annual certification represents a snapshot 
in time. So, you might ask: What have we done this year to give 
you confidence that the program is accomplishing its mission to 
keep the stockpile healthy forever, without underground 
testing?
    Are we, indeed, able to discover problems before they 
affect performance, replace parts and certify weapons?
    Could we return to testing and production, if need be?
    Are we dismantling weapons according to schedule?
    There are a number of examples that provide us with some 
optimism and are included in my testimony, but I would like to 
mention just a few.

                modification of the B-61 strategic bomb

    The first of these is the modification of the B-61 
strategic bomb. This modification changed the weapon so it 
could penetrate the surface of the target area, impacting the 
ground at over 1,000 times the force of gravity, yet not 
compromise its nuclear warhead.
    We accomplished this on an accelerated schedule, completing 
analysis and testing within a 14-month period, with first 
modification units going to the Air Force last December.
    When this modification program is complete, we will be able 
to retire the B-53, the oldest and largest weapon in the 
arsenal, and a weapon that lacks many of the modern safety 
features.
    What was so encouraging about the B-61 modification is that 
it used many of the elements of the Stewardship and Management 
Program, from new computer simulation capability, through 
design at the Sandia and Los Alamos Laboratories, through the 
production at Kansas City and Y-12 plants, culminating in the 
successful testing in Alaska and at the Nevada test site. Not 
the least of this success was the extraordinary degree of 
teamwork with our Air Force customer.

           accelerated strategic computing initiative [asci]

    The second example is simulation. Without new underground 
tests, the ability to certify places enormous stress on our 
ability to simulate and validate the processes occurring in 
nuclear explosions.
    Last December, the Intel/Sandia team produced a computer 
that was the world's fastest, by a factor of three. More 
importantly, that computer is now solving stockpile problems 
that simply could not have been done heretofore in any 
practical amount of time.
    For example, one complex simulation that would have taken 
74 days to run, was completed in just 7 hours.
    Both IBM with Livermore and Silicon Graphics/Cray with Los 
Alamos, have delivered installments of still faster machines, 
on which we are also making operational breakthroughs, as we 
seek to maintain the pace of the Stockpile Stewardship Program.

                   advanced experimental capabilities

    There are equivalent examples in surveillance, 
manufacturing, and science-based understanding of aging. The 
dual axis radiographic hydrodynamic test facility machine at 
Los Alamos is back on schedule, and we look forward to 
construction of the national ignition facility [NIF] at 
Livermore.
    When completed, the NIF will produce temperatures and 
pressures reached only inside an exploding nuclear weapon and 
the Sun.
    Results from the Los Alamos' Pegasus and Sandia's PBFA-Z, 
the pulse power machines, also show remarkable promise as do 
the NOVA and Omega lasers which continue to generate 
spectacular results.

                             tritium supply

    Both the accelerator and commercial light water reactor 
tritium production tracks are on schedule for a fiscal year 
1998 decision that will support a START I stockpile.
    We have established a tritium reservoir production 
capability at Kansas City, producing some 90 tritium reservoirs 
there, and have filled over 1,000 tritium reservoirs at 
Savannah River.

                         major accomplishments

    We dismantled 1,064 weapons at Pantex; completed both the 
stockpile stewardship and management programmatic environmental 
impact statement, which defines the streamlined complex of the 
future, and the Nevada test site environmental impact 
statement, which will permit us to begin crucial subcritical 
experiments.
    A detailed plan, describing what we expect to accomplish 
over the next 5 years has been completed in coordination with 
our Department of Defense colleagues. We expect to submit it to 
you shortly.

                               conclusion

    Mr. Chairman, when President Clinton announced that this 
country would seek a zero yield Comprehensive Test Ban Treaty, 
he stated that the nuclear stockpile was of supreme national 
interest to the United States, and that the Stockpile 
Stewardship and Management Program was the means to ensure that 
that stockpile will remain viable.
    Mr. Chairman, I believe that the program before you now is 
fulfilling that national imperative; and the people and the 
program are working now; and with your continued support, the 
people and the program will continue to succeed.

                           prepared statement

    Again, thank you for your attention. And, of course, we 
will be happy to answer any questions.
    Senator Domenici. Thank you very much, Dr. Reis.
    [The statement follows:]

                   Prepared Statement of Victor Reis

    Although the threat of superpower nuclear confrontation has 
receded, the United States continues to face a broad spectrum of 
national security challenges. To meet these challenges, President 
Clinton has stated that: ``The United States must and will retain 
strategic nuclear forces sufficient to deter any future hostile foreign 
leadership with access to strategic nuclear forces from acting against 
our vital interests and to convince it that seeking a nuclear advantage 
would be futile. In this regard, I consider the maintenance of a safe 
and reliable nuclear stockpile to be a supreme national interest of the 
United States.''
    Additionally, the United States Senate START II ratification text 
states that: ``The United States is committed to proceeding with a 
robust Stockpile Stewardship program, and to maintain nuclear weapons 
production capabilities and capacities that will ensure the safety, 
reliability and performance of the U.S. nuclear arsenal at the START II 
level and meet requirements for hedging against possible international 
developments or technical problems in conformance with United States 
policies and to underpin deterrence.''
    The ability of the United States to respond effectively to the 
national security challenges of the 21st century will be determined by 
the decisions we make and actions we take now. The United States has: 
agreed to the indefinite extension of the Nuclear Non-Proliferation 
Treaty, ratified START II, and signed the zero-yield Comprehensive Test 
Ban Treaty (CTBT). Once ratified by the 44 nuclear capable states, any 
nuclear weapons test explosion or any other nuclear explosion will be 
banned. At the present time 41 of the 44 states have signed the Treaty.
    Within this new strategic context the Department must continue to 
ensure the safety, security and reliability of the enduring stockpile, 
without nuclear testing. The Department will meet this national 
security challenge through the vigorous implementation of the 
integrated Stockpile Stewardship and Management program (SSMP), a 
scientific and technical challenge perhaps as formidable as the 
Manhattan Project.
    The Department's objective is to implement a program that:
  --Supports the U.S. nuclear deterrent with a safe, secure, and 
        reliable nuclear weapons stockpile, without nuclear testing, as 
        the weapons complex is reduced in size, modernized and made 
        more efficient.
  --Preserves the core intellectual and technical competencies of the 
        weapons laboratories and the manufacturing facilities; and
  --Ensures that activities needed to maintain the nation's nuclear 
        deterrent are compatible with the nation's arms-control and 
        nonproliferation commitments, including the CTBT.
    The Department recognizes the inherent risk in a program to develop 
a surrogate for underground testing. It has been over four years since 
the last nuclear test. During that time, we have successfully addressed 
an issue with the Trident I (W76) warhead by using a combination of 
analysis, new experimental data, archived test and manufacturing data, 
and most importantly the collective judgement of the two weapon design 
laboratories. This success, using the experimental and testing tools 
available today, provides confidence that the even more powerful 
computing and testing tools to be developed will allow us to solve 
future stockpile problems without nuclear testing. However, in the 
event that testing should be required, the Department will maintain the 
capability to conduct underground nuclear tests as directed by the 
President and the Congress.
    Last year the Administration committed to Congress that funding for 
Defense Programs activities would total approximately $4 billion per 
year for the next 10 years. The fiscal year 1998 request is $3.6 
billion for Weapons Activities operations and maintenance account and 
$1.5 billion for the new Defense Asset Acquisition Account for a total 
of $5.1 billion in fiscal year 1998. Of this amount, about $4 billion 
would be obligated in fiscal year 1998 with the balance obligated in 
future years against ongoing construction projects. From 1998 through 
2002, the President's budget requests $20.1 billion for Defense 
Programs activities.
    The fiscal year 1998 request allows us to build upon significant 
accomplishments during fiscal year 1996 and fiscal year 1997. DOE's 
production plants at Pantex, Savannah River, Oak Ridge, and Kansas City 
continue to support the day-to-day needs of the enduring nuclear 
weapons stockpile by making the necessary repairs and providing 
replacement parts. The Pantex plant safely disassembled 1,064 nuclear 
weapons in fiscal year 1996. We recently demonstrated through delivery 
of the first B-61 Modification 11 kits that the DOE nuclear weapons 
complex remains capable of meeting DOD requirements. Working with the 
laboratories and plants, DOE delivered the first conversion kit in late 
December 1996, meeting the accelerated schedule requested by the DOD. 
The B-61 Mod 11 will replace the B-53, which is the oldest bomb in the 
stockpile and does not have modern safety features. The dual track 
tritium program continues to make progress on the regulatory, technical 
and policy activities associated with the program. A Memorandum of 
Understanding (MOU) between the Nuclear Regulatory Commission (NRC) and 
DOE governing the interactions between the two agencies was signed in 
May 1996. Recently the Department and the Tennessee Valley Authority 
(TVA) announced plans to conduct in-reactor tests of tritium target 
rods this fall in a TVA operating reactor. The Accelerator Production 
of Tritium (APT) program selected a prime contractor, Burns and Roe 
Enterprises, Inc., and began a technical analysis of the components 
that would be used in the APT. In addition, the Secretary of Energy 
announced that the Fast Flux Test Facility (FFTF) would remain on warm 
standby for possible use in producing tritium. The action is being 
funded by the Office of Nuclear Energy. The National Ignition Facility 
(NIF) program completed Title I design of the project and the 
Department selected the Lawrence Livermore National Laboratory as the 
site for construction. The Accelerated Strategic Computing Initiative 
(ASCI) program awarded two contracts for the next generation of super 
computers and accepted delivery of the world's fastest computer, 
capable of performing over one trillion operations per second.
    The Department also completed a number of key environmental 
documents required by the National Environmental Policy Act (NEPA) 
including: the Stockpile Stewardship and Management Programmatic 
Environmental Impact Statement (PEIS); the Nevada Test Site Wide EIS; 
and the Pantex Site Wide EIS. With these documents complete, DOE can: 
begin construction of the new experimental facilities needed by the 
stockpile stewardship program; establish a plutonium pit production 
capability at Los Alamos; downsize the manufacturing complex while 
maintaining the necessary industrial capabilities to support the 
stockpile; conduct subcritical experiments at the Nevada Test Site; and 
continue to safely store plutonium pits from dismantled weapons at the 
Pantex plant.
    The Department is in consultation with the DOD, revising and 
updating the Stockpile Stewardship and Management Program (SSMP) plan, 
which describes in detail our plans for maintaining the safety and 
reliability of the nuclear weapons stockpile in the absence of 
underground testing and no new-design nuclear warheads production. We 
will provide a copy of this classified plan, known as the ``Green 
Book'' to the Congress after the Nuclear Weapons Stockpile Plan is 
signed by the President. We will continue to work closely with the DOD 
to refine and implement this plan to meet fully the requirements of the 
President's Nuclear Weapons Stockpile Plan.
Annual Certification
    A primary DOE responsibility is to annually certify the safety and 
reliability of the nation's nuclear stockpile. On August 11, 1995, the 
President announced that he would seek a zero yield CTBT. At that time 
he directed the Secretaries of Defense and Energy to advise him 
annually on the safety and reliability of the nuclear weapons 
stockpile, in order to determine whether the United States should 
continue to observe the CTBT or resume underground nuclear testing. The 
two Secretaries are to be advised by the Nuclear Weapons Council, the 
Commander of the U.S. Strategic Command, and the Directors of DOE's 
nuclear weapons laboratories on whether the stockpile is safe and 
reliable in the absence of nuclear testing.
    All active and inactive weapon types have been assessed by the 
weapons design laboratories and the DOD-led joint Project Officers 
Group. The laboratory directors and the Commander of U.S. Strategic 
Command have provided their advice to the Secretaries of Energy and 
Defense. The first annual certification was signed on February 7, 1997, 
by both Secretaries certifying to the President that the stockpile is 
``safe and reliable'' and that ``there is no need to conduct an 
underground nuclear test at this time.''
                    stockpile management activities
    The Stockpile Management Program continues its historic 
responsibilities to provide near term and long term support for the 
stockpile, and for ensuring an adequate supply of tritium. It also 
includes new programs and procedures to deal with the aging stockpile, 
which has an average age of 14 years. Along with stockpile 
surveillance, the historic responsibilities include: normal 
maintenance; corrective maintenance and system refurbishment; and 
weapon dismantlement.
    Almost 50 years of stockpile history have shown that continuous 
surveillance, repair, and replacement of components and subsystems are 
commonplace. In fact, the nine weapons types that will comprise the 
START II stockpile have already been retrofitted to varying degrees and 
some have had major components of the nuclear warhead replaced. At the 
present time, we cannot predict with any certainty when stockpile 
problems will arise in the future, but we are addressing these issues 
through our Stockpile Stewardship and Management Program. The 
Department is carrying out the recommendations of the 1996 GAO report 
on nuclear surveillance activities. At the requested funding level, our 
goal is to eliminate most backlogs in flight and laboratory tests 
within two years and all backlogs prior to the end of fiscal year 2000.
Role of the Production Plants
    The production plants at Savannah River, Pantex, Kansas City, and 
Oak Ridge are essential components to the success of Stockpile 
Stewardship and Management. The Department's approach to maintain these 
key industrial facilities is detailed in the final PEIS on Stockpile 
Stewardship and Management and supported by the Secretary of Energy's 
Record of Decision issued on December 19, 1996. While ongoing 
production activities at the plants will help maintain production 
skills, to attract and retain the next generation of technicians DOE is 
establishing a fellowship program at the plants. The plants have been 
directed to identify prioritized needs for the fellowship program. 
Their responses are due by mid-April 1997. None of the funds will be 
obligated until the report required by section 3166 of the Fiscal Year 
1997 Defense Authorization Act is provided to the Congress.
    In fiscal year 1997 the four plants will continue to produce the 
replacement parts and make the necessary repairs to support the 
enduring nuclear weapons stockpile. One of the most significant 
accomplishments was the accelerated delivery of the conversion kits 
from the Kansas City and Oak Ridge Y-12 plants for the B61 modification 
11 program. The B61 modification 11 satisfies the mission requirements 
of the B53 gravity bomb. The B53 is the oldest weapon in the stockpile 
and does not meet modern safety design criteria. All B53's will be 
retired shortly. DOE plans to begin dismantlement of this system by 
fiscal year 1999.
    In fiscal year 1998 DOE expects to demonstrate a limited plutonium 
pit production capability at Los Alamos, a capability the DOE has not 
had since the closing of the Rocky Flats plant in 1992. In 
reestablishing war reserve support capability, DOE plans to manufacture 
a Trident II (W-88) pit in fiscal year 1998, a Peacekeeper (W-87) pit 
in fiscal year 2000 and a B61 bomb pit in fiscal year 2002. A larger 
pit production capacity will be in place by fiscal year 2003.
    Although there will be downsizing of the production plants 
commensurate with the needs of a smaller stockpile, none of the plants 
will be closed. The Strategic Management Restructuring Initiative 
(SMRI) will support implementation of the Department's decision to 
downsize in place. The SMRI program involves downsizing the following 
operations: (1) the weapons assembly/disassembly and high explosives 
missions at Pantex; (2) nonnuclear components production at Kansas 
City; (3) weapons secondary and case fabrication at Oak Ridge Y-12; and 
(4) consolidation of tritium operations at Savannah River. We will also 
reestablish pit component fabrication at Los Alamos. The DOE will make 
use of existing facilities at the sites which will be upgraded, 
repaired and or modified to meet current environment, safety and health 
requirements. DOE will, through section 3161 of the fiscal year 1993 
National Defense Authorization Act, mitigate the impacts of downsizing 
on the affected workers and communities.
Enhanced Surveillance
    Enhanced Surveillance is an integrated program involving the four 
production plants and the three weapons laboratories. In this program 
we will develop the predictive measures to address the maintenance 
needs of the stockpile. The basic goals of the program are: to predict 
in advance defects that might develop in the enduring stockpile due to 
aging or other reasons; develop a means to assess the safety and 
reliability impacts; and to ensure that problems are corrected before 
they reduce safety or reliability of the stockpile. The Enhanced 
Surveillance Program (ESP) builds upon existing Defense Programs' 
research and development activities, nonnuclear testing, nondestructive 
evaluation/surveillance activities and will develop new predictive 
models, new techniques for data analysis, and offers the possibility of 
in-situ, real time, non-destructive monitoring for warheads.
    The ESP focuses on six major areas: (1) materials characterization 
and surveillance; (2) materials aging model development; (3) component 
surveillance and diagnostics; (4) component performance models; (5) 
enhanced systems testing; and (6) system performance models. The 
surveillance techniques, procedures, and models developed in this 
program will be incorporated into the ongoing core surveillance program 
when we are confident of their validity. With these new tools, our 
program of stockpile surveillance will emphasize prediction and 
preventive maintenance.
    The ESP is a logical step between the traditional surveillance 
program and the anticipated weapons refurbishment requirements. It will 
be closely coordinated and integrated with the Stockpile Life Extension 
Program, the Accelerated Strategic Computing Initiative, and the 
Advanced Manufacturing Design and Production Technology programs.
Stockpile Life Extension Program (SLEP)
    The mission of the SLEP is to ensure continued high confidence in 
the performance, safety and reliability of the nuclear weapons 
stockpile while exercising the infrastructure and intellectual 
capabilities needed to sustain the weapons as a credible deterrent. The 
SLEP is a new DOE maintenance management strategy that will 
continuously focus the design and manufacturing activities required to 
maintain all of the stockpile warheads in a safe and reliable 
condition. The SLEP establishes the activities needed to meet nuclear 
weapon stockpile commitments to DOD, and provides the basis for 
coordinating stockpile activities between DOE and DOD. It builds on and 
enhances past practices to maintain a viable nuclear weapons stockpile. 
Detailed schedules for each weapon are being developed through weapon-
specific DOD/DOE Project Officer Groups.
    The underpinning concept for the SLEP is ``all components of a 
nuclear weapon are limited life components.'' The SLEP focuses and 
prioritizes the efforts of the weapons complex. The Enhanced 
Surveillance program will provide data to better understand material 
and component aging phenomena and determine the Life-limit of 
components and materials. This in turn provides the needed information 
to determine a life extension program and sustain a safe, reliable 
stockpile to meet DOD performance requirements.
    The SLEP integrates stockpile management activities and establishes 
requirements and priorities to support budget and workload planning. 
These activities to support the stockpile are embodied in four key 
functions: maintenance, surveillance, assessment and certification, and 
refurbishment. The underpinning activities for these functions rely on 
science and modeling based capabilities and our ability to manufacture 
a reliable product.
Advanced Manufacturing, Design and Production Technology (ADaPT)
    The Advanced Manufacturing, Design and Production Technologies 
Initiative will provide the nuclear weapons complex with advanced 
capabilities for: designing, developing, and certifying components and 
systems; and producing, assembling, and delivering the components and 
systems products. Over the next decade ADaPT will radically change how 
DOE supports the nuclear weapons stockpile by infusing new product and 
process technologies, and adopting state-of-the-art business and 
engineering practices. The funding from this program to the plants and 
laboratories addresses enterprise modeling, product realization, and 
model-based design and manufacturing. An example of the work done under 
this program is the development of a laser-cutting workstation for 
application to weapon remanufacturing. In fiscal year 1997, the ADaPT 
program will be integrated with existing efforts in Process Development 
at the production plants, and will be continued at essentially the same 
level of effort in fiscal year 1998.
Dual Revalidation
    Dual Revalidation is a new, robust form of peer review designed to 
assure both DOE and DOD that the stockpile remains safe, secure, and 
reliable. Under Dual Revalidation, two teams perform independent 
evaluations, the first team drawn from the original design laboratory 
and the second team from the alternate laboratory. Using archived data 
and performing nonnuclear tests, teams will analyze and evaluate 
stockpiled weapons, weapons components, and weapons materials to 
determine if they still meet military requirements. Dual Revalidation 
provides a baseline assessment of the condition of the warhead today 
and a process to identify future problems. The evaluation is managed by 
the joint DOD/DOE Project Officers Group and is expected to take 2-3 
years for each warhead type. The W-76 is the first warhead currently 
undergoing revalidation. The increased involvement in and technical 
understanding of the assessment process by the DOD will provide a basis 
for their confidence in the stockpile, which was previously supplied by 
nuclear testing. This new process will revalidate that the stockpile 
meets its specifications delineated in the Military Characteristics 
(MCs) and Stockpile-to-Target Sequence (STS).
Tritium
    An integral part of ensuring a viable stockpile is the capability 
to provide an adequate supply of tritium, a radioactive gas required 
for all U.S. nuclear weapons to operate as designed. Tritium, with a 
half life of 12.3 years, decays at a rate of 5.5 percent per annum. To 
meet current stockpile requirements, the Department is recycling 
tritium from retired and dismantled weapons. To support the Nuclear 
Weapons Stockpile Plan (NWSP) approved by the President on March 11, 
1996, a new tritium production source will be needed as early as 2005 
to maintain the START I stockpile and the associated 5-year tritium 
reserve, and to maintain the ability to ``hedge'' to START I even when 
the START II treaty enters into force.
    The Department continues to make progress on a dual track tritium 
strategy for developing a reliable source of tritium to meet national 
security requirements. One track includes the purchase of a commercial 
reactor or irradiation services. The other track requires the 
development and testing of an accelerator for the production of 
tritium. In addition, the FFTF is being kept on warm standby for 
possible contribution to meeting tritium needs. The funds for this 
action is provided by the Office of Nuclear Energy. By late 1998 the 
Department will have demonstrated all major aspects of the accelerator 
technology and the use of tritium producing rods in a commercial light 
water reactor. The procurement process will be structured so that a 
contract could be placed to either purchase irradiation services or 
purchase or lease a reactor. Based on these activities, DOE will have 
refined the cost estimates for both programs. By the end of 1998, the 
Department, in consultation with the DOD and OMB, will select one of 
these alternatives as the primary tritium production method. The other, 
will comprise an assured backup capability. In an attempt to meet 
congressional concerns about tritium supply, Secretary Pena has 
promised to review the dual track time line. If the decision cannot be 
accelerated to 1997, DOE will notify Congress consistent with section 
3133 of the fiscal year 1997 National Defense Authorization Act. The 
dual track approach has the support of the Nuclear Weapons Council.
    There are no serious technical issues associated with the 
production of tritium in a light water reactor, but there are 
regulatory and licensing steps to be taken. The Department and the 
Nuclear Regulatory Commission (NRC) signed a Memorandum of 
Understanding last May governing the interaction between the two 
agencies for target qualification and NRC reactor licensing activities. 
On February 7, 1997, the DOE announced that the TVA Watts Bar Nuclear 
Plant 1 was selected as the host utility for the Lead Test Assembly. 
The Watts Bar test involves placement of 32 specially designed twelve-
foot ``target'' rods into four of the nearly two hundred regular fuel 
assemblies in the plant's reactor core. These targets, which contain no 
uranium or plutonium, are designed to replace a standard component of 
reactor fuel assemblies. During the plant's normal 18-month operating 
cycle, the rods will produce and retain small amounts of tritium. 
Following the test, the rods will be shipped by DOE carrier to the 
Pacific Northwest National Laboratory for disassembly and examination.
    Previously, DOE has tested smaller rod segments in one of its test 
reactors with excellent results. The Watts Bar test is intended to 
confirm those results using rods of the same length as those now 
typically used in commercial reactors. Additional target qualification 
studies are needed to support regulatory and owner approval for their 
use in commercial reactors.
    The Department has issued a Draft Request for Proposals (RFP) for 
the purchase of one or more commercial light water reactors or 
irradiation services. A final RFP is scheduled for release in April 
with utility responses due in June. The DOE expects to make a 
preliminary selection of one or more utilities early in 1998.
    With regard to the accelerator alternative, there are several 
features and portions of the technology that need to be demonstrated at 
production power levels and the cost of design, construction and 
operations needs to be refined. The exploration of the accelerator 
concept includes: a development effort to select between technical 
alternatives; testing to establish performance and reliability; the use 
of industry for conceptual and engineering design and, if built, 
construction and commissioning. These efforts will narrow the design, 
cost and schedule uncertainties.
    Last year the Department selected a prime contractor, Burns and Roe 
Enterprises Inc., teamed with General Atomics to add to the Los Alamos 
and Savannah River team. Los Alamos has completed the construction of 
the first test items for the accelerator and others are being 
manufactured. The first of the accelerator components, an injector, is 
being tested and exceeding performance specifications. Thousands of 
samples of materials, welds, and structures have been or are being 
irradiated to confirm choices and projections of performance for 
materials for the so-called ``target-blanket'' the part of the plant in 
which the tritium would actually be made. First results of these tests 
are currently being analyzed. The design of the accelerator has been 
favorably reviewed by two external review groups. The combined team has 
produced a Draft Conceptual Design report and an associated cost 
estimate, which is under intense review by the prime contractor and the 
Department. The Department is on track for issuing a final Conceptual 
Design Report in April of this year. We have made excellent progress on 
the schedule, and with the increased funding in fiscal year 1996 and 
fiscal year 1997 provided by the Congress. We have been able to advance 
some of the technology demonstrations, which are key to proving the 
concept and making an informed decision in late 1998.
Transportation of Special Nuclear Materials
    The transportation of special nuclear materials remains an 
important element of stockpile management as a result of weapons 
dismantlement and the restructuring and consolidation of military bases 
in the United States. The Department provides for the transportation of 
special nuclear materials, nuclear weapons, and weapons components 
throughout the continental United States via specially designed safe, 
secure tractors and trailers (SST's).
    The Department has accumulated more than 83 million miles of over-
the-road experience with no accidents causing a fatality or release of 
radioactive materials, and without damage or compromise of the cargo. 
Much of this can be attributed to the well managed, highly trained, 
competent, and dedicated work force of more than 260 couriers with 
nationwide secure communications. In addition, largely due to our 
specialized in-house training capability, the nuclear material couriers 
are one of the most highly effective protective forces in the world. 
Seventeen new trailers called Safe Guard Transporters (SGT), 
incorporating the latest advances in materials and transportation 
technology, are currently being built at the Kansas City Plant.
Dismantlement
    Since the end of World War II, the Department and its predecessors 
have disassembled some 55,000 nuclear warheads in a safe, secure, and 
an efficient manner. In fiscal year 1996, 1,064 weapons were dismantled 
at the Pantex Plant. We expect to dismantle the 944 nuclear weapons in 
fiscal year 1997 and 1,200 weapons in fiscal year 1998. The Pantex 
dismantlement workload is expected to remain stable for the next few 
years as we reduce the nuclear stockpile consistent with our arms 
control commitments.
Emergency Response
    The Emergency Response program is a national capability that 
provides critical technical expertise necessary to resolve any major 
radiological emergency or nuclear accident within the United States and 
abroad. The all-volunteer force that makes up the cadre of deployment 
forces is mostly from the nuclear weapons laboratories.
    While a nuclear weapon accident is extremely unlikely, we are 
prepared to effectively mitigate the consequences of an accident. We 
are in the final planning stages for a full field training exercise 
scheduled for late May, where, for the first time ever, the DOE will 
exercise its responsibilities as the lead federal agency in providing 
command and control as well as the necessary technical expertise to 
resolve the accident.
    The Department plays a vitally important support role in combating 
acts of nuclear terrorism, through its Nuclear Emergency Search Team 
(NEST). NEST provides the FBI with the operational and technical 
assistance in response to a terrorist nuclear or radiological dispersal 
threat in the United States, and supports the State Department in a 
similar role overseas. We have vigorously pursued updating this program 
based on the available intelligence to counter the current nuclear 
threat and trends in these activities. Our present and near term 
activities include continuance of in-depth contingency planning, 
rigorous training, a challenging interagency exercise program, and 
pursuit of much needed improvements in the areas of nuclear search, 
diagnostics, device assessment, and disablement capabilities.
                         stockpile stewardship
    The Stockpile Stewardship program addresses the issue of 
maintaining confidence in stockpile safety and reliability without 
nuclear testing through a technically challenging science-based program 
utilizing upgraded or new experimental and computational capabilities. 
The program continues major initiatives in high energy density research 
with lasers and accelerated research and development in advanced 
computations to acquire and use data to improve predictive 
capabilities--the foundation of the science-based approach. Major new 
experimental facilities are planned to expand and enhance the 
scientific and engineering base for stockpile stewardship, and to 
assure that we can continue to attract and retain the high quality 
personnel needed to make the scientific and technical judgements 
related to the safety and reliability of the stockpile in the absence 
of underground nuclear testing.
    The highly qualified laboratory staffs continue to make valuable 
contributions to solving scientific problems using knowledge and 
technologies from the weapons programs. One example is a program called 
Peregrine. Based on the computer codes developed by the weapons labs to 
show how radiation affects materials, Peregrine promises to provide the 
medical community with a more efficient and effective method of 
administering radiation therapy to cancer patients. Research is 
conducted in collaboration with Stanford University, Memorial Sloan-
Kettering Cancer Center, Harper Hospital (Detroit) and other cancer 
research centers. Peregrine with its enhanced modeling and computing 
capability is expected to provide more precise and successful treatment 
of complicated tumors around eyes, sinuses, neck, mouth and in and 
around the lungs. We are discussing with the DOD the possibility of 
providing this technique to cancer patients in military hospitals. 
Peregrine will continue to benefit from computing advances made by the 
ASCI program.
Advanced Experimental Capabilities
    The proposed National Ignition Facility (NIF) is designed to 
produce, for the first time in a laboratory setting, conditions of 
temperature and density of matter close to those that occur in the 
detonation of nuclear weapons. The ability to study the behavior of 
matter and the transfer of energy and radiation under these conditions 
is key to understanding the basic physics of nuclear weapons and 
predicting their performance without underground nuclear testing. 
Experiments at the NIF will provide data essential to test the validity 
of computer based predictions and demonstrate how aged or changed 
materials in weapons could behave under these unique conditions. Two 
JASON panels, which are comprised of scientific and technical national 
security experts, have stated that the NIF is the most scientifically 
valuable of all programs proposed for science-based stockpile 
stewardship.
    The NIF project currently has about 300 persons involved in design 
and project-specific research and development. Title I design work for 
the facility is now complete. During the Title I process the design was 
refined for the Lawrence Livermore site with additional experimental 
capabilities added. This has increased the total project costs by 
$125.3 million. NIF will now be constructed so that the first bundle of 
eight lasers will be available for experiments two years before the 
project is complete. The project will begin site preparation work in 
fiscal year 1997 which will allow major construction to begin in fiscal 
year 1998 and project completion by the third quarter of fiscal year 
2003.
    The fiscal year 1998 budget request includes $31 million in 
operations and maintenance funds for NIF. These funds will enable 
industry to produce components (optics) for NIF. The fiscal year 1998 
budget also requests $876 million, full funding for NIF construction 
under the Defense Asset Acquisition Account, though the planned 
obligations during fiscal year 1998 will only be $198 million. The 
balance of the funds will be obligated annually throughout the 
construction period until project completion in fiscal year 2003.
    Current hydrodynamic testing facilities, the Pulsed High Explosive 
Radiographic Machine Emitting X-rays (PHERMEX) at the Los Alamos 
National Laboratory (LANL) and the Flash X-Ray facility (FXR) at 
Lawrence Livermore National Laboratory (LLNL), were adequate to meet 
the challenges of stockpile stewardship in conjunction with nuclear 
testing. In the absence of nuclear testing, however, more capable 
hydrodynamic testing facilities such as the Dual Axis Radiographic 
Hydrodynamic Test (DARHT) Facility are needed. Through its dual-axis, 
multi-time viewing capability, the DARHT facility will provide crucial 
experimental data on many of the warheads in the stockpile and will 
directly support performance and safety revalidation, enhanced 
surveillance, and an improved predictive capability. Furthermore as the 
most capable hydrodynamic testing facility in the complex, the DARHT 
facility will play a central role in developing advanced technologies 
for a potential next-generation Advanced Hydrodynamics Test Facility. 
Construction on DARHT was resumed last May following dissolution of the 
federal court injunction which had halted all actions associated with 
the facility. The fiscal year 1998 request for DARHT totals $46 
million: $22 million to complete construction of the first arm of the 
facility and the balance to complete the engineering and design of the 
second arm.
    The Atlas facility, to be constructed at Los Alamos National 
Laboratory, is another new experimental facility needed by the 
stockpile stewardship program. The facility provides a pulsed power 
experimental capability to address primary and secondary weapons 
physics in an energy rich, high energy density environment. 
Construction of Atlas is scheduled to begin later this year. The fiscal 
year 1998 budget includes $14 million. The funds will be used to 
continue long lead procurement, complete building modifications, and to 
install Atlas pulsed power equipment.
    The Los Alamos Neutron Science Center (LANSCE), while not a new 
facility, is the most powerful neutron research facility in the world, 
providing an intense source of pulsed neutrons for experiments 
supporting national security and civilian research. Neutrons are unique 
and valuable probes of matter on scales ranging from the subatomic to 
complex materials. At low energies, neutrons are used to study many 
critical weapons materials issues. At higher energies, neutrons probe 
the small-scale structure of atomic nuclei, which is important for 
studies of nuclear weapons processes. At the very highest energies, 
neutrons can penetrate very thick materials providing unique 
surveillance capabilities. This capability will be important in 
supporting the enduring stockpile and anticipating rather than reacting 
to problems in the stockpile.
Accelerated Strategic Computing Initiative (ASCI) Computations and 
        Information Management.
    The Accelerated Strategic Computing Initiative (ASCI) and Stockpile 
Computing is a key element of the SSMP that will provide the critical 
advanced simulation tools needed for ongoing and future certification 
and assessment of the safety and reliability of the weapons in the 
stockpile. These tools will support weapons designers and analysts who 
will use them to certify and assess the safety and reliability of the 
nuclear weapons. The future role of simulation has already been 
demonstrated in the assessment of the W76 issue.
    Aging issues drive the size of the simulation capabilities 
required. During the design phase for the weapons in today's stockpile, 
limitations in simulation and computing were overcome by keeping the 
designs consistent in 2 dimensions and through the extensive use of 
underground testing. We already know that the aging issues we will 
encounter will not be so accommodating. Cracks, gaps and material 
degradation are 3D effects which will require significantly more 
simulation capabilities that previously existed. A simple calculation 
of the computing power needed to support 3D, additional resolution, 
more complete physics simulation shows that a computer running at well 
over 100 trillion floating points operations per second (TeraFLOPS) is 
required.
    In addition, this level of simulation capability will be required 
in the 2004 time frame to allow ``test-based'' weapons analysts to 
validate that the simulations accurately reflect the ``real world''. 
The 2004 time frame is critical because that is when we will have lost 
half of the current ``test-based'' designer and analyst capability. 
These designers and analysts are considered ``master craftsmen and 
women'' who have earned that status by learning and understanding 
scientific issues associated with nuclear weapons and then checking 
themselves with an extensive program of underground tests. They are 
``masters'' at using a tool set (which included underground testing) to 
certify weapons and assess safety and reliability issues. With the loss 
of underground testing, these ``masters'' are now required to continue 
to do their jobs of certification and assessment with a new tool set, 
in which a major component will be large scale, complex simulations. It 
is critical that this group of designers and analysts validate that the 
new simulation tools allow them to continue to have confidence in the 
weapons even in the absence of underground testing.
    While the simulation capabilities provided by ASCI in the near-term 
will significantly improve our ability to certify and assess weapons 
without testing, at least 100 TeraFLOPS are required before full system 
performance and safety simulation are possible. This level is a 
critical threshold needed for validation. The simulation capabilities 
in excess of 100 TeraFLOPS are required before the simulation tools are 
robust enough to be meaningful, and these ``robust'' tools must be 
available by 2004 so that the Department can make a smooth transition 
away from ``test-based'' certification and assessment. The Accelerated 
Strategic Computing Initiative (ASCI) is designed to provide this level 
of simulation capabilities in the time frame required.
    With the increased funding provided by the Congress in fiscal year 
1997, we are initiating work on at least 3 additional aging codes 
focussed on critical weapon initiation sequences, expanding joint work 
with the computer industry to fund large scalable memory capability on 
Option Red (1 TeraFLOPS) and Option Blue (3 TeraFLOPS) computers, and 
by increasing alliances with universities. The fiscal year 1998 program 
growth of $53.2 million will be used to sustain this momentum by 
executing activities in the current program plan, including critical 
performance and safety code development activities and pushing the 
capabilities of computer hardware.
    We also have seen some significant achievements in simulation in 
fiscal year 1997. This year has seen the delivery of the largest 
computer in the world to support Stockpile Stewardship. On December 4, 
1996 the Intel Corporation broke the long standing 1 TeraFLOPS barrier. 
This and the follow-on computers are intended to move the simulation 
capabilities to the 100 TeraFLOPS level by 2004. ASCI code development 
has also shown a great deal of promise. Even though ASCI is only one 
and one half years old, the eleven code projects have made significant 
progress moving the simulations from 2D to 3D and on to parallel 
computers. This has lead to a better understanding of the challenges 
involved with simulation of aging and re-manufactured weapons.
    The ASCI simulation capabilities will link the experimental data 
from the Aboveground Experimental facilities (AGEX), archival nuclear 
test data, and improved scientific understanding to provide high-
confidence predictive simulation capabilities needed to support 
decisions about the enduring stockpile. ASCI and Core Computations and 
Modeling supports another element of SSMP, the Stockpile Life Extension 
Program (SLEP), by providing simulation capabilities needed to predict 
requirements for replacement of aged components and to ensure that 
those replacements do not introduce new problems into the stockpile. 
Finally, ASCI complements and accelerates the ongoing efforts of the 
Defense Programs core research program for advances in physics, 
material sciences, and computational modeling. ASCI's computational 
advances will benefit other applications including: global climate 
modeling, medical and drug design each improving the quality of life.
    Core Computations and Modeling are the activities, principally at 
the three weapons laboratories, that address current stockpile 
operational and maintenance requirements. We will provide clear, 
effective and integrated planning to incorporate the new capabilities 
developed through ASCI into the central stockpile computing 
environment. As the Stockpile Stewardship PEIS and the Stewardship 
Management Plan are implemented, we will develop a Defense Programs 
Information Architecture to meet current and future needs. This 
architecture will be integrated with the DOE, DOD and other information 
systems.
Test Readiness
    President Clinton established a set of Safeguards under which U.S. 
adherence to the Comprehensive Test Ban Treaty is conditioned. These 
safeguards include maintenance of the basic capability to resume 
nuclear testing activities should the United States deem it necessary. 
To this end, the Department maintains the necessary infrastructure of 
the Nevada Test Site and the specialized facilities, equipment and 
skilled personnel required for nuclear testing. The Department has 
requested $157 million in fiscal year 1998 to maintain test readiness. 
The safe execution of a nuclear test requires a complex series of 
operations that exercise several areas of expertise including: nuclear 
explosive design and fabrication; diagnostic instrument design; 
emplacement and calibration; radioactive material containment; timing 
and firing, data recording, etc. Certification of the personnel and 
equipment to accomplish these operations will be assured by a number of 
ongoing and planned experimental activities utilizing both the Nevada 
Test Site and weapon laboratory facilities. The majority of these 
nuclear test-related operations, however, will be exercised through the 
Department's subcritical experiments at the NTS.
    Subcritical experiments use high explosives to evaluate nuclear 
weapon materials (such as plutonium) by studying their behavior under 
extreme pressure conditions. The experiments are designed so the 
nuclear material will remain subcritical. In other words, there will be 
no self-sustaining nuclear chain reaction created and, thus, they are 
consistent with the Comprehensive Test Ban Treaty (CTBT). These 
experiments will provide currently scarce empirical data on the high 
pressure behavior of weapon materials, realistic benchmark data on the 
dynamic, nonnuclear behavior of components of today's stockpile, the 
effects of remanufacturing techniques, the effects of aging materials, 
and other technical issues. Improving our basic knowledge of the 
science of plutonium through these experiments is an essential part of 
our program of stockpile stewardship without nuclear testing. The 
Department is planning to conduct two of these subcritical experiments 
in fiscal year 1997 and expects to conduct four experiments in fiscal 
year 1998.
    In the interest of transparency and building public confidence, the 
Department requested the JASON's to review the first two planned 
subcritical experiments and the results of the Department's internal 
evaluations of their potential for criticality. The JASON's have 
completed their review and stated that: ``These particular experiments 
will add valuable scientific information to our data base relevant to 
the performance of our nuclear weapons, and that there is no 
conceivable scenario in which these experiments lead to criticality. 
Therefore these experiments are consistent with the provisions of the 
CTBT signed by President Clinton on September 24, 1996.''
Technology Transfer
    The technology transfer program is designed to advance a broad 
range of critical weapons core competencies by leveraging the vast 
resources of the private sector, to cost share the development of the 
best, most efficient, and affordable technologies needed to meet the 
objectives of the Stockpile Stewardship and Management program. The 
majority of the activities are partnership called Cooperative Research 
and Development Agreements (CRADA's) which have been selected on the 
basis of their contribution to the advanced technology needs of the 
weapons complex. These technology partnerships are supportive of a 
number of Defense Programs Initiatives including the ADaPT and ASCI.
    In fiscal year 1997 Congress provided an additional $10 million for 
Technology Transfer activities with direction to increase efforts in 
support of the American Textile Partnerships (AMTEX) and the Advanced 
Computational Technology Initiative (ACTI) partnerships. We also plan 
to support AMTEX at $10 million and ACTI at $5 million in fiscal year 
1997. We plan to support the Partnership for a New Generation of 
Vehicles (PNGV) program at approximately $10 million through the use of 
prior year balances and Weapons Support Agreements. The fiscal year 
1998 budget continues these activities at the following levels: AMTEX--
$5.5 million, ACTI--$12 million and PNGV--$7.5 million.
                    fiscal year 1998 budget summary
    The Defense Programs request for fiscal year 1998 totals $5.1 
billion, of which $3.6 billion is for Weapons Activities operation and 
maintenance account ($1.4 billion for stockpile stewardship, $1.8 
billion for stockpile management and $303 million for Program 
Direction). The Defense Programs is also requesting $1.5 billion for 
the Defense Asset Acquisition account, including $1,034.2 million for 
the transition to full construction funding. Overall, the Defense 
Programs request represents an increase of $1.2 billion above the 
fiscal year 1997 appropriation. The increase is entirely for 
construction of new facilities and is primarily due to the inclusion of 
full funding in the fiscal year 1998 request. Without the required 
budget authority to fully fund construction projects, the fiscal year 
1998 funding level would be $4.0 billion, a 3.4 percent increase over 
the fiscal year 1997 appropriation.
    Beginning in fiscal year 1998, Defense Programs will be funded from 
two appropriation accounts: (1) Weapons Activities Operations and 
Maintenance; and (2) the Defense Asset Acquisition. This change is 
consistent with the Administration's creation of Defense Asset 
Acquisition accounts across DOE to improve Department-wide planning and 
decision making for asset acquisition. This new account provides 
obligational authority for expenditures on all current year 
construction projects, as well as providing ``up front'' budget 
authority for new projects. This approach will promote more effective 
project planning, budgeting, and management by helping to ensure that 
all costs and benefits are evaluated when decisions are being made 
about providing resources. In fiscal year 1998, the transition year, 
budget authority is requested to complete all ongoing projects begun in 
prior years. The transition to up front budget authority does not 
affect the annual obligations profile or anticipated outlays.
                             120 day study
    Section 3140 of the Fiscal Year 1997 National Defense Authorization 
Act and Section 302 of the Fiscal Year 1997 Energy and Water 
Development Appropriation Act requires the Secretary of Energy to 
develop a plan to reorganize the field activities and management of the 
Defense Programs activities. DOE's report must identify all significant 
functions performed at operations and area offices and make 
recommendations as to where those functions should be performed.
    The Department contracted with the Institute for Defense Analyses 
(IDA) to take a fresh look at the management structure of Defense 
Programs, to establish a baseline of functions and responsibilities and 
where they are performed, and to develop realignment options for DOE to 
consider in developing a reorganization plan.
    IDA has completed their study and is preparing their final report. 
The Department is reviewing IDA's draft report and will prepare a 
report to Congress which will recommend specific organizational 
changes.
                               conclusion
    The United States faces a broad array of national security 
challenges as we enter the 21st century. The Department of Energy is 
committed to using all of its unique and valuable people, plants and 
laboratories to address the many challenges that will arise. We view 
stockpile stewardship and stockpile management as a single, integrated 
program. The critical capabilities and competencies of both the weapons 
laboratories and production plants must be maintained in the national 
security interest. The Department will work with the Congress to ensure 
that a complete and integrated set of capabilities and appropriate 
manufacturing capacity is maintained. Through a strong Stockpile 
Stewardship and Management Program the DOE will be a strong partner 
with the DOD in maintaining our country's nuclear deterrent.

                       statement of kenneth baker

    Senator Domenici. We are going to proceed, as I indicated 
to the statements of two other witnesses. Mr. Baker, you may 
proceed.
    Mr. Baker. Good morning, Mr. Chairman. It is a pleasure to 
address you today as the Acting Director of the Office of 
Nonproliferation and National Security at the Department of 
Energy.
    I have a brief statement and request my formal statement be 
submitted for the record.
    The worldwide proliferation of weapons of mass destruction, 
or WMD, and their delivery systems, has emerged as one of the 
most serious dangers confronting the United States. In November 
1994, and every year since, President Clinton declared such 
proliferation as a national emergency that must be addressed as 
one of the U.S. Government's highest priorities.
    I would like to report that we have been and will continue 
to work at a rapid pace to confront this critical national 
security issue.
    Today, I will discuss some of the key programs and the 
progress we have made, as well as new initiatives.

                  our successes and planned activities

    Our commitment to serving our Nation's security involves 
preventing the spread of WMD materials, technology and 
expertise; detecting the proliferation of WMD worldwide; 
reversing the proliferation of nuclear weapons capabilities; 
and responding to emergencies.
    We particularly draw upon 50 years of science and 
technology expertise resident throughout the DOE National 
Laboratory complex to help us to achieve these goals.

          material protection, control, and accounting [mpc&a]

    Our program of cooperation between DOE laboratories and the 
nuclear facilities in Russia and the New Independent States to 
improve protection, control, and accounting of weapons-usable 
nuclear materials is yielding dramatic results.
    When I testified 2 years ago, I was able to show you 
security upgrades at one facility in Russia. Today, I am happy 
to say that the program has expanded to over 40 facilities in 
the Soviet Union, where cooperation is now underway to improve 
security for hundreds of tons of weapons-usable materials.
    As you can see from the map of the former Soviet Union, 
sir--and I have a book for you that I will pass out along with 
the map--we are working in five different sectors: Ministry of 
atomic energy civilian complex, MINATOM; MINATOM's defense 
complex; the independent civilian sector; the non-Russian New 
Independent States sector; and the naval nuclear fuel sector.
    Our work in 1997 will address all known facilities in the 
former Soviet Union that contain weapons-usable nuclear 
material. Through this critical program, we are working to 
improve security for approximately 1,200 metric tons of highly 
enriched uranium, and 200 metric tons of plutonium in the 
former Soviet Union.
    We are also working with the Russian Navy and the 
icebreaker fleets to protect fresh navy reactor fuel, which 
could also be used in nuclear weapons.
    Our work in 1998 will accelerate our ongoing efforts and 
expand to address broader Russian naval fuel protection and 
improve the protection, control, and accounting of Russian 
nuclear materials during transport.
    By the end of fiscal year 1998, we expect to have completed 
MPC&A work at 25 facilities.
    Senator Domenici. What does that mean? How does that work?
    Mr. Baker. DOE is working at over 40 facilities right now 
and 25 of them will be completely done, finished by the end of 
fiscal year 1998.
    Senator Domenici. And that means, what?
    Mr. Baker. That means we can turn them back over to the 
Russians to monitor. We have all of the equipment in. And the 
facilities meet our standards, as far as security goes.
    Senator Domenici. So, that means, we do not have this 
potential that we have--had 3 or 4 years ago, of these special 
nuclear materials floating around----
    Mr. Baker. Yes, sir.
    Senator Domenici [continuing]. Being undetected, 
uninventoried, nobody knows where it is, and the likes.
    Mr. Baker. Yes, sir.
    Senator Domenici. That is what we are talking about.
    Mr. Baker. Yes; this means completing step No. 1--
protecting material at its source.
    Senator Domenici. Please proceed.
    Mr. Baker. Some of my staff have just returned from 
Obninsk, Russia, after having participated in the first Russian 
International Conference on Nuclear Material Control and 
Accounting.
    This historic conference, last week, was extremely 
successful, drawing participation from over 250 Russians from 
nearly all the Russian facilities in Russia, as well as other 
representative countries.
    At this conference, Russian Minister of Atomic Energy, 
Victor Mikhaylov, expressed his commitment to modernizing 
safeguards and security for the Russian nuclear materials, 
noting that Russia is financing a substantial amount on the 
MPC&A upgrades in Russia.
    It is clear, not only from the extensive support from the 
conference by the Russian Government, but also by the high 
quality discussion at the conference that there is serious 
dedication to the improvement of nuclear materials safeguards 
and security in Russia.
    This new, developing safeguards culture is important 
evidence of the success of the Department of Energy's program 
of MPC&A and its improvements.
    Senator Domenici. And it is also a tribute to the 
laboratories who are doing the work for you.
    Mr. Baker. Yes, sir; the laboratories are doing the work, 
and the entire government, really.

             initiatives for proliferation prevention [ipp]

    Similar to the MPC&A program and just as successful, is the 
Initiatives for Proliferation Prevention Program, or IPP, that 
seeks to draw scientists, engineers, and technicians from the 
former Soviet Union's nuclear, chemical, and biological weapons 
programs into long-term commercial ventures, thereby working to 
reduce the potential for brain drain to proliferant states or 
organizations.
    These commercial ventures have engaged over 2,700 former 
weapons scientists in cooperative projects that involve 10 DOE 
National Laboratories, and a coalition of over 75 U.S. 
corporations and universities, and over 70 weapon institutes in 
the former Soviet Union.
    We project these numbers will increase tremendously through 
1998.
    In 1995, sir, we had engaged 2,200 scientists. By the end 
of 1998, we expect to engaged 5,100 scientists.
    Senator Domenici. Tell me that again.
    Mr. Baker. In 1995, in this IPP program, we had 2,200 
scientists at work. At the end of 1998, we expect 5,100 Russian 
scientists will be employed in other things besides building 
nuclear weapons.
    Senator Domenici. Does that mean that they probably are 
going to be paid salaries, and----
    Mr. Baker. Yes, sir.
    Senator Domenici. From what you know.
    Mr. Baker. Yes, sir; they are going to be paid.
    Senator Domenici. That sounds like a funny question, but it 
is a pretty serious question.
    Mr. Baker. Yes, sir; and they are going to be paid.
    We also have 75 U.S. corporations involved in this program. 
By the end of 1998, we expect to have 100 U.S. corporations.
    In 1995, we had 75 institutes. And at the end of 1998, we 
expect it to be 120. Again, a very successful program.

                           other key programs

    My office plays a key role in supporting the U.S. efforts 
to monitor and verify a Comprehensive Test Ban Treaty. We are 
developing technologies that will detect nuclear explosions 
underground, underwater, or in the atmosphere.
    If such an explosion does occur, these technologies can 
detect, locate, and identify its source.
    This summer, the Air Force will be launching, for us, our 
FORTE small satellite, which will demonstrate improved ability 
to detect and characterize the electromagnetic pulses from 
nuclear explosions in the atmosphere, an important aspect of 
our treaty monitoring capability.

            chemical and biological nonproliferation program

    This year, we began a new Chemical and Biological 
Nonproliferation Program that seeks to leverage the chemical 
and biological science capabilities of the national 
laboratories and to develop technologies to detect, 
characterize, and facilitate decontamination of chemical and 
biological threat agents. In 1998, we plan to expand our 
emergency management and response capabilities to effectively 
respond to chemical and biological incidents.
    Our program to counter nuclear smuggling is part of a 
partnership with other Federal agencies that overlays barriers 
to illegal diversion of fissile and radiological materials at 
its source; detection and interdiction of materials during 
transit and at international borders; and response to 
threatened or actual use of these materials. We have just 
completed work on an overall program plan for nuclear smuggling 
that I will pass out to your staff, sir. This will direct a 
rigorous nuclear safeguards and security program for the 
Department to counter nuclear smuggling.
    In fiscal year 1997, we have demonstrated the ability of 
the national laboratories to determine the source of smuggled 
nuclear materials through nuclear forensic techniques.
    In 1998, we plan to provide customized versions of the 
equipment now used at DOE facilities to improve security at 
U.S. borders and we expect to develop highly portable and 
inexpensive radiation detection technology for city and State 
law enforcement and other emergency personnel.
    Finally, our intelligence program continues to focus the 
DOE's laboratory experience in nuclear weapons design and 
production to improve nuclear weapon foreign intelligence 
information and technical analyses on the emerging national 
security issues of today.
    In concert with this extensive international program, we 
are responsible for a wide range of activities to accomplish 
nonproliferation and national security goals in the United 
States.
    These activities include: directing a nuclear safeguards 
and security program for the entire Department of Energy 
complex; thereby, ensuring that our own facilities are secure, 
and that our own nuclear materials, technology, and expertise 
are protected; declassifying millions of departmental documents 
while protecting critical national security information; 
maintaining a security investigations program for both Federal 
and contractor employees of the Department; and managing and 
strengthening the Department's emergency management and 
response capability, and providing assistance to other 
Government agencies, as well as State, tribal, and local 
governments.
    Our budget request for fiscal year 1998 generally reflects 
an increase in nonproliferation activities with the Soviet 
Union in the MPC&A program, increasing the chemical and 
biological weapons nonproliferation and counter nuclear 
smuggling initiatives, and supporting our program staffing 
requirements.

                               conclusion

    Preventing the spread of weapons of mass destruction is a 
critical national interest and a global security issue. We are 
proud to be one of the leaders working aggressively with 
Congress and other agencies of the U.S. Government and in the 
international community to make the world a safer place for 
all.

                           prepared statement

    Thank you for your time. I will be happy to answer any 
questions that you may have, sir.
    [The statement follows:]

                 Prepared Statement of Kenneth E. Baker

    Good morning Mr. Chairman and members of the subcommittee. It is my 
pleasure to address you today as the Acting Director of the Office of 
Nonproliferation and National Security at the U.S. Department of Energy 
(DOE).
           proliferation challenges facing the united states
    The worldwide proliferation of Weapons of Mass Destruction (WMD) 
and their missile delivery systems has emerged as one of the most 
serious dangers confronting the United States. In November 1994 and 
every year since, President Clinton has stated that, ``The 
proliferation of weapons of mass destruction continues to pose an 
unusual and extraordinary threat to the national security, foreign 
policy, and economy of the United States.'' The President also declared 
the proliferation of nuclear, biological, and chemical weapons and of 
the means of delivering such weapons a national emergency through 
Executive Order 12938.
    As one of the United States Government's highest priorities, we 
must proactively address this problem that has broad consequences for 
international security and stability. At least 20 countries--some of 
them hostile to the United States--already have or may be developing 
WMD through the acquisition of dual-use technology, indigenous 
development and production, and/or support from rogue supplier states. 
Additionally, safety and security of existing nuclear weapons and 
materials are of increasing concern as economic and social pressures 
mount in countries such as Russia, Ukraine, Kazakstan and Belarus.
    With the breakdown of the protection systems that secured nuclear 
materials in the former Soviet Union, states and subnational groups 
that do not have their own nuclear material production facilities or 
civilian nuclear programs may obtain nuclear materials through theft 
and smuggling. This illicit path to proliferation has become an area of 
great concern and attention for the national security community.
    Additionally, we must be concerned with the growing threat from 
terrorism and the potential use of nuclear, chemical, or biological 
weapons. As we have seen over the past year, terrorist groups are 
showing a greater capability to use large-scale weapons to achieve 
their goal--chemical weapons were used by terrorists in Japan for 
example. The United States must have programs in place to combat and 
prevent these kinds of weapons from being acquired or used.
role of the department of energy and the office of nonproliferation and 
                           national security
    The Department of Energy and the Office of Nonproliferation and 
National Security continue to demonstrate to the world community the 
Administration's commitment to nonproliferation and reducing the threat 
from Weapons of Mass Destruction (WMD). Our responsibility to reduce 
the danger to U.S. national security from such weapons involves 
preventing the spread of WMD materials, technology, and expertise; 
detecting the proliferation of WMD worldwide; reversing the 
proliferation of nuclear weapons capabilities; and responding to 
emergencies. We particularly draw upon 50 years of science and 
technology expertise resident throughout the DOE National Laboratory 
complex to help us achieve these goals. Today, I would like to 
highlight some of our key programs as well as new initiatives.
    The Material Protection, Control, and Accounting (MPC&A) program in 
the former Soviet Union (FSU) seeks to provide enhanced protection and 
security for weapons-usable nuclear materials in FSU facilities, 
cooperatively strengthen indigenous MPC&A systems, and develop more 
effective standardized regulatory programs. This MPC&A program is part 
of our overall Arms Control and Nonproliferation effort that also seeks 
to limit the use of fissile materials worldwide, establish transparent 
and irreversible nuclear arms reductions, strengthen the 
nonproliferation regime, and control nuclear related exports.
    The Initiatives for Proliferation Prevention program, formerly 
known as the Industrial Partnering Program, draws scientists, 
engineers, and technicians from the FSU nuclear, chemical, and 
biological weapons programs into commercial ventures. Through this 
program, we are able to reduce the potential for ``brain drain'' to 
proliferant states or organizations and provide long term employment 
for these scientists in non-weapons work. Additionally, the program 
facilitates broad access of U.S. laboratory personnel to FSU chemical, 
biological, and nuclear weapons facilities encouraging openness and 
transparency. Cooperative projects involving the ten largest DOE 
National Laboratories, a coalition of 75 U.S. corporations, and over 70 
weapons institutes of the nuclear inheritor states of the former Soviet 
Union have engaged more than 2,700 former weapons personnel in the FSU.
    Our Nonproliferation and Verification Research and Development 
program is dedicated to conducting applied research, development, 
testing, and evaluation of science and technology for strengthening the 
United States response to the threats to national security and to world 
peace. The program focuses its activities on the development, design, 
and production of operational sensor systems needed for proliferation 
detection, treaty monitoring, nuclear warhead dismantlement 
initiatives, and support to intelligence activities.
    The Chemical and Biological Nonproliferation Program complements 
our significant effort in nuclear weapons nonproliferation. By 
leveraging the Department's more than $1 billion investment in chemical 
and biological sciences, our program seeks to complement efforts of the 
Department of Defense, the Public Health Service, and other U.S. 
Government agencies. The program supports long term research and 
development and near term technology prototyping to address mission 
needs in counterterrorism, military operations, and policy and treaty 
support.
    In concert with our international activities, we are responsible 
for wide-ranging activities to accomplish nonproliferation and national 
security goals in the United States. These activities include: (1) 
directing a rigorous nuclear safeguards and security program for the 
entire Department of Energy complex, thereby ensuring the demonstrated 
security of our own nuclear materials, technology, and expertise; (2) 
declassifying millions of Departmental documents while protecting 
critical information that has the potential to facilitate the 
proliferation of weapons of mass destruction; (3) maintaining a 
security investigations program for both Federal and contractor 
employees of the Department; and (4) managing and strengthening the 
Department's emergency management and response capability and providing 
assistance to other government agencies as well as state, tribal, and 
local governments.
    The Office of Nonproliferation and National Security also supports 
the President's Commission on Critical Infrastructure Protection to 
address growing concerns about domestic terrorist activities and both 
physical security and cyber threats to eight infrastructures that are 
increasingly dependent on technology and information 
(Telecommunication, Electrical Power Systems, Gas and Oil, Banking and 
Finance, Transportation, Water Supply Systems, Emergency Services, and 
Continuity of Government).
    Finally, through our Counterintelligence Enhancement Initiative, we 
are redoubling efforts to protect sensitive national security 
technologies, expertise, and information from foreign intelligence 
services. We have increased our counterintelligence presence in the 
field, expanded awareness and training, and are aggressively pursuing 
counterintelligence leads and anomalies.
                  our successes and planned activities
    Over the past year, the Office of Nonproliferation and National 
Security has achieved major successes in nonproliferation. I would like 
to highlight five particular areas of which I am personally very proud 
of our achievements.
    In 1996, the Material Protection, Control, and Accounting program 
secured hundreds of tons of weapons-usable materials at over 35 
facilities in Russia and other states of the former Soviet Union. 
Cooperation is now underway at over 40 locations in Russia, and 
expanded cooperation in 1997 will include all weapons-usable nuclear 
material at all known facilities in the FSU, accelerated work with the 
Russian Navy, the addition of four new Ministry of Atomic Energy 
(MINATOM) facilities, and accelerated transportation security 
enhancements. Fiscal year 1998 efforts will include: increased 
equipment procurements; funding additional work at Krasnoyarsk-45; 
accelerating ongoing work throughout the MINATOM defense complex; 
extending naval fuel work to cover the icebreaker fleet, naval support 
ships, and the transportation of naval nuclear fuel; and fully 
implementing efforts to improve MPC&A for nuclear materials during 
transportation.
    Second, the Office played a key role in achieving the indefinite 
and unconditional extension of the Nuclear Nonproliferation Treaty and 
the negotiation and signature of the Comprehensive Test Ban Treaty 
(CTBT). Our technology development program focuses on supporting 
operations to monitor and verify a Comprehensive Test Ban Treaty and 
has completed its second year. DOE technologies will significantly 
increase the nation's capability to identify potential nuclear 
explosions with high confidence and with minimal false alarms. The 
primary objectives of the CTBT monitoring system are to deter nuclear 
explosions in all environments (underground, underwater, or in the 
atmosphere) and, if such an explosion does occur, to detect, locate, 
and identify its source. The system is designed to provide credible 
evidence to national authorities, to aid in resolving ambiguities, and 
to serve as the basis for appropriate action. Seismic, radionuclide, 
hydroacoustic, infrasound, on-site inspection, and data processing 
technologies are all being exploited. During the summer of 1997, we 
plan to launch the FORTE small satellite on an Air Force Space Test 
Program provided Pegasus XL launch vehicle. FORTE will demonstrate the 
next generation techniques for detecting and characterizing 
electromagnetic pulses from nuclear explosions in the atmosphere. This 
new technology will provide the U. S. with improved capability to 
monitor compliance with nuclear test ban treaties.
    Third, our new Chemical and Biological Nonproliferation Program, 
initiated in fiscal year 1997, has been developing technologies to 
detect, characterize, and facilitate decontamination of chemical and 
biological threat agents. In 1998, we will be expanding our emergency 
management capabilities to provide critical information necessary for 
an effective response to chemical and biological incidents. 
Specifically we will be improving the Atmospheric Release Advisory 
Capability to address chemical and biological plumes in addition to the 
current radiological capability. We will also be enhancing the 
Communicated Threat Assessment Program to provide assessments of 
chemical and biological threats in addition to nuclear threats.
    Fourth, our program to counter nuclear smuggling is part of a 
partnership with other federal agencies to counter the theft of and 
trafficking in special nuclear materials. Our program overlays (1) 
barriers to illegal diversion of fissile and radiological materials at 
their source through the MPC&A program, (2) detection and interdiction 
of materials during transit and at international borders, and (3) 
response to threatened or actual use of these materials. Over the past 
year, we have developed technologies such as the Radiation Pager that 
will assist U.S. Customs Service and law enforcement personnel detect 
the presence of nuclear materials during transit. We are working with 
foreign customs agencies to increase the potential points of detection 
worldwide. We have also demonstrated the capabilities of the National 
Laboratories to determine the source of smuggled nuclear materials 
through forensic techniques. The Office also is working with the 
Department of State to implement forensics worldwide. In fiscal year 
1998, the Office plans to provide customized versions of equipment now 
used at DOE facilities to improve security at U.S. borders. We also 
expect to develop highly portable and inexpensive radiation detection 
technology for city and state law enforcement and other emergency 
personnel.
    Finally, our intelligence program continues to focus the decades of 
laboratory experience in nuclear weapons design and production on the 
emerging national security challenges of today. This program provides 
vital intelligence support to Administration and Departmental 
priorities, such as the Comprehensive Test Ban Treaty, the Reduced 
Enrichment Research and Test Reactor program, and our MPC&A activities. 
We put cost-effective, user-friendly technologies in the hands of 
intelligence, military, and law enforcement operators. Our 
nonproliferation objectives are best served by timely and well-focused 
intelligence assessments.
    The efforts of the Office of Nonproliferation and National Security 
in concert with DOE's National Laboratories are achieving direct, 
tangible results that significantly improve our national security.
                     fiscal year 1998 budget review
    The table below summarizes the fiscal year 1998 budget request for 
the Office of Nonproliferation and National Security from the Energy 
and Water Development Appropriation as compared with the fiscal year 
1996 adjusted appropriation.

                                            [In thousands of dollars]                                           
----------------------------------------------------------------------------------------------------------------
                                                                                    Fiscal year                 
                                                                 -----------------------------------------------
                     Appropriation/activity                            1996            1997                     
                                                                   appropriated    appropriated        1998     
----------------------------------------------------------------------------------------------------------------
Nonproliferation and Verification Research and Development......         241,495         211,919         210,000
Arms Control and Nonproliferation...............................         174,981         216,244         234,600
Intelligence....................................................          42,256          34,185          33,600
Nuclear Safeguards and Security.................................          86,397          47,208          47,200
Security Investigations.........................................          20,000          20,000          20,000
Emergency Management............................................          23,321          16,794          27,700
Program Direction \1\...........................................  ..............          88,122          94,900
                                                                 -----------------------------------------------
      Congressional budget request..............................         588,450         634,472         668,000
----------------------------------------------------------------------------------------------------------------
\1\ The fiscal year 1997 budget request included a new Program Direction line item as mandated by the Energy and
  Water Appropriation for fiscal year 1996. This new budget line item provides funding for salaries and         
  benefits, travel, support service contractors and other related expenses associated with the overall          
  management and administration of the Office of Nonproliferation and National Security. prior to fiscal year   
  1997 Program Direction funding was contained in the individual decision units.                                

    The Nonproliferation and Verification Research and Development 
budget request for fiscal year 1998 is a net decrease of $1.9 million. 
Funding is increased for the chemical and biological nonproliferation 
program and the nuclear smuggling/terrorism initiative. The increases 
are offset by reductions to remote spectrographic technologies for 
proliferation detection and materials detection research and 
development programs.
    The Arms Control and Nonproliferation budget requests reflects a 
continued increase in nonproliferation activities with the FSU as 
cooperation increases for Materials Protection, Control, and Accounting 
activities. The MPC&A program is expediting the installation of 
systems, procedures, controls, facilities, and equipment to prevent the 
spread of nuclear weapons-usable fissile materials. The request also 
increases funding for the nuclear smuggling/terrorism initiative. The 
increases are offset by reductions to other Arms Control programs.
    The Intelligence budget request reflects a minor net decrease from 
fiscal year 1997, although we are increasing funding for the nuclear 
smuggling/terrorism and counterintelligence initiatives.
    The Nuclear Safeguards and Security budget request is overall 
unchanged from fiscal year 1997. Funding has been provided for the 
nuclear smuggling/terrorism initiative through offsets in other Nuclear 
Safeguards and Security programs.
    The Emergency Management budget request increases funding for the 
chemical and biological nonproliferation initiative and for the nuclear 
smuggling/terrorism initiative. Additionally, funding is provided for 
the transfer of the Department's Communication Center from the Office 
of Human Resources and Administration and provides for the transfer of 
Threat Assessment funding from the Intelligence budget.
    The Program Direction request supports core staffing requirements 
for the Office of Nonproliferation and National Security and restores 
funding for support service contracts which were reduced as a result of 
the fiscal year 1997 appropriation. This funding will be used to meet 
requirements for the Declassification Initiative, Safeguards and 
Security, Arms Control, Research and Development, and other 
nonproliferation activities.
                               conclusion
    Preventing the spread of weapons of mass destruction is a crucial 
national interest and a critical global security issue. The Office of 
Nonproliferation and National Security is uniquely capable to serve 
this national interest. Our policy expertise coupled with our science 
and technology base enables us to provide innovative solutions to 
national and international nonproliferation problems. The work we do 
benefits the nation's security across a broad spectrum: protecting 
nuclear material in the United States and worldwide; rolling back 
existing nuclear weapons development programs internationally; ensuring 
the verifiability of nuclear treaties; and responding to emergencies. 
We are proud to be leaders working aggressively within the U.S. 
Government and in the international arena to make the world a safer 
place. Thank you.

             initiatives for proliferation prevention [ipp]

    Senator Domenici. Well, even though we are going to go to 
Dr. Smith, I just wanted to state for the record, Mr. Baker, 
there is a young man over at the Department of Energy--I do not 
know if he is here today, but John Hnatio----
    Mr. Baker. Yes, sir; he is here.
    Senator Domenici. Oh, he is. He should be sitting right in 
the front row.
    Frankly, the program of partnership with American 
corporations and the laboratories to put Russians to work on 
projects that are nonnuclear was a major nonproliferation 
initiative--and John was an effective proponent.
    A lot of people thought that was nuts and he was wild and 
crazy. Frankly, it took us about 2\1/2\ to 3 years to get the 
program started, and frankly, it would not have gotten started 
without my cooperation with the administration on the foreign 
aid budget.
    And so, the first effort was through the State Department--
we wanted to get money out of there quickly, but in any event, 
that is how we started it. And I just want to give my accolades 
to Hnatio, and say to the Department, I think he did a great 
job.
    This is an essential nonproliferation program and if it can 
continue to grow, it may very well make the nuclear scientists 
who have every potential to doing good things for Russia, but 
doing evil for the world, if they decide that they will not be 
paid or they have got nothing to do.
    They could be great assets to rogue countries, but this 
program will help to mitigate that potential. There are a lot 
of efforts in this area, and the Department of Energy has some 
very exciting activities underway.
    As you were talking about detecting, I jokingly whispered 
to my staff, since we cannot stop drugs coming across from 
Mexico, how could anyone believe we are going to detect or stop 
smuggling of nuclear weapons or technology and information--the 
so-called brain drain.
    I am told that nuclear weapons are very easy to detect, 
since they are radioactive.

            chemical and biological weapons nonproliferation

    And then I questioned, ``Well, what about the chemical and 
the biological agents that are flowing that are so dangerous?''
    And I gather we do not know how to do that, but is it true 
that we are even making some headway in some detection 
equipment regarding those softer, but probably more dangerous, 
instrumentalities of death and harm--in the biomedical and 
chemical area?
    Mr. Baker. Yes, sir; we are. You know, at the national 
laboratories we have over $1 billion of expertise in the 
chemical-biological area.
    We, right now, sir, with the small amount of money that we 
received last year of $17 million in the chemical-biological 
area that the Nunn-Lugar/Domenici bill authorized us, we have 
done a lot of work with the Department of Defense, with Dr. 
Smith's group, that, of course, are in charge of this chemical-
biological area.
    We are filling the gaps in the chemical-biological area. We 
are developing sensors, both short-range sensors and long-range 
sensors, to detect the chemical-biological agents on the 
battlefield.
    We are making great progress on this. We have a lot of 
expertise at our labs. And we think we have come a long way to 
do this.
    And this year, we plan to do more plume modeling in the 
chemical-biological area. So, I think we are making great 
progress in this area. And I think, next year, at this time, we 
can report to you a lot more progress even than we did this 
year with the $17 million.
    Senator Domenici. I would note that that is a very small 
amount of money. Actually, the President's budget asks for $23 
million, a $6 million increase. That is also a very small 
amount, considering the nature of the problem, but if we 
continue to use it propitiously, maybe we will be able to 
expand it, and at some point beyond that, but I do commend you 
for the work being done in that area.
    Mr. Baker. One thing I would like to say, sir, I have never 
seen all of the laboratories come together for a common problem 
like we have on this. For the small amount of $17 million, all 
of the laboratories pitched in, all of them doing their part; a 
very small amount of money to make sure this works.
    And they--we have their commitment, they will continue to 
do it. And it is a very successful program. I think it is good 
Government the way the Department of Defense is working with 
the Department of Energy. And we plan to continue this next 
year.
    Senator Domenici. Now, I note the presence of the ranking 
member in the State of Nevada, Senator Reid. I announced why 
you were not here at the offset. And I am pleased that you have 
joined me.
    I will have to leave for a while and let you preside at 
about 10:30 a.m. or 10:35 a.m. And I will be right back. I have 
to go see the majority leader, although you had a caucus, we 
did not have a caucus today. So, there must be more problems on 
your side today than on ours.
    Senator Reid. That is what happens when you are in a 
minority. [Laughter.]
    Senator Domenici. You have got to have a caucus everyday.
    Anyhow, would you like to make some opening remarks?
    Senator Reid. No, Mr. Chairman. I do not care to make any 
opening remarks, but may have a statement to be made part of 
the record.
    Senator Domenici. Sure.
    Senator Reid. I do not want to hold up the witnesses. I do 
want to say, publicly, this is the first time we have had the 
opportunity to appear as chairman and ranking member and how 
much I look forward to working with this subcommittee.
    I have served with you, now, going on 11 years in the 
Senate, and going on 15 here in the Congress. And I look 
forward to working with you in a closer relationship on this 
subcommittee.
    When I first came on the Appropriations Committee, you used 
to frequently lecture anyone that would listen about the 
importance of the national labs and the science that was 
emanating from the labs.
    And in the last several years, I have also been educated in 
that regard, and recognize the importance of the labs to the--
really, the survival of our country.
    Just in commenting, Mr. Baker's statement, $17 million 
spending on this very important nonproliferation program. Do 
you realize that the BLM spends that much money on the Wild 
Horse Program in the western part of the United States.
    So, I am not----
    Senator Domenici. Think of that. Well, Senator, I want to 
also thank you, because you have shown, in the short time that 
you have been designated ranking member, even without a 
hearing, you have shown a high degree of interest and in 
learning about the various laboratories and the functions of 
this subcommittee. And I want to tell you that I look forward 
to working with you.
    And I, too, want to reciprocate. You have traveled to 
laboratories. And we will soon go to Oak Ridge together. I want 
to make sure that we have a chance to go to Nevada and go look 
at the test site there, because that has been a fantastic asset 
for America for a long time. And there are still some valuable 
inventory there.
    Senator Reid. Just so long as I can keep you away from 
Yucca Mountain. [Laughter.]
    Senator Domenici. Well, I--maybe I will leave you and go up 
there, and do my own thing.
    In any event, I understand that situation. Let us proceed.
    Dr. Smith, please.

                       STATEMENT OF HAROLD SMITH

    Dr. Smith. Thank you, Mr. Chairman. I would like to submit 
my written testimony for the record, and simply highlight a few 
of the points in that.

              detection of chemical and biological weapons

    First of all, let me respond to the question you directed 
to Mr. Baker. You were quite right, Mr. Chairman, regarding the 
difficulty of detection of chemical and biological weapons 
versus nuclear weapons.
    And Mr. Baker's answer was on point; namely, the Department 
of Defense is very pleased to have multibillion dollar, world-
class laboratories enthusiastically researching the problems 
and the solutions that pertain there.
    The role of the Department of Defense obviously is that of 
a faithful partner and a smart customer. And in the role of 
smart customer, I have spent this last year doing what I think 
Senator Reid will have to do, and that is to travel to all the 
important DOE installations.
    This past year, not only the three laboratories, but also 
to Oak Ridge, Savannah River--of course, I visited various 
DOE--DOD installations, such as Barksdale Air Force Base, which 
houses the B-52, as well as touring some of our NATO bases, 
where we have U.S. nuclear weapons.
    Traveling has been a bittersweet experience, Mr. Chairman. 
I think we are over the era of denial, when the weapons complex 
really could not believe that we were entering a world without 
nuclear testing.
    And now, today, I think they accept that situation with 
enthusiasm. That is not to say that the sudden change, and 
particularly, the downsizing is without pain.

                    dismantlement of nuclear weapons

    One particular aspect of that became apparent when I was 
visiting the Sandia National Laboratory at Livermore; the so 
called California site. I was able to witness there the 
equipment that they have developed to monitor our dismantled 
nuclear weapons stored at Pantex in Texas. And the opportunity 
to see how carefully and thoroughly and securely we can keep 
track of what is going on inside these closed and heavily 
armored igloos is, indeed, very important.
    So important, that despite all the equipment that we have 
given the directorate in Russia, to try to ensure that their 
weapons are safely secured, the equipment developed by the 
laboratories and installed at Pantex is something that I think 
we have to show to the Russians to further enhance the security 
with which they guard those nuclear weapons.
    In that vein, I will be traveling to Russia in April to 
further the amount of equipment that we give them against the 
other side of the nuclear proliferation question.
    Mr. Baker and Dr. Reis both talked about nuclear material, 
but one should keep in mind that there are tens of thousands of 
nuclear weapons, fully assembled weapons, stored on some tens--
many tens of sites in Russia, guarded by soldiers that are 
sometimes not well paid, sometimes not even well fed.
    It is incumbent upon the Nunn-Lugar, now the Nunn-Lugar/
Domenici Program, to make sure that that kind of equipment can 
be put in the hands of our Russian colleagues, and yet, to 
ensure the American people that the equipment is being used for 
that and only for that.

                    annual nuclear weapon stockpile

    Dr. Reis has already highlighted the issue I next wanted to 
point out. That is, the annual certification, I think, has to 
be described as a complete success. In particular, I was very 
pleased with, I think, the now mature Nuclear Weapons Council, 
where I serve as the Executive Secretary.
    It has become, I think, the center point for all matters 
involving nuclear weapons. And I think it functioned very well 
this past year.
    Another step forward in the Department of Defense in the 
world of nuclear weapons is the enthusiastic response by 
General Fogleman, Chief of Staff of the Air Force, in setting 
up what we call XON, Operations Nuclear, under Major General 
Neary.
    We now have, thanks to General Fogleman, a center point for 
the Air Force, so that now I have a single point of contact to 
go to to ensure that the Air Force is giving the attentions to 
the weapons that they truly deserve, in a time when the nuclear 
world is not as overwhelming as it once was.
    Dr. Reis has also commented quite correctly on the enormous 
accomplishment of the B-61-11, the penetrating weapon. I will 
not repeat what Dr. Reis has said.
    I only want to note that I agree entirely with his 
statements, and also, to add two points from the war fighters 
point of view; namely, the yield of the B-61 is one-twentieth 
of the weapon that we will retire, the B-53.
    Now, for a war fighter that is very important, because it 
means he can have the same effectiveness, and yet have 1/20th 
the collateral effects. We are very pleased in the Defense 
Department, that we were able to make this transition in less 
than 2 years.
    Furthermore, the B-61 can be carried on the F-16 and on the 
B-2, whereas, the B-53 could only be carried on the massive 
strategic bomber, the B-52. So, from the warfighter's point of 
view, another fine step forward.

                           prepared statement

    Mr. Chairman, it has been a singularly good year from the 
point of view of DOD's view of these weapons. I think we are 
off to the right start. And I will be pleased to answer any 
questions that you or Senator Reid may have.
    [The statement follows:]

               Prepared Statement of Harold P. Smith, Jr.

    Mr. Chairman and members of the Subcommittee, I am honored to have 
this opportunity to appear before you. My remarks today will focus on 
the challenge shared by the Department of Defense (DOD) and the 
Department of Energy (DOE) to ensure high confidence in the Nation's 
nuclear stockpile. I will also describe a few of our mutual 
accomplishments from the year just past.
    As we are all aware, the last few years have brought significant 
change to the nuclear posture of the United States. The START I 
agreement to reduce the number of strategic arms was signed by American 
and Soviet Presidents and ratified by the United States Congress and 
the Soviet Duma. START II, which will further reduce strategic arms, 
has been signed by both the United States and Russia and ratified by 
the U.S. Congress, and awaits ratification by the Russian Duma. More 
recently, the U.S. underground testing moratorium was codified as the 
Comprehensive Test Ban Treaty, which has been signed by over 140 
countries. In the U.S., emphasis has shifted from designing and 
producing new weapons, to extending the service life of our current 
weapons stockpile. As a result, the infrastructure of our Nation's 
nuclear deterrent must evolve from SALT and START, to stockpile 
stewardship.
    The success of the Stockpile Stewardship and Management Program 
(SSMP) depends on the cooperative interaction of all the stakeholders 
in the nuclear infrastructure and oversight organizations. The 
President, the Congress, the Departments of Defense and Energy, and its 
national laboratories and facilities must work together to ensure that 
the Nation can continue to have high confidence in its strategic 
deterrent. My remarks today will focus on the stockpile stewardship and 
management program, some of its recent successes, and the challenges we 
will face in the near future.
           presidential direction and congressional oversight
    For the SSMP to succeed, the program requires direction and support 
from the highest levels of both the Executive and Legislative branches 
of government. In a speech given on August 11, 1995, the President 
described the importance of maintaining a viable nuclear deterrent: 
``As part of our national security strategy, the United States must and 
will retain strategic nuclear forces sufficient to deter any future 
hostile foreign leadership with access to strategic nuclear forces from 
acting against our vital interest and to convince it that seeking a 
nuclear advantage would be futile. In this regard, I consider the 
maintenance of a safe and reliable nuclear stockpile to be a supreme 
national interest of the United States.''
    In the same speech, President Clinton also directed the 
establishment of a new annual reporting process by which the stockpile 
could be certified to be safe and reliable under a comprehensive test 
ban. This new process will complement the stockpile stewardship program 
and the dual revalidation process currently underway at the national 
laboratories and the production complex of the Department of Energy and 
the Department of Defense.
    Congress, of course, has played an active part in the 
implementation and direction of the SSMP. Beginning with the Defense 
Authorization Act for fiscal year 1995 (Public Law 103-160), Congress 
has demanded that the stockpile stewardship program be not only 
technologically sound but also fiscally responsible. In hearing after 
hearing, committees and individual members have repeated their 
requirement that the Nation's nuclear deterrent remain safe and 
reliable and that the money authorized and appropriated for the SSMP be 
efficiently allocated by those responsible for implementing the 
program. The joint organization responsible for the task of monitoring 
the progress of the SSMP is the Nuclear Weapons Council.
                      the nuclear weapons council
    More than any other deliberative group, the Nuclear Weapons Council 
(NWC) is the most readily recognized and authoritative body concerned 
with management of the U.S. nuclear stockpile. As an interdepartmental 
organization, the NWC is supported by a wide-range of disciplines: 
security and safety experts, policy makers, managers, maintainers, and 
operators. Membership of the NWC consists of the Under Secretary of 
Defense (Acquisition and Technology) who chairs the Council, the Deputy 
Secretary of Energy, and the Vice Chairman of the Joint Chiefs of 
Staff. The Council is supported by the NWC Standing and Safety 
Committee, which I chair. The activities of the NWC reflect the 
monumental scope of the SSMP and the efforts put forth by both 
Departments to implement an effective and efficient program.
    In 1996, the NWC completed its first annual report to the President 
on stockpile certification. The report included the views of not only 
the DOD and DOE, but also those of the national weapons laboratories 
and the U.S. Strategic Command. The consensus was that the current 
nuclear stockpile is safe and reliable. Accordingly, there is no need 
to resume underground nuclear testing at this time.
    The NWC also provided managerial oversight of several important 
ongoing programs. Specifically, the NWC oversaw events concerning: 
implementation of the B53 replacement program; progress in the dual 
track approach to an assured supply of tritium; the W87 Life Extension 
Program; the Nevada Test Site readiness posture; the DOE enhanced 
surveillance and pit manufacturing programs; and, the Navy's Warhead 
Protection Program. The NWC and its supporting Standing and Safety 
Committee also served as the principal fora for coordination of 
activities on the DOE Stockpile Stewardship and Management Plan and 
review of DOE Defense Programs budget priorities and allocations.
    The NWC also established a Requirements Working Group, chaired by 
Major General Eldon Joersz, to focus senior level attention on specific 
aspects of the nuclear infrastructure. This group will address issues 
such as stockpile reliability estimates, nuclear weapon life extension, 
and tritium requirements. Matters such as these will continue to 
increase in importance as underground testing recedes farther into the 
past and we progress into the new era of science based stockpile 
stewardship.
             stockpile stewardship and management successes
    Mr. Chairman, I could talk at length about the NWC and its 
accomplishments. Instead, I will devote the remainder of my prepared 
testimony to distributing plaudits to organizations and programs that, 
over the past year, have labored to ensure that the Nation's stockpile 
remains safe and reliable and meets the requirements of the Department 
of Defense.
The B53 Replacement Program (B61-11)
    One of the most significant contributions to the safety and 
effectiveness of the enduring stockpile has been the program to retire 
the aging B53 and replace it with a member of the modern B-61 family of 
bombs, namely the B61-11. The B53 was originally introduced into the 
nuclear stockpile in 1962. Aside from an interim safety modification 
made in 1988, the B53 has remained in the stockpile unchanged for the 
last 35 years. Because it was designed almost 40 years ago, the B53 
does not meet modern safety standards--despite the 1988 upgrade. The 
system that is replacing it, the B61-11, is a modern system that meets 
current safety, security, and use-control standards. Were this the only 
advantage to retiring the B53, the effort would be worthwhile. However, 
other factors make the B61-11 a better weapon than the B53.
    Operational considerations clearly favor the B61-11 over the B53. 
Due to its size and weight, the B53 could only be delivered by the B52 
bomber. The B61-11 is compatible with both the F-16 and B-2. The B61-11 
produces far less collateral damage and has the same effectiveness 
against deeply buried targets as the B53 with less than one twentieth 
the yield. Implementation of the program was performed in a remarkably 
short time--only 16 months from initial verbal authorization to 
delivery of the first retrofit kits. Four complete B61-11 retrofit kits 
were delivered to the Air Force in November 1996, two weeks ahead of 
schedule. The military personnel and laboratory representatives who 
comprise the B61-11 Project Officers Group should be justifiably proud 
of their accomplishments. They have not only made the stockpile safer, 
they have also skillfully and effectively met a difficult military 
requirement. The B61-11 is an outstanding example of using an existing 
weapon in a new way to hold at risk robustly defended, deeply buried 
targets.
High Speed Computer Technology
    Over the course of the past year, the national laboratories have 
achieved stunning advances in stockpile related physics and engineering 
disciplines. For example, Sandia National Laboratory, in conjunction 
with Intel Corporation, has developed the world's fastest computer--one 
capable of performing a trillion operations per second. This kind of 
joint effort benefits both the private sector and the national defense. 
Industry gains access to research and development opportunities that 
would otherwise be unavailable. Sandia and the other labs can reap the 
benefit of a computer system that can be used to model the 
functionality of a weapon's core at the atomic level. We can use this 
capability to better understand how weapons perform and how they age, 
as well as applications for outside the world of nuclear weapons. 
Government and industry both benefit from this kind of interaction.
Dual Revalidation
    The implementation of the Dual Revalidation process is another 
success story from 1996. The purpose of the revalidation process is to 
develop an accurate assessment of each weapon system in the active 
stockpile by two independent teams. A process of intense review and 
scrutiny was deemed the best way to accomplish this goal by a joint 
working group of DOD and DOE experts. The W76 Trident I warhead, 
originally designed by Lawrence Livermore National Laboratory, was 
chosen as the initial warhead to be so reviewed.
    While DOE retains the responsibility of certifying weapons for DOD, 
the goal of Dual Revalidation is to understand what steps, if any, need 
be taken to ensure the continuing safety and reliability of the 
stockpile. Los Alamos, as the original design team, has taken the 
technical lead on the Dual Revalidation program for the W76 warhead. 
The Livermore laboratory will provide its own independent assessment. 
Under the guidance of the W76 Project Officers Group, great strides 
have been made over the course of the past year to ensure that the W76 
remains a centerpiece of the nuclear deterrent into the next century.
               milestones for the nuclear infrastructure
    The Nuclear Posture Review provides the DOD requirements for the 
DOE nuclear weapons infrastructure. As the principal advocate for the 
DOD, it is my duty to assess DOE's progress towards meeting these 
requirements. It is my pleasure to mention here some of the progress 
that has been made recently.
    The Laser Welding Facility at Los Alamos was completed and 
demonstrated the first successful laser welding of plutonium since the 
complex was restructured after the end of the Cold War. The laboratory 
has also received the Plasma Inert Gas Metal Arc (PIGMA) welder from 
Rocky Flats and has completed and approved the drawings for 
installation of the facility that will house the welder. Surveillance 
of 20 pits was completed and a new pit evaluation report method using 
CD-ROM format that has been developed to provide significantly more 
useful information than previous paper reports.
    The laboratories have re-established or improved stockpile 
management capabilities that were lost when the complex was 
restructured and reduced as a result of the end of the Cold War. Some 
recent successes include:
  --The first weapon reserve detonator tests since the closing of the 
        Mound facility were conducted, and the detonator surveillance 
        program was recommenced; metallurgists have demonstrated the 
        capability to form a full radiation case; Livermore has 
        demonstrated that an ultra-high power, very short pulse laser 
        can be used with great accuracy without melting material or 
        generating waste product;
  --The neutron generating facility at Sandia was completed ahead of 
        schedule and within budget;
  --Shipments of recertified neutron generators were all completed as 
        scheduled; and,
  --The prototype safeguards transporter was completed with scheduled 
        delivery of the first production unit due in December of this 
        year.
    Activities such as these address the infrastructure requirements 
for the weapons complex delineated in the DOD Nuclear Posture Review. 
As the principle advocate for the ``customer'' in our relationship, it 
is gratifying to note the progress in these programs.
                                 issues
    Programmatic successes from the past year offer encouragement to 
program participants and oversight organizations, but much work 
remains. The stockpile stewardship program faces significant hurdles--
technological and political. In his August 1995 speech, the President 
pledged his support to surmount these obstacles, saying: ``In order for 
this program to succeed, both the Administration and the Congress must 
provide sustained bipartisan support for the stockpile stewardship 
program over the next decade and beyond. I am committed to working with 
the Congress to ensure this support.''
    If it is to succeed, the SSMP requires sustained effort from all of 
the organizations involved. We must do more with less; we must make the 
most efficient use of our available facilities while new ones are 
constructed. We cannot delay until planned facilities become 
operational.
    For instance, the non-nuclear experiments currently being conducted 
at the laboratories are useful but can only tell a portion of the 
story. The subcritical nuclear experiments scheduled for the Nevada 
Test Site are necessary to study nuclear materials performance in an 
aging stockpile. Subcritical experiments do not involve a nuclear yield 
and do not violate the letter or spirit of the Comprehensive Test Ban 
Treaty. These experiments can be performed at existing facilities with 
existing technologies. These experiments are essential to stockpile 
stewardship and need to be performed.
    Secondly, the remanufacture of nuclear pits is of principal 
importance to the DOD. The Nuclear Posture Review contained a 
requirement that DOE be able to ``demonstrate the capability to 
refabricate and certify weapon types in the enduring stockpile.'' The 
new weapons complex--regardless of its structure--must be able to 
perform this task. As yet, this capability has not been demonstrated. 
We must ensure that the future complex can provide remanufactured pits 
for the stockpile.
    Lastly, and most importantly, funding continues to be the ultimate 
issue. The President has pledged his support and cooperation with 
Congress to ensure that the SSMP is implemented. Congress and, 
ultimately, the American taxpayer must be assured that the appropriated 
money is being well spent. In the modern concept of nuclear deterrence, 
DOD must be a willing partner and smart customer; DOE must be a 
responsive provider of services and technologies. Both Departments must 
make the best use of available funds. DOD has consistently supported 
the DOE and its budgets to implement the Stockpile Stewardship and 
Management Program. Though we will help defend necessary budgets, 
programs, and facilities at DOE, the DOD should not provide the funding 
itself. Maintenance of the nuclear arsenal has never been a function of 
the military. It should not become so now.
                              conclusions
    Today, the U.S. nuclear arsenal is safe, secure, and reliable. It 
is the goal of the stockpile stewardship and management program to 
maintain this high level of confidence in a static stockpile without 
having to resort to nuclear testing. Our Nation can be justifiably 
proud of the legacy of the past few years in which global nuclear 
tensions have been significantly reduced. In an era of no nuclear 
testing or new weapon production, responsible stewardship and 
management of the enduring stockpile offers challenges for a new 
generation of scientists and military personnel. The Departments of 
Defense and Energy are striving, together, to meet these challenges.
    Mr. Chairman and members of the Committee, this concludes my 
prepared statement. I will be happy to respond to your questions.

    Senator Domenici. Senator Reid, would you like to take a 
few minutes?
    Senator Reid. Since you have to leave, you go ahead with 
your questions. And I will wrap things up, if you----
    Senator Domenici. No; I am not going to be able to get my 
questions in before I leave.
    Senator Reid. OK.
    Senator Domenici. So, what I would like you to do is to ask 
all of them you want.
    Senator Reid. Then I will.

                      nonproliferation activities

    Senator Domenici. So, I am going to ask a few and then go 
to a meeting at the leader's office. And I will be back.
    First, let me--since I am acknowledging some people that 
have been very, very instrumental in moving ahead in the 
nonproliferation area, I want to thank the chairman of the full 
committee, Senator Stevens, because, you know, we put an 
amendment on the floor, the Nunn-Lugar/Domenici, a very 
expansive amendment, with reference to nonproliferation, even 
engaging America for the first time in trying to prepare its 
cities for seeing how many we could get to volunteer to work 
together and see what we could do about better training in the 
event of a weapon of mass destruction, like biological or 
chemical weapon were used in a community.
    With that amendment offered on the floor, $200 million was 
authorized, and $200 million was appropriated, which, I think, 
is an indication that we made a very good case.
    You are making a good case today, Mr. Baker, in all those 
areas you have spoken to. This is one of these situations in 
Government that is very unheralded, but very, very important.
    And I, personally, intend to make the nonproliferation 
efforts, in its broadest sense, as we have described them here, 
to make those better known to the U.S. Senate and to the people 
of this country. When we spend a few $100 million on something 
like this in Russia, with some 25 rather secure areas, now, 
that we are giving them foreign aid, I look at it as probably 
the best expenditure of Defense money that we could ever spend, 
because if we are worried about defending our country from real 
danger, then to try to keep the Russian inventory and stockpile 
of special materials that can make nuclear weapons and of the 
scientists who can go produce them and keeping them busy, too 
me there is no bigger national defense initiative than that.
    I also am somewhat concerned about another matter that I 
just want to lay before you all. And I note the presence of 
military representatives in the room. I say this in all 
honesty, I am very hopeful that at the very highest level of 
the military in the United States that the military leaders 
will exert more leadership and stronger support in the areas 
that we are talking about here.
    I mean, nuclear weapons, in a sense, have been put on the 
back burner. I mean, we used to have very, very major 
presentations when we were talking about the nuclear hiatus of 
Russia and America's deterrent capability. Now it seems like 
maybe the support might be waning a bit.

             annual nuclear weapons stockpile certification

    Having said that, Dr. Reis, we can all take pride in the 
letter signed by Secretary of Defense Cohen and the Acting 
Secretary of Energy Charles Curtis, about the status of the 
stockpile. But frankly, I hope you and all of those who 
participate in getting this done, understand that the directors 
of the national laboratories that participate in this are the 
ones that are truly recommending that this certification be 
issued or not be issued. And I hope that we will constantly 
permit them to state their case, with reference to the 
Stockpile Stewardship Program and its efficacy.

                       nuclear weapons scientists

    And I hope that within the Department and within the 
laboratories that we are listening to those who are really deep 
thinkers and have been involved in this nuclear program for a 
long time. I say this because we have some of the greatest 
minds in the world, and we better keep them.
    And we better have the same replaced by great minds in the 
next 10 or 15 years, or we will be in serious, serious problems 
with reference to this stewardship program.
    So, I want to just admonish that you work very hard to 
continue to get input from the best minds around. This is an 
evolving program. We think we know what we ought to be doing.
    And I have already congratulated you on your leadership, 
but I do not think we can afford to get stuck in some routine 
and some regime in a program that is just getting started, that 
is as complex as this.
    My one observation is the biggest instrumentality to 
substitute for tests is the computer. The computing capacity, 
seems to me, from everyone I have talked to--and I have gone 
beyond directors, to people that are in the field that are the 
great physicists, and major, major computing capacity is what 
is going to give them some of the prowess to take the place of 
the testing. And I would ask you to--for your observation in 
that regard. And then I will return and ask some more detailed 
questions.
    Could you comment on my remarks, please?
    Dr. Reis. I think you have pretty well hit the nail on the 
head. People concentrate on the aging of the stockpile itself, 
in terms of the weapons themselves getting older.
    I think, equally important, and perhaps in some way even 
more important, is the aging of the people in the laboratories, 
because ultimately, they are the ones on whose judgment we 
depend.
    Since World War II, we have never fired a nuclear weapon in 
anger. We hope we never have to, but ultimately, the deterrent 
value of those weapons that goes to the President and goes to 
the Congress, is really the people that we are depending upon.

                   maintaining stockpile reliability

    When we put this program together, Senator, General 
Shalikashvili, in terms of can we do this job, he had the 
nuclear weapons directors of the laboratories with him, and he 
just said, ``Look me right in the eye and tell me not just that 
you can do this, but that you can do this in the future.''
    Because it will be some future laboratory director who will 
be looking to some future chairman, and future Secretary of 
Defense and, indeed, some future President who might be able to 
do that.
    So, I think the program that we have tried to put together 
does emphasize that very, very strongly.
    And in addition, I think what you indicated is that what we 
are dealing with is a different set of tools.
    Senator Domenici. That is right.

                     stockpile stewardship program

    Dr. Reis. To inform that judgment and to ensure that one 
has to have the right people, those people have to have the 
tools to work with.
    In the past, we did have the world's best computing. We did 
have the world's best experiments, but we also had the ability 
to do underground testing.
    We still have many of those tools. We will not have the 
underground testing, so that puts more of a stress on the other 
tools that we need to use.
    Certainly, the computing is premiere among the tools that 
we need to use, but it is not just the tools themselves; it is 
the connection of those tools with those people. That is why, 
as I mentioned in my opening statement, it was extraordinarily 
exciting to us that we now are, by far, the world's most 
capable computing.
    It is the fact that we are working the computing with the 
designers and the engineers, and we are doing it as we speak at 
all three laboratories. And indeed, we are projecting that out 
into the complex itself.
    That, I think, will really make the difference, but we have 
to keep testing ourselves. We have to keep asking. That is why 
it is so important, as Dr. Smith mentioned, that the Nuclear 
Weapons Council is now engaged in that process as well.
    Senator Domenici. Well, frankly, I want to state for the 
record that I hope one of the tests for the success of this 
stewardship program is a constant inventory of the type of 
scientists that are migrating to the laboratories, or 
conversely, the type that are migrating out of the 
laboratories, to see what we have got left, because I believe 
we have left the period in history, for the scientists, that 
was exciting.
    And some of the world's greatest physicists and nuclear 
experts, that is where they wanted to go, because that is where 
all of the real, real expertise and real research was 
undertaken.
    I think a good test of our success would be to regularly 
determine what is happening to the personnel. And from that, 
determination, one can decide whether this program is going to 
work, because right now my guess is that--I am just going to 
pick a number, but 95 percent of the justification for this 
certification, signed by our new Secretary of Defense and 
Charlie Curtis, Acting Secretary--I would say 95 percent of 
this is because of the past; and not only the past 2 years, but 
the past, over 15 or 20 years, because we have got 
fantastically safe weapons that are durable and safe.
    And whether this is forthcoming, based on the next 5 years 
of something brand new is for us to make sure in this 
committee, and you, in the Government, make sure we are doing 
it right.
    Dr. Reis. I think the reason that we indeed have confidence 
in our ability now to do this is that we believe the weapons 
themselves have been well tested. The people who tested them 
are available.
    So the challenge, as you have pointed out, is really to 
maintain that. I mean, we really are running a race now with 
mother nature.
    We have to maintain our ability as fast or faster than the 
weapons age, and indeed as the experienced weapons designers, 
the experienced weapons engineers, and the experienced people 
in the production end--as they leave, we have to bring in a new 
set of people, who are equally good, but can reach back, get 
that experience, get that wisdom, and apply the new tools to 
ensure you, every year, that this system is working.
    One of the keys, I think, to our ability to do this is, 
indeed, the attention that the President and the Secretaries 
pay to the program, and that they are doing this every year.
    It is like taking your car back every year to the 
manufacturer and getting a guarantee. And as part of that, you 
want to ask, who is giving you the guarantee.
    It is those people, really, that one should be concerned 
with. I really appreciate the support of this committee.

          capability to return to underground nuclear testing

    Senator Domenici. Dr. Reis, I want to make one last point 
before I leave. It has somewhat to do with my ranking member's 
interest, but, part of this agreement included the Joint Chiefs 
of Staff saying, ``OK. We will go along with this.''
    And the President of the United States had to get our 
military leaders to do that--that these interesting stockpile 
stewardship capabilities were going on, and scientists were 
telling the Joint Chiefs, ``They will work,'' but also, there 
was the additional condition that the country could be ready to 
return to testing in a very expedited manner.
    And frankly, I am just as concerned about if that event 
occurred, do we have the capability? I mean, are we keeping the 
right inventory, not only in the laboratories, but at the 
Nevada test site? Are we keeping the right kind of expertise? 
That is just a capability that we are going to have pay for.
    Otherwise, you know, we will have one of these lab 
directors tell the Joint Chiefs, ``We are not prepared to give 
you the required certification,'' because they have to certify 
that, too; that we can return----
    Dr. Reis. That is correct.
    Senator Domenici [continuing]. In a short period of time. 
That is one of the things they write their letter on. And so, I 
raise that point. And I think the Senator from Nevada is going 
to be interested in that, from what I can tell.
    I want you to know I am interested, also, Senator Reid.
    OK. I am going to be back in about 10 minutes. Thank you.
    Senator Reid [presiding]. Gentlemen, I am wondering if 
someone can respond to the question of Senator Domenici, 
whether or not we are capable if, in fact, some event occurs 
that we need to return to underground testing. Are we capable 
of doing that?
    Dr. Reis. Let me take that one, Senator Reid.
    We have just completed a detailed study, which was required 
by the Congress. It is in the final coordination process. Let 
me get just a little ahead of that and tell you what the 
results of that study are.
    The answer to your question is yes, we can do that. The 
President has directed us to be prepared to resume testing in a 
meaningful way in 2 to 3 years.
    The studies indicated that we can certainly meet that 
requirement the way we are going now.
    The Congress also said, ``Can you do it earlier than that? 
Can you do it in 1 year, 1\1/2\ years?''
    We believe we can do that as well. Most certainly, it would 
require additional resources. We have identified what we would 
do in the event that that would happen.
    Again, all of the details of that are in the report. The 
report should be coming up to the Congress relatively soon.

                           subcritical tests

    Senator Reid. We have at the Nevada test site--we have 
heard how great the labs are from both the chairman and from 
me.
    Could I hear comments from either one or all about how you 
feel that the Nevada test site, this multibillion dollar 
facility located 90 miles from Las Vegas, how it fits into the 
plans?
    Dr. Reis. Let me start on that, and then I will turn it 
over to my colleagues. I am sure they will want to comment as 
well.
    One of the more significant series of experiments that we 
will be doing this year as part of the Stockpile Stewardship 
and Management Program are the subcritical tests, for which we 
will be announcing the specific dates in a relatively short 
period of time.
    What those experiments are doing really will be going after 
some very, very critical understanding of the plutonium 
equations of States, some are very, very detailed scientific 
experiments.
    The only place we can do those is at the Nevada test site 
because, for one, we will be dealing with plutonium and 
explosives.
    Again, there will not be nuclear explosions, and they will 
not be going critical. They are completely in compliance with 
the Comprehensive Test Ban Treaty. They really will be key to a 
lot of our understanding of working on real problems.
    They are also useful for a second reason in the sense that 
they will help us ensure that in the event that we ever have to 
go back and do testing, if the President and Congress so 
direct, we will be able to maintain that technical expertise in 
large measure by performing these, you know, these tests 
themselves.
    Mr. Baker. Senator Reid, we have people serving at the 
Nevada test site, very important people that work treaty 
implementation for us. Also it is a perfect place to work some 
of our nonproliferation problems, like one system called the 
CALIOPE Program, which is a system to detect chemical effluence 
from a factory building nuclear-type weapons. The Nevada test 
site is a good place to test this capability, which we did this 
summer.
    So, it is a great place to run tests like this that we need 
to do to make sure our detection capability for 
nonproliferation is the best we can get.
    Senator Reid. Dr. Smith.
    Dr. Smith. Senator Reid, I, first of all, want to emphasize 
the importance of these subcritical exercises, experiments.
    From the point of view of the Department of Defense, they 
are sine qua non. We insist that the Department of Energy carry 
out such experiments.
    Second, Dr. Reis is also correct in saying that it is the--
I would say the prime ingredient in being able to return to a 
regime of testing if we find we have to do so.
    I would also like to note that we carry out a number of 
important counterproliferation activities at the test site for 
the Department of Defense. Primarily, these are aimed at the 
type of facilities that we can test out there.
    For example, we are duplicating what we think are chemical 
and biological facilities in rogue states and ensuring that the 
techniques we have for locating them, destroying them, and 
minimizing the collateral effects of such destruction is indeed 
realistic.
    Second, there are obviously deeply buried tunnels in 
Nevada. And that is also key to our ability not only in the 
world of weapons of mass destruction but even in the 
conventional world, where many of the areas of threat that we 
foresee in the conventional world have resorted to deeply 
buried targets.
    Again, the test site is the only place to carry those out.
    Because we are already there with those first two that I 
mentioned, we are also concerned about somewhat softer targets, 
but nevertheless difficult targets, so-called cut and cover. 
So, we carry out operations there.
    Furthermore, we are testing out our unattended ground 
sensors. This is, again, using modern technology to ensure that 
we can attack at the right time, at the right place and know 
the effect of those attacks.
    I cannot discuss them here, but we also carry out very 
important operations associated with Special Forces. It is a 
pleasure to work at the test site.
    Mr. Baker. One last thing, Senator Reid.
    Senator Reid. Yes; please.
    Mr. Baker. We have a spill test facility out at the Nevada 
test site, which is the only one of its kind in the entire 
United States.
    This place is the Environmental Protection Agency [EPA] 
certified to release chemical weapons. And there are about 33 
different types of chemicals we can use in the spill test 
facility. And again, it is one-of-a-kind, and it is a very 
important facility for us at the Nevada test site.
    Senator Reid. You indicated chemical weapons. I think, 
probably, you meant chemical agents, did you not?
    Mr. Baker. Chemical agents, yes----
    Senator Reid. OK.
    Mr. Baker [continuing]. Or just chemicals.

                        detection of land mines

    Senator Reid. Yes; chemicals.
    One of the things that I and other Members of the Senate 
are interested in for example, Senator Leahy has led a 
personal--one of the things near the top of his personal agenda 
has been demining.
    We need to come up with the ability to demine the world. I 
will never forget the trip to Angola that I took; 10 million 
people live there, but they have 20 million landmines. And one 
of the biggest businesses there is constructing artificial 
limbs, especially for kids and women because they are the ones 
that go out in the fields.
    Is that one of the potential uses of that vast Nevada test 
site, that we could do something there to make it more possible 
to demine parts of the world that need to be demined?
    Dr. Smith. Senator, that is well outside of my portfolio. 
But may I take that question for the record, and ensure that 
the Department of Defense gets an answer back to you?
    Senator Reid. I would appreciate that very much.
    [The information follows:]
             Using Nevada Test Site for Work on Land Mines
    The Nevada Test Site has an area dedicated to developing and 
testing technologies for the remote detection of land mines. This area 
consists of 300 mines (minus detonators) buried in realistic 
situations. In the past, various organizations have attempted to use 
radar, infrared, and laser techniques to locate and isolate mines--
without much success. There has been no activity for the last six 
months and there are no users projected for the foreseeable future.

         detection of chemical, biological, and nuclear weapons

    Senator Reid. The other area that is in your portfolio, one 
of the things that is a concern to a number of people is--we 
have talked about rogue states, rogue individuals that would 
come upon nuclear devices in some manner.
    How is our program advancing as far as being able to detect 
biological and chemical weapons? And what about these weapons 
of mass destruction that take so little space and cause so much 
harm?
    Dr. Smith. As Senator Domenici already mentioned, when it 
comes to nuclear weapons, the fact that they are radioactive 
gives us considerable assistance. We are working with 
Department of Energy to develop the right kinds of equipment to 
detect all three: Chemical, biological, and nuclear.
    Senator Reid. I would just interrupt, Dr. Smith. One of the 
problems that we have is we need guidance from the experts to 
tell us if there is more money needed in areas like this.
    And my personal opinion is this is an area where we need to 
devote a lot more attention and energy to. And I am wondering 
if there are enough resources either with the Department--the 
manager at the Department of Defense to adequately do research 
as to how we can disarm some of these devices and detect them 
and, you know, other types of things.
    Dr. Smith. Yes; we could use additional funds. But I want 
to point out, Senator, particularly in this area of biological 
weapon detection, that that is an extremely difficult problem. 
And one would think we should simply double, triple the 
investment we are making there.
    But we have to also have ideas. And we, I think, are 
tapping every source of good ideas on how to solve that complex 
problem. In short, I think we are now idea poor. And it is very 
difficult for me to come to the Senate and ask for more money 
when I do not have the solid ideas for you to finance.

                        device assembly facility

    Senator Reid. One of the big assets we have at the Nevada 
test site is a device assembly facility. It cost large amounts 
of money and was absolutely necessary when we had the testing 
program going on there.
    This facility has never been used. Does anyone have any 
idea whether there is a use for this facility or whether it is 
just going to be saved for future use in case there is further 
underground testing?
    Dr. Reis. Well, Senator Reid, of course, the major purpose 
of the device assembly facility now is as a place where one 
could deal with the so-called Broken Arrows, either our own or 
someone else's. We could disassemble that in a safe facility.
    And, of course, assembly of test devices is still as valid 
a mission now as it was when the device assembly facility was 
first conceived. People are looking, as you might expect, very 
hard at other potential uses for the device assembly facility.
    I would have to tell you the jury is still out as to 
whether it is an appropriate place to do some of these things. 
We will certainly get back to you in as much detail as we can, 
to give you an update in terms of where we are.
    But it is, as you point out, quite a remarkable, modern 
facility, in terms of its ability to do a job.
    It is certainly available as a backup for the assembly if 
we ever have to have that. But in terms of, as they say, new 
missions, we will just have to get back to you in more detail.
    Senator Reid. OK.
    [The information follows:]
                        Device Assembly Facility
    Defense Programs plans the following missions for the Device 
Assembly Facility (DAF), once it becomes operational: (1) Subcritical 
Experiments--the assembly of subcritical experiments; (2) Test 
Readiness--maintain the capability to assemble physics packages for a 
series of one to three nuclear tests in the event the President 
declares a ``Supreme National Interest;'' (3) Damaged Nuclear Weapons--
maintain the capability to accept and disable a damaged nuclear weapon 
(assume one exercise every other year to maintain skills, capabilities, 
facilities, and to maintain and develop processes and procedures); (4) 
Replacement of Able Site, A-27--the assembly/staging of High Explosives 
(HE) and radioactive materials in support of LLNL/LANL activities 
previously performed in Able Site, (examples in fiscal year 1996 and 
fiscal year 1997 included Ranchito, Ranchito III, Nellie 10, 11, 12, 
13, Jigsaw, and Monarch).
    Possible future missions for DAF include: (1) Training--in general, 
this area would include laboratory hands-on practice on nuclear weapons 
trainers, and ``off-line'' work by laboratory personnel with one of a 
kind components or assemblies. The most organized of these initiatives 
is the Joint Nuclear Explosives Training Facility, a Los Alamos 
sponsored initiative to provide formalized, structured training to 
laboratory personnel in a realistic setting. This initiative is 
currently structured to use either Area 27, or DAF when it is 
available, as an extension of training facilities at Los Alamos. (2) 
Enhanced Surveillance--the DAF could be used for field testing and 
demonstration of advanced techniques for the surveillance program. (3) 
Advanced Manufacturing, Design and Production Techniques (ADaPT)--the 
DAF could be used for field testing and demonstration of these 
techniques prior to full implementation. (4) Weapons Modifications/Life 
Extension Programs--the DAF is well suited to weapon modifications and 
life extension programs which, if conducted at Pantex, could 
significantly disrupt the ongoing assembly and disassembly operations 
being conducted there. DOE/NV developed a model for DAF contribution to 
a life extension program which could be adapted to a variety of weapon 
systems needs.

      nuclear material protection, control, and accounting [mpc&a]

    Mr. Baker. Senator Reid, back to your question on 
detection, you were not here when I talked about some of the 
documents that we have put out.
    You know, the problem that we had initially on the nuclear 
side, of course, was the large stockpiles of nuclear weapons 
and nuclear materials in Russia, inadequate accounting and 
protection systems, numerous facilities in States, potential 
for leakage and theft, and, of course, unstable political 
conditions.
    I think we have come a long way. One can always use more 
money. But we are now working on MPC&A at over 40 sites in the 
former Soviet Union that are indicated on the map. It is in 
this document, which I will give you, sir.
    We expect to have completed MPC&A upgrades at 25 facilities 
by the end of fiscal year 1998. We are working to improve 
security for all of the weapons usable materials. The Russians 
have 1,200 metric tons of highly enriched uranium [HEU] that 
can make 48,000 bombs; 200 metric tons of plutonium which can 
make 25,000 bombs. So we are securing this material.
    We are trying to protect the material at its source. If 
this fails, we are trying to work with the FBI--we have a 
program plan out on how we want to work to counter theft, stop 
trafficking, and prevent the associated potential for 
terrorism.
    We put together a program plan to work with other agencies 
to try--if nuclear material is not protected at its source, how 
we can stop it from getting into the wrong hands and getting 
into the United States.
    So, we are working this very hard. I think it has come a 
long way. I would--I do not want to take credit for this 
myself, but I can--I can say if I stand back and look at the 
people who have done this, I would not have believed we would 
have gotten this far in 3 or 4 years.
    It has come a long way, and it is thanks to people like you 
and this committee that has given us the money to work these 
problems and work them as hard as we can to make sure that this 
work gets done.
    I echo what Senator Domenici said. It is not a Russian aid 
program. It is the biggest national security problem, I think, 
that we have in this country.
    Senator Reid. I would hope----
    Dr. Smith. Senator Reid.
    Senator Reid. Yes; please.

                        device assembly facility

    Dr. Smith. Just coming back to the device assembly, DOD 
does have an interest in that facility, and I will get back to 
you in writing, because the interests are classified.
    Senator Reid. Thank you very much.
    Dr. Reis. If I could add to that----
    Senator Reid. Dr. Reis.
    Dr. Reis. I should mention that as we continue with the 
subcritical experiments, we would be doing some of the assembly 
work at the device assembly facility.
    Senator Reid. I did not realize that.
    Dr. Reis. Right. And it is, obviously, an ideal place to do 
that sort of work.
    [The information follows:]
           Department of Defense Use of the Nevada Test Site
    In our efforts directed at countering the proliferation of weapons 
of mass destruction, the Department of Defense utilizes the Nevada Test 
Site for training. We plan to investigate the expansion of those 
training programs. This expanded role would incorporate a wider array 
of the resources available at the Site.

                             nato expansion

    Senator Reid. I would only say that I hope that we proceed 
with the utmost care and caution in this NATO expansion, and it 
does not interfere with some of the good work that is outlined 
in this document that you have submitted to us.
    Senator Domenici has asked that you wait. He has some more 
questions. I have no more. And so if you would have a drink of 
water and stretch, go to the restroom, whatever you need, I am 
going to hold--the committee is in recess until Senator 
Domenici returns.
    Mr. Baker. Thank you, Senator.
    Dr. Reis. Thank you.
    [A brief recess was taken.]

              stockpile stewardship and management program

    Senator Domenici [presiding]. Dr. Reis, for the record, is 
the nuclear weapons stockpile safe and reliable, and does the 
DOE have the capability to support the requirements of the 
Defense Department?
    Dr. Reis. Yes; it does, Senator.
    Senator Domenici. How long will we have to wait until it 
can be determined that the Stockpile Stewardship Program works?
    Dr. Reis. Senator, I believe it is working now. I think 
what we have accomplished over the past year in terms of the 
specifics that I mentioned and that which will be mentioned in 
detail in the testimony, really gives us a reasonable degree of 
optimism that it will be able to work for the future.

                      annual certification process

    I think the annual certification process is a real help to 
us because it asks very simply: Do we have the confidence now, 
not just are we safe and reliable, but are we going to have the 
confidence for next year? Are we doing those things in the next 
year and in the outyears that make us feel that this is a 
working program?
    It gives us the opportunity to ask what you mentioned 
earlier. Are the people certified? You know, it is not just the 
weapons themselves. It is the people who have to make that 
judgment that we are really concerned about. But I think over 
the past 2 years, we have made some significant progress in 
that regard.
    Dr. Smith. Mr. Chairman.
    Senator Domenici. Yes.
    Dr. Smith. I wanted to come back to a point you raised 
earlier. That is very good advice to the customer in this case; 
namely, measurement of the flow of good people in and out of 
the laboratories.
    I want to assure you that we, indeed, do use that as a 
measure and will continue to use it as a measure.
    I also wanted to just take a moment to tell a story about 
General Shalikashvili that I think shows the strength of 
America.
    The meeting that Dr. Reis referred to involving General 
Shalikashvili was also attended by Dr. Hecker, the director of 
the Livermore--the Los Alamos Laboratory and Dr. Narath, then 
the director of the Sandia Laboratory.
    And it was in that discussion where General Shalikashvili 
decided that it was safe to go ahead without testing and made 
that quite clear to the two laboratory directors.
    At that point, Dr. Hecker looked around the room and 
realized that he was born in Austria, General Shalikashvili was 
born in Poland, and Dr. Narath was born in Germany.
    It speaks well for America that that kind of talent came to 
this country and was key to making such decisions. It is those 
kinds of people that we want to continue to attract, both 
from--natural Americans and those who come to live here.
    Senator Domenici. Well, let me just follow on, Dr. Smith. 
Is the Department of Defense satisfied and confident that the 
Stockpile Stewardship and Management Program will be able to 
meet the requirements of the DOD the further we move away from 
the underground testing?
    Dr. Smith. I think the correct expression, Mr. Chairman, 
is, so far, so good.
    The Department agrees with your position that we must 
retain the ability to return to testing in a reasonable period 
of time should events occur that give rise to such a situation.
    Senator Domenici. Now, I know, Dr. Smith, that, you know, 
regardless of what department of Government, the executive 
branch is the executive branch, and everybody in that sense 
works for the President and with the OMB of the President.

                    adequacy of doe's budget request

    But I want to know: Does the Department of Defense have any 
concerns with the adequacy of DOE's budget request and DOE's 
ability to maintain the professional personnel needed to assure 
the safety and reliability of nuclear weapons?
    Dr. Smith. We think that budget is adequate, just adequate.
    Senator Domenici. Let me state for the record that it is 
amazing that we have to struggle so mightily to keep this part 
of the Department of Defense's budget, which is managed by 
DOE--and that happens to be the way it is--but it is amazing 
that we have to struggle so mightily to get adequate funding, a 
$4 billion program, out of a Defense (050) budget that is about 
$280 billion.
    It seems to me that instead of nickel-and-diming this 
program, which provides the underpinning of our nuclear 
deterrent, we ought to be very excited that we are maintaining 
this capability and perhaps the safety of the United States and 
the world. This is $4 billion basic stockpile stewardship 
funding to ensure the reliability and trustworthiness of the 
nuclear weapons deterrent.
    Does the Department of Defense have any specific concerns 
in this regard?
    You have talked generally, Dr. Smith. But are there any 
specific areas of concern that we should know about?

                manufacturing and production capability

    Dr. Smith. We are concerned with the production facilities. 
So, we will keep a very close eye to make sure that we can 
reproduce, refurbish, remanufacture components and weapons in 
the years ahead.
    It is too soon to suggest the situation is anything less 
than satisfactory. But as I--as we look over the budget, and 
over the complex in general, it is the remanufacturing 
capability that has gotten our attention.
    But we will keep a very sharp eye on that through the 
Nuclear Weapons Council. And we will certainly come to this 
committee if we think that the DOE plan is underfunded.

                  relationship between the DOE and DOD

    Senator Domenici. I know that what is key to the Department 
of Energy getting an adequate budget in this regard is the 
continued good relationship between Dr. Reis, both as to DOE 
and as to the Department of Defense.
    Now, am I safe in saying that Dr. Reis is held in 
appropriate esteem by the Department of Defense with reference 
to their concerns?
    Dr. Reis. This better be good, Harold. [Laughter.]
    Senator Domenici. I mean, we can do this off the record, if 
you would like. [Laughter.]
    Or you may be excused, Dr. Reis. [Laughter.]
    Dr. Smith. No; on the record. Mr. Chairman, as you well 
know, this is part of the Vic and Hal show that has been going 
on now for some 2 or 3 years. And I think it is a good show. I 
know it is an effective show.
    And Victor better answer the same way as I am, that it is, 
indeed, a pleasure to work with Dr. Reis. And he is, indeed, 
held in high esteem by the Department of Defense.
    Victor.
    Senator Domenici. All right.
    Dr. Reis. Certainly, I think Dr. Smith deserves full credit 
for taking the Nuclear Weapons Council and making it a much 
more active and vital organization.
    You know, having worked at the Pentagon for a number of 
years, it is a large, complex building. It does a lot of very, 
very different things all the way from health care to Bosnia to 
whatever. Maintaining the interest in nuclear weapons within 
that complex is his responsibility. I think we have really come 
a long way over the past couple of years.
    Let me add that, yesterday I had the opportunity from the 
Armed Services Committee also to work with General Habiger, to 
testify with General Habiger, at the Strategic Command. Working 
with Dr. Smith over the past year--General Habiger has visited 
all of our sites, all of the laboratories.
    We have been working as a team in trying to ensure that 
both within the Department of Defense and the Department of 
Energy, that the people understand the importance of nuclear 
weapons, and really understand this difference. This is the 
paradigm shift, if you will, from production tests to a 
stockpile life extension, no-test-but-be-prepared role that we 
are all facing over the next decade or more.

                     los alamos national laboratory

    Senator Domenici. Well, I just want to make sure that you 
know how I feel about statements that the Chairman of the Joint 
Chiefs of Staff has made a certification. Frankly, I have great 
respect for him, and I have grown to know him, and I think 
maybe I am even a friend.
    But it is pretty obvious that he makes none of these 
decisions of the safety of this nuclear stockpile based upon 
his own intellectual analysis. I mean, frankly, I believe he 
would have a great deal of difficulty engaging in a very 
serious conversation of any length on what goes into all of 
this.
    So, I think that decision is rendered because he gets 
advice. And the important thing is that we make sure the 
advice-givers are also adequately informed.

                          new director at lanl

    And that leads me to just an off the cuff, yet pretty 
important, remark. You know, Los Alamos National Laboratory, 
while it is under the direction of the University of 
California, has a vacancy in the directorship of that great 
laboratory soon, as Dr. Hecker is going to be leaving.
    And some, you know, might think that it is going to be all 
decided by the University of California in their superior 
capability to select Ph.D.'s with great talent. But I hope 
everybody understands that we have just enumerated the 
significance of this office, director of one of the big 
national laboratories here, in the last 1\1/2\ hours as it 
relates to the nuclear deterrent and the safety and reliability 
of the nuclear weapons stockpile.
    We must have somebody that understands nuclear weapons, I 
believe, and who understands the significance of their 
deterioration or, conversely, the significance of making sure 
they do not deteriorate, and what goes into it.
    So the Department of Energy, ultimately, will have 
something to say about that directorship. And I would hope that 
the Department of Defense would have something to say about it.
    I make no bones about that, regardless of what the 
University of California thinks. I am not interested in what 
their regents say. I am interested, ultimately, in their 
regents--I am interested in what some people that know about 
this laboratory and its relationship to our security have to 
say.
    Is that a fair assessment, Dr. Reis and Dr. Smith?
    Dr. Reis. I can tell you that the people from the 
University of California search group have already spoken to me 
about my requirements--what I felt my requirements would be for 
the director of the laboratory. They were not very different 
than your own, sir.
    I am sure that as that process goes on, if past experience 
is any indicator, that we will continue to maintain that close 
relationship. With your permission, I will certainly pass your 
remarks on to the university.
    Senator Domenici. Yes; I am very interested in their 
decisionmaking, because they want somebody of high, high 
academic prowess that can carry the mantra right. But I think 
it is fair to say that we would be very interested up here in 
making sure that those who have to run this program also think 
that they are qualified for this particular job.
    I think that would be a good thing to comment to them on.
    Dr. Smith?
    Dr. Smith. Simply to say that the Department of Defense 
echoes, very much, what you said.

            chemical and biological weapons nonproliferation

    Senator Domenici. Let me move to you, Mr. Baker. You have 
told us about the great accomplishments as you see them of the 
$17 million that was earmarked to undertake R&D related to 
detection of materials used in making chemical and biological 
weapons.
    How much of that $17 million has been actually allocated in 
1997, and the $23 million that came forth in the President's 
budget, what was your actual request?
    Mr. Baker. We have gone to work, sir, on the $17 million. 
The $17 million has been allocated. We have put work at all of 
the labs.
    The labs came in with proposals on what we could do. Those 
proposals were looked at by the customers. We put the moneys 
out to the labs. They have gone--like I say, we are building 
right now sensors systems, standoff sensor systems. We are 
building also sensor systems that you can use up close for 
biological detection.
    What we plan to do with the $23 million is continue to work 
on these sensor systems--they are not easy to build, especially 
in the biological area--and also to work on some plume modeling 
so that we can detect what is in these plumes.
    We are also trying to assess, develop, and validate, the 
application of all of these plumes, and to predict how chemical 
and biological agents disperse, and who may be at risk in this.
    So, I think with that small amount of money, if we can do 
this, it well pays for itself.
    And again, we are working very closely with our customers--
the Department of Defense and also the first-responder-type 
people, FEMA, and people like this, to try to help them out 
also on this, as they go through this first-responder training.

             treaty monitoring and proliferation detection

    Senator Domenici. One of the most important areas related 
to nonproliferation is treaty monitoring and proliferation 
detection.
    The budget request does not seem to place a very high 
priority in that area. Am I in error, or would you comment on 
it?
    Mr. Baker. Well, sir, we still have our treaty monitoring 
capability. As you know, we are building--we are doing research 
for the international monitoring system for the Comprehensive 
Test Ban Treaty [CTBT] as well as other monitoring capabilities 
so that we can detect nuclear explosions underground, 
underwater, and in the atmosphere.
    We still have our detection systems to monitor the current 
treaties that are in effect. For the CTBT, again, we are doing 
all of the R&D for the international system; like I say, for 
underground, atmospheric and underwater.
    So, we feel like it is adequate. We can always use more 
money, but we think right now that we have enough money to do 
what we have to do, which is monitor the current treaties and 
also prepare for a comprehensive test ban monitoring 
capability.

                   spent fuel program in north korea

    Senator Domenici. Let me just ask one question about North 
Korea. There is an increase in the request related to spent 
fuel work in North Korea.
    If you can tell me what is the extent of our activities in 
that regard? What were they in 1997? And what do we expect them 
to be in 1998? What is left to be done under the agreement?
    Mr. Baker. I am happy to say, sir, we have right now--out 
of the 8,000 fuel rods that we have in North Korea that we are 
trying to can, we have canned over 60 percent.
    We--as you know--initially, when we went into North Korea, 
we ran into a lot of problems, a lot of sludge in the pool that 
we did not expect, heating systems that went bad. We had to 
ship in heating systems. We had to ship in more cranes.
    So the program is working very, very well. We plan to be 
done with all 8,000 fuel rods, hopefully, by the end of the 
year; I hope by September.
    My staff says, ``Please say by the end of the year.''
    We are working this very quickly. Ms. Cherie Fitzgerald is 
the person that has been working this full time.
    After we can all of this and tag all of this for IAEA 
safeguards, we are asking for $5 million in fiscal year 1998. 
What is that used for? Well, it is used for equipment 
maintenance. It is used for spent fuel and canister 
maintenance.
    It is for personnel oversight. We have to go over with the 
IAEA and do technical evaluations of all of this to make sure 
it is in the same sealed canisters that we had it in when we 
leave, hopefully, in September.
    Senator Domenici. We seven Senators are going to North 
Korea. They extended the invitation, and they tell us that they 
are going to welcome us and our plane. I have heard that 
sometimes they invite, and then when you are en route, they say 
you cannot come in.
    We are sure hopeful that with the chairman of the 
Appropriations Committee, myself, Senator Thad Cochran, Daniel 
Inouye, and a few others, that they will let us come in and 
talk with them.
    Obviously, we will have some discussion about your program.
    Mr. Baker. Thank you, sir. I hope that they will let you 
in, too. [Laughter.]
    I think they will.
    Senator Domenici. We will see.
    Mr. Baker. We will work that. Ms. Cherie Fitzgerald will 
work that.
    Senator Domenici. I think there are a few people telling 
them it will be kind of important.
    Mr. Baker. Yes, sir; those are the people----
    Senator Domenici. Not that----
    Mr. Baker [continuing]. That control our money.
    Senator Domenici. Not that we are bringing anything with 
us; I mean, we have no gifts.
    Mr. Baker. Yes, sir.
    Senator Domenici. But they would maybe like us to bring 
some food, but our plane is not really one of those kinds of 
planes. So, we cannot do that.
    I have a series of questions that were submitted by Senator 
Reid that he did not ask, and some by Senator Craig. I am going 
to include them in the record and see that you get them. 
Whoever the questions were directed to will get the questions.

             core research and advance technology programs

    Senator Domenici. Let me proceed with just a few questions 
regarding the Core Stockpile Stewardship Program, particularly 
the impact on core research and advance technology work to fund 
some high profile programs and initiatives such as the 
accelerated strategic computing initiative and the national 
ignition facility.
    We have talked about that and my concerns are that these 
high profile initiatives are important and have to be 
maintained if we were going to have a reliable Stockpile 
Stewardship Program.
    But these new initiatives should not be undertaken at the 
expense of the basic core competency of the national 
laboratories. How do these core research and advance technology 
activities contribute to the stewardship maintenance mission?
    And what vulnerabilities do you see, Dr. Reis, in the core 
research and advance technology programs in the near and long-
term, if the downward funding continues in those areas?
    Dr. Reis. Senator Domenici, there are a number of tensions 
that occur within a program that is changing as much as we are. 
Part of the changing is how to invest now in terms of what the 
concerns are in the future.
    Another concern we heard from Dr. Smith is, How do you 
develop a balance between production, which occurs now, 
production in the future and the research?
    Not only do we have to remanufacture, which we know we have 
to do, but we have to do the surveillance to ensure, you know, 
when should we do the remanufacture?
    Then we have to have the assessment. When we replace the 
parts, are they sufficient--are they as good as the old parts? 
Will the weapons work and will they work effectively?
    As you pointed out earlier, we have been going through a 
major change over the past 3 or 4 years. So inevitably one has 
tensions, and one has to make judgments in terms of: Am I 
investing in the future properly, or am I investing in what I 
am doing currently?
    In the past, the way the weapons complex and the 
laboratories operated, in particular they had a large core 
research effort. That core research expanded and contracted 
depending upon the new development requirements.
    If there was a lot of development work, the core research 
was contracted, perhaps. And then the people who were working 
on the core worked on a new development.
    That paradigm is changing now. That model is changing. 
Clearly, we cannot eat our seed corn as we are working on 
current problems. On the other hand, if we do not plant that 
seed corn properly, it will never work.
    I think we have a reasonably good, balanced program right 
now. I am concerned, certainly as you are. Is the program 
balanced properly? All the time, that is one of the major 
efforts of what we have to do, provide the judgment ourselves. 
We do not do that ourselves. When I say ourselves, I mean the 
DOE/DOD team.
    But that really is, in large measure, judgments within the 
laboratories. I mean, that is where the expertise is. You 
talked about computing earlier. Well, we have to buy the new 
machines. But also we have to develop the codes to use those 
new machines. We have to do the experiments to validate the 
codes for the new machines. At the same time, we have to 
maintain our current production complex.
    Indeed, the thing that I keep coming back to, and I am 
pleased that you keep coming back to, is the people themselves, 
because ultimately this is a judgment call. We have to keep 
investing to ensure ourselves that we have the best and 
brightest people working on these tough problems.

                        defense programs funding

    Senator Domenici. Well, let me just give you a couple of 
examples. I am concerned particularly that the budget request 
might not be adequate for some of these support activities. And 
I am just going to state a few.
    The microelectronics, the weapons physics and advanced 
hydrodynamic radiography effort at Sandia, these have been 
coming down, I understand----
    Dr. Reis. Yes.
    Senator Domenici [continuing]. For 2 years. But I am 
concerned whether this is going to create a problem as it 
relates to the capability of the national labs to solve 
critical issues of the aging stockpile.
    Could you comment on that?

                          the aging stockpile

    Dr. Reis. Again, we are trying to balance those as best one 
can. Those are important issues; there is no question in my 
mind. Those are important issues.
    We will try to be perhaps more specific and answer that 
question in terms of where we are going. Again there are always 
balances and judgment calls that we are making.

           dual axis radiographic hydrodynamic test facility

    Let us take one very specific important area. It is the 
dual axis radiographic hydrodynamics test facility [DARHT]. We 
are working--as I mentioned in my testimony, we are pressing 
hard on the DARHT facility.
    Senator Domenici. Yes.
    Dr. Reis. Well, we want to be sure we get the DARHT 
facility working properly. We want to be looking at the next 
step, you know, basically the next step beyond that.
    We want to be sure we nail one down firmly before we are 
sure what the next step might be, so there is a balance. 
Basically, there is a balance. There is a balance there that 
has to take place.
    We feel pretty comfortable in the budget we are presenting 
to you, that we have done that balance about right. But we have 
just got to keep working that problem in the future to be sure 
that we do not get in those situations, as you mentioned.

                       national ignition facility

    Senator Domenici. Let me talk a little bit with you about 
the NIF facility.
    Dr. Reis. Yes.
    Senator Domenici. My questions today will not go into the 
scientific pros and cons, but it will be relegated to issues of 
cost----
    Dr. Reis. Yes.
    Senator Domenici [continuing]. And cost overruns, and it 
will all be predicated upon if we fully fund NIF. And I said 
that ``if'' first.
    The total construction cost has increased from $842.6 
million to $1.046 billion. And the program cost has gone from 
$1.074 billion to $1.199 billion, $1.2 billion.
    Now I think it is very important that we look at history, 
and frankly, the Department of Energy's history on major, big, 
big projects is pretty abysmal. I do not have the statistics in 
front of me, but for major facilities, there are many of them 
that never reach----
    Dr. Reis. I can----
    Senator Domenici [continuing]. Fruition, never completed or 
utilized after a lot of money was put in them. Part of the 
reason for them not reaching fruition, not totally, but part of 
it is that the costs skyrocket, and then they are easy prey 
because they get to be very big. Big overruns make noise and 
draw attention.
    So could you tell me what the Department is doing to assure 
that overruns are held in check and that when we decide whether 
we are going to proceed with this project, that we know the 
costs?

                   defense asset acquisition account

    Dr. Reis. Yes, Senator. I think one of the advantages of 
full asset funding is you authorize the whole project in one 
chunk, and that is it. Then we basically have to live with 
that. So, that is a help.
    Whether full asset funding gets approved or not, we have 
really gone through extraordinary measures on the national 
ignition facility to ensure ourselves that that overrun 
situation, the schedule slip, does not take place.
    We have had extensive external review by people who are 
expert in these things, not just within the Department, but 
outside of the Department.
    Because the national ignition facility is relatively large 
from a Defense program's perspective, we have gone more than 
the extra mile on that.
    We feel quite confident that we will be able to pull that 
out despite the Department's experience on a number of programs 
is as you have mentioned. It is frequently mentioned to me in 
hearings, not just in this committee, but other hearings as 
well.
    I hear about the Clinch River breeder reactor and 
superconducting super collider and a number of other situations 
as well.
    One of the things we have done is spend the extra time up 
front. If you look at the problems that those particular 
projects ran into trouble with, inevitably--by the way, this is 
true not just for DOE problems, but DOD ones and civilian ones.
    As you know, it is that you do not have the proper 
understanding of what the technology is, of what the costs are 
up front; you do not do the designs properly. You move to step 
two before you have completed step one.
    That is why, as you have noticed, the numbers have gone up, 
because we have spent the year working through detailed design 
reviews, scope changes, getting the contractors on board, and 
getting a much better understanding of where we are going 
before we started construction.
    I think we have a very good plan. We have scrubbed it up 
and down, back, forwards, et cetera, every way, every which 
way. We brought in not just the people who tell you how it does 
not work, but the people who have worked it.
    The Department really has done a number of projects like 
the light sources and a number of other projects where, in 
fact, they have brought projects in on time, on schedule and 
actually, in some cases, under budget. Those are the people we 
have brought in to help us work with the national ignition 
facility.
    Senator Domenici. Dr. Smith, I note you have been having a 
conversation with one of your staff. Are you on a timeframe 
that is urgent? We can excuse you, if you need be. I will just 
submit the few questions I have in writing.
    Dr. Smith. Mr. Chairman, you are, as always, a perfect 
gentleman.
    No, I want to make sure that I am up to date on some 
ancillary points that Dr. Reis mentioned. I am under no time 
constraint.
    Senator Domenici. All right.
    Let me say, you should have added also that you have built 
into it some additional flexibility as I understand it, Dr. 
Reis.
    Dr. Reis. That is correct. That is the part of, as I 
mentioned, what makes a good project. You have contingencies. 
You are honest with those, to start out with.
    Certainly, within Defense programs, and the Department, we 
are quite comfortable that for NIF we really have looked at not 
just lessons from the things that did not work, but also 
lessons from the things that did work.
    The team we have, remember, brought in NOVA on time and on 
budget. That has been a very, very successful experimental 
facility--as well as the work we have done on OMEGA at the 
University of Rochester.
    Again, there is a record of success on these types of 
projects within the Department of Energy, I think, that is 
world class.

                   national environmental policy act

    Senator Domenici. This is really an aside, but I think it 
is good to discuss it with both the Defense representation and 
the DOE's representation.
    I have no answer to this situation, but I will inquire of 
the Department with regard to the cost of using NEPA, the 
National Environmental Policy Act, as one of the major tools 
for determining whether we do things at our national 
laboratories, and whether the DOE is moving ahead with new 
activities.
    My own view is that I do not think that NEPA was ever 
intended to be a planning tool. In fact, I think the way it is 
written up in law and applied, it is really not intended to be 
that. It was not intended that every project of every size, 
anywhere, have full National Environmental Protection Act 
application.
    I do believe it is relevant to note that huge numbers of 
our projects and programs within the Department of Energy 
cannot move without a full EIS.
    And I am not now critical of the Department, at least not 
yet, because for the most part, they have been ordered to do 
that, or lost the case where a judge says they must.
    And I am not adverse to NEPA. I am just somewhat cognizant 
of the fact that it is not really intended to be a day-in/day-
out planning tool for the maintenance of a national laboratory, 
or for improvement or additions.
    It is supposed to be there if there is a major Federal 
action taking place. And so in due course, it would seem to me 
that becomes important in this program, because to the extent 
that it requires long delays from a project's origin to turning 
the first shovel of dirt and finishing the project, is very, 
very important to a program such as stockpile stewardship and 
management.
    Again, today, I do not expect any comments, but I would say 
that I would think the Defense Department would be interested 
in whether the application NEPA is now just a matter of 
routine, when some discretion ought to be used.
    And perhaps Congress ought to be asked in some instances 
what Congress thinks about some of these things, certainly in 
the authorization process or maybe in the appropriation bills.
    So, I just make that observation. If it prompts either of 
you to make a comment, fine. If not, we will follow it up with 
the Secretary of Energy.

           dod views of national environmental protection act

    Dr. Smith. Mr. Chairman, I commend what you have said. And 
I hope you will continue to follow your line of reasoning. I 
think you are on point.
    Let me give the response from the DOD point of view. That 
is, if ever and whenever we feel that national security is 
being threatened by impractical application of NEPA, then we 
have exactly the responsibility that you just said.
    I would, of course, bring it first to my superiors in 
Defense. We would find a way to make sure that the Congress 
understand that we, in Defense, are worried about EIS-this or 
EIS-that. So your point is well taken, sir.
    Senator Domenici. Well, I want to be a little more specific 
with Vic, because I do not want you here today necessarily 
trading the Department's views. I am not asking for that.
    But maybe you could supply, for the record, how much the 
EIS for stockpile stewardship has cost. Could you do that for 
us?
    Dr. Reis. Surely.
    Senator Domenici. And I understand that with reference to 
NIF, an environmental group has just asked a judge who ruled on 
this issue to reconsider whether DOE is fulfilling its 
obligations under an old EIS.
    Could this judge question all of your plans?
    Dr. Reis. Judges can certainly question anything they wish. 
But----
    Senator Domenici. Are they apt to in this case, basically?
    Dr. Reis. I do not know the answer to that.
    Senator Domenici. All right.
    Dr. Reis. Senator, I do know we feel comfortable with the 
substance of the Stockpile Stewardship and Management 
Environmental Impact Statement. We spent a lot of time and a 
lot of effort on it.
    But we think it is an excellent document. We believe 
Secretary O'Leary supported it. She went on the record a record 
of decision last December. It has been some months since that 
has been out.
    Our General Counsel people feel very comfortable that we 
have complied with the law, and the spirit of the law, 
certainly. We will certainly keep you informed in terms of what 
is happening there.
    Senator Domenici. Well, maybe if you can, along with your 
submittal on the very targeted portion, I just ask for dollar 
numbers on stockpile stewardship.
    Dr. Reis. Well, I think you asked for them all. I took the 
question as saying not just the stockpile stewardship.
    Senator Domenici. Well, I----
    Dr. Reis. But all of those, because, for example, we have 
Nevada. The environmental impact statement, as you know we have 
the environmental impact statement for DAHRT.
    Senator Domenici. That is fine.
    Dr. Reis. Did I get the sense of your----
    Senator Domenici. I will modify it as to the extent that I 
do not think I said that. I am now saying that.
    Dr. Reis. Oh, OK. [Laughter.]
    [The information follows:]
  Costs of Environmental Impact Statements for the Office of Defense 
                                Programs
    The estimated cost to prepare Environmental Impact Statements 
(EIS's) for the Office of Defense Programs (DP) from January 1990 to 
March 1997 is approximately $111.3 million, including an estimated 
$20.0 million for the Reconfiguration Programmatic Environmental Impact 
Statement (PEIS), which was not completed, (see Note 2 of Table 1), and 
$16.4 million for five EIS's currently in preparation or planning. The 
breakout of costs for each of the EIS's is shown in Table 1, which 
follows.
    In accordance with the Council on Environmental Quality regulations 
(40 CFR 1500-1508) and the DOE National Environmental Policy Act (NEPA) 
Implementing Procedures (10 CFR 1021, as amended), DP uses programmatic 
and site-wide EIS's to support broad decisions and as a basis for 
tiering subsequent narrower decisions. In addition, DP prepares site-
wide EIS's for its sites to assess the individual and cumulative 
impacts of all activities at those sites. In the past seven years, DP 
has completed two major programmatic EIS's and three site-wide EIS's 
that have assisted in making decisions for the future direction of the 
nuclear weapons complex. The costs of these documents constitute over 
95 percent of the expenditures on DP EIS's, and represent an investment 
for the future of the DP mission. Whenever possible DP has included 
specific project analyses in programmatic and site-wide EIS's; these 
specific projects might have required separate EIS's or Environmental 
Assessments had they not been included in these EIS's. These 
extraordinary documents represent a one-time investment involving 
multiple programs and large sites, a heightened level of technical 
controversy, extensive data gathering and analytical requirements, and 
extensive public involvement. The cost to prepare these documents is a 
small percentage of the total project or program costs (much less than 
1 percent). With the completion of these documents, our future NEPA 
compliance costs will be considerably less than in preceding years.

 EIS COSTS TO DATE FROM JANUARY 1990 TO MARCH 1997 FOR PAST AND CURRENT 
                             DP ACTIONS \1\                             
                          [Dollars in millions]                         
------------------------------------------------------------------------
     EIS title continued            EIS type       Cost      Completed  
------------------------------------------------------------------------
Operation of Lawrence          Site-wide........    $9.0  11/06/92.     
 Livermore National                                                     
 Laboratory/Sandia National                                             
 Laboratories, Livermore.                                               
Dual Axis Radiographic         Project..........     3.0  09/08/95.     
 Hydrodynamic Test Facility                                             
 (DARHT) at Los Alamos                                                  
 National Laboratory.                                                   
Tritium Supply and Recycling   Programmatic.....    21.0  10/27/95.     
 \2\.                                                                   
Nevada Test Site and Off-site  Site-Wide........    10.4  10/18/96.     
 Locations in the State of                                              
 Nevada.                                                                
Stockpile Stewardship and      Programmatic.....    16.0  11/15/96.     
 Management \2\.                                                        
Continued Operation of the     Site-Wide........    15.5  12/13/96.     
 Pantex Plant and Associated                                            
 Storage of Nuclear Weapons                                             
 Components.                                                            
Los Alamos National            Site-Wide........  \3\ 21  03/31/98.     
 Laboratory.                                          .0                
                                                  \4\ 14                
                                                      .9                
Construction and Operation of  Project..........  \3\ 3.  07/31/98 \3\. 
 an Accelerator for the                                0                
 Production of Tritium at                         \4\ 0.                
 Savannah River Site.                                  8                
Selection of One or More       Project..........  \3\ 4.  09/25/98 \3\. 
 Commercial Light Water                                0                
 Reactors for Tritium                             \4\ 0.                
 Production.                                           4                
Sandia National Laboratories/  Site-Wide........  \3\ 13  01/22/99 \3\. 
 New Mexico.                                          .0                
                                                  ( \4\                 
                                                       )                
Tritium Extraction Facility    Project..........  \3\ 1.  09/15/98 \3\. 
 at Savannah River Site.                               4                
                                                  \4\ 0.                
                                                       3                
------------------------------------------------------------------------
\1\ This table does not include several Savannah River Site EIS's, which
  were started as Defense Programs EIS's, but were finished after the   
  Site's transition to the Office the of Assistant Secretary for        
  Environmental Management. Costs include Federal staff, support        
  contractor, and management and operating contractor expenses.         
\2\ Cost for the Reconfiguration PEIS of $20.0 million, which included  
  cost of activities between issuing the Notice of Intent on February   
  11, 1991, and issuing the Notice of Intent to separate the            
  Reconfiguration PEIS into the Stockpile Stewardship and Management and
  the Tritium Supply and Recycling PEIS's on October 28, 1994, is not   
  included in the cost of each of the subsequent EIS's.                 
\3\ Estimated total.                                                    
\4\ To date.                                                            


    Senator Domenici. I thought I said stockpile stewardship, 
but you excite me by saying you have--you are willing to do 
some more. [Laughter.]
    Dr. Reis. Well, I got the impression you were concerned 
about the whole issue. I think we will try to answer that 
question as best we can.
    Senator Domenici. You are absolutely right; who knows what 
a judge will do? Some people assume that because judges make 
rulings, that really was the intent of Congress. It is obvious 
that, many times, it is not. And yet we have watched all of 
this evolve without much attention up here.
    So maybe we do not have enough time to go look at----
    Dr. Reis. Well, I certainly would appreciate your interest 
in that subject.
    Senator Domenici. Well, we are interested. You have that--
--
    Dr. Reis. Right.

                           tritium production

    Senator Domenici. I have a number of other questions for 
the subcommittee and some submitted by Senator Burns and 
Senator Dorgan, but I am going to concentrate in one area and 
then submit the rest of them.
    Let us talk a little bit about the Tritium Supply Program. 
As I understand it, the budget request for fiscal year 1998 is 
$184.5 million. That is about a $35 million increase from the 
$150 million that we provided in last year's bill.
    The Department's dual-track strategy for providing an 
assured source of tritium from either the accelerator, which we 
call the APT, or from the commercial light water reactor, the 
CLWR, the Department is expected to make the technology 
decision in late 1998.
    Am I correct so far?
    Dr. Reis. That is correct.
    Senator Domenici. The technology that is not selected will 
be developed, if feasible, as a backup source. Secretary 
O'Leary late last year directed that the fast flux test 
facility at Richland, WA, be retained in whatever it is called.
    Dr. Reis. I think it is in standby mode, I believe.

                   accelerator production of tritium

    Senator Domenici. Yes; on standby mode as additional 
source. So let me go on now.
    The budget request supports the initiation of the 
preliminary design on the accelerator production, APT, of $168 
million, and detailed design of the tritium extraction facility 
to be located at Savannah River, at $39.5 million.
    Can you describe, briefly, the status of the accelerator 
production of tritium, and the commercial light water reactor 
production?
    Dr. Reis. I would be glad to, Senator. Both of those 
programs are on schedule. They are moving well. Concerning the 
accelerator production of tritium. There have been a number of 
technology demonstrations about some of the critical areas that 
people were concerned about at the Los Alamos National 
Laboratory.
    All of those are doing, I should say, extremely well. Some 
of the components are actually working better than people had 
said at their requirements level.
    We have brought on the potential prime contractor, Burns 
and Roe, with General Atomics, as a major subcontract to them. 
We have pulled together, I think, a very good management team 
led at this time by the Los Alamos National Laboratory.

                     commercial light water reactor

    So, I am quite pleased with the progress there.
    Similarly, concerning the commercial light water reactor, a 
draft request for proposal has gone out for the utilities for a 
potential either purchase or radiation source purchases. So 
that is on schedule as well.
    As you point out, the extraction facility, which we would 
need as a backup in any event, is going forward.
    So again, what we are trying to do on that program is 
manage that similar to the national ignition facility, in the 
sense that we are trying to ensure ourselves that all of the 
technical bugs for the accelerator or all of the concerns that 
one might have are all worked out ahead of time, so that when 
Secretary Pena makes a decision, in which direction it goes, 
when we get a go for it and present it to you, that you can 
feel comfortable that there is not going to be an overrun 
sometime later in the program, or the program will not meet 
its, I should say, demanding schedule that has been put forward 
to us by the Department of Defense.
    Senator Domenici. Dr. Smith, I assume that this dual-track 
approach, even though one of the tracks contemplates the 
accelerator technology which has not yet proven itself in the 
field, that the Department of Defense approves of this and 
thinks this is the right way to go.
    Dr. Smith. Oh, we definitely want the dual track. And I 
will say right away, Mr. Chairman, that the progress that Dr. 
Reis has just cited will be reviewed very carefully and in 
depth by the Nuclear Weapons Council.
    We definitely want two tracks because there is technical 
risk associated with the APT, and there is legal risk 
associated with the commercial reactor approach.
    This is not the right time to make a decision. So we will 
rereview this periodically, certainly within the year.
    Senator Domenici. Dr. Reis, you do not have to answer this 
now, but what I would like you to do for the record is state 
for us the technical, regulatory, and legal concerns that would 
jeopardize or delay current production schedules for both of 
these alternatives and to relate those potentials to the 
milestones that you have in your current plan.
    Would you do that for the record for us, please?
    Dr. Reis. I would be glad to, Senator.
    [The information follows:]
 Technical, Regulatory, and Legal Issues Regarding the Tritium Supply 
                                Options
    For the Accelerated Production of Tritium (APT), the initial 
technical concerns centered on the need to integrate the individual 
components of the system into a production facility capable of 
continuous operation. Thus, during the past year and the next two 
years, the Department will design, build, and test critical components 
of the accelerator system and the results of these tests will be 
important inputs to the final design. Prior to a final selection 
decision the main areas of technical uncertainties have been completely 
resolved and are not expected to impact the plan for first production 
during commissioning in 2006 and 2007 with production at the full rate 
in 2007. Many of our initial individual technical concerns have already 
been settled by some earlier tests or the evolution of the design. The 
integration and operation of the low energy portion of the accelerator 
at full power will provide valuable data regarding system availability, 
component reliability, and beam dynamics. Target/blanket prototype 
demonstrations will confirm predictions of tritium production 
efficiencies and demonstrate the fabricability of target/blanket 
components.
    There are no significant regulatory concerns for the accelerator 
and the Department does not foresee any legal issues as long as the 
accelerator is built at an existing DOE site (Savannah River Site).
    With over 10 years of research, development, and testing completed 
to date, the technical aspects of producing tritium in commercial 
reactors are well characterized. To confirm these past results, the 
Department is conducting various laboratory tests and is planning to 
irradiate lead test assemblies in an operating commercial reactor this 
fall. However, the work done to date demonstrates that production of 
tritium in a light water reactor is technically straightforward.
    With regard to regulatory issues, any commercial reactor engaged in 
tritium production will be required to obtain an amendment to its 
operating license. If the Department purchases an existing reactor, the 
NRC license may have to be transferred or terminated. If the 
Department's tritium strategy involves the completion of a partially 
completed reactor, there will be regulatory requirements that must be 
met before operation may commence. The Department has developed 
regulatory ``roadmaps'' for each of the three acquisition scenarios. 
The CLWR Project schedule includes sufficient time for the regulatory 
process to be completed.
    The Department will shortly be submitting draft legislation to 
Congress to address several issues concerning the commercial reactors. 
These include: (1) Sec. 103 of the Atomic Energy Act: The Department of 
Energy is seeking authority for the Nuclear Regulatory Commission to 
license a nuclear power plant owned and operated by the Department, if 
necessary. (2) Sec. 210 of the Department of Energy National Security 
and Military Applications Act of 1981 (42 U.S.C. 7272): For purposes of 
producing tritium in commercial reactors, the Department is seeking a 
waiver of the prohibition of the Nuclear Regulatory Commission from 
using appropriated funds for licensing activities for any defense 
activity or facility of the Department of Energy. (3) Sec. 57(e) of the 
Atomic Energy Act (42 U.S.C. 2077): The Department of Energy is seeking 
clarification of this provision, which addresses the production of 
special nuclear material for nuclear-explosive purposes in licensed 
(commercial) facilities. Even though tritium is not a special nuclear 
material, this Section could be open to an interpretation, not intended 
by the drafters, which could prohibit the fuel in commercial reactors 
from being used to produce tritium for defense purposes.
    Additionally, Sec. 44 of the Atomic Energy Act (42 U.S.C. 2064) 
enables the Secretary of Energy to sell or use for Department purposes 
any power produced at production facilities. The Act does not address 
power produced at commercial facilities involved in tritium production. 
The Department is seeking to expand upon the authority of Sec. 44, 
authorizing the sale of power generated by a tritium-producing 
commercial reactor.
    On January 28, 1997, the Department released a draft Request for 
Proposal from nuclear utilities to sell to the Department a reactor(s) 
or irradiation services. Several utilities have expressed, both 
verbally and formally, that they believe a formal congressional 
expression of support for the use of commercial reactors in tritium 
production is necessary as a predicate to utility participation in the 
long-term program.
    While production of tritium in commercial reactors is not expressly 
prohibited under the Atomic Energy Act or any other law, the 
legislation to be submitted by the Department would erase any doubt as 
to the authority of the Secretary to engage in this activity.
    To address these issues, the Department is seeking to amend Sec. 91 
of the Atomic Energy Act to assure the utility community, the Nuclear 
Regulatory Commission, and the Department that the Secretary has 
specific authority to: (1) be considered a ``person'' and able to own 
and operate a nuclear power plant under license; (2) use a commercial 
nuclear power plant to produce tritium for defense purposes, by either 
lease or purchase; and (3) sell power produced by such a plant under 
regulation by the appropriate Federal and State agencies.
    The CLWR schedule permits sufficient time to address these issues 
and still meet the requirement of delivering new tritium gas in 2005. 
The schedule includes significant time to address legal or regulatory 
contingencies.
    The APT Project can meet the required date. Based on the schedules 
and milestones identified in the APT Conceptual Design, the Department 
of Energy, as well as the Nuclear Weapons Council, is satisfied that 
the APT is capable of meeting the tritium requirement dates outlined in 
the Nuclear Weapons Stockpile Memorandum. The project schedule, 
however, is dependent on the availability of adequate project funding. 
Full funding of preliminary design in fiscal year 1998, final design in 
fiscal year 1999, and construction in fiscal year 1999 is necessary to 
ensure first production is achieved during commissioning in 2006 and 
2007 with production at the full rate in 2007.

                          tritium requirements

    Senator Domenici. In general terms, how do the total 
tritium requirements change under START II or START III 
situations? How are they to be compared to current requirements 
and the date that the newly produced tritium will need to be 
available?
    Who knows the answer to that?
    Dr. Reis. I will start the answer to that. I will take the 
easy part first. We do not know what START III would be. I will 
turn that over to my colleague.
    Senator Domenici. He may not know either.
    Dr. Reis. I suspect he does not know either.
    But the way it currently works, actually, there is not very 
much difference between, you know, START I or START II from our 
perspective because, after all, we are expected to be able to 
produce the tritium for the inactive reserve as well as the 
active reserve.
    So while the numbers change, in terms of START I or START 
II, our requirements as set forward by the Department of 
Defense would not be that much different. Those are the 
requirements, by the way, that we are designing our system to 
meet.
    Senator Domenici. Dr. Smith?
    Dr. Smith. Despite the complex nature of the problem, I 
will give you a strangely quantitative answer. Under the lead 
and hedge strategy, which we do impose upon DOE, under the 
hedge strategy--that is, the ability to return to START I 
levels--we will need new tritium by the year 2005. And I think 
that that is well understood, well studied.
    If sometime between now and that date, we decide that we 
can safely go to the START II levels, then we do not need new 
tritium until sometime after 2010. I think that that is as good 
a measure as we can provide right now.
    And I think we feel very confident that we understand the 
situation.
    START III, Victor is right. I do not know the answer.
    Senator Domenici. Well, look, I think you gave us just what 
we need. And we have to keep the eye on that ball, because we 
have a lot of people challenging the Department of Energy on 
this one.
    We have certain Senators who, you know, have taken the 
position that one of the reasons we do not need a Department of 
Energy is because of their inability to address this issue. 
That is not my position.
    But I think it is very important that the highest echelons 
of the Department of Defense be stating the case that things 
are going all right and the Department of Energy is not 
dragging its feet and it is not anti, and it has nobody over 
there trying to thwart this effort.
    I gather that if such was the case as of this hearing date, 
somebody would be telling me about that, or somebody would be 
calling the office to report from the Defense side that this is 
not working well.
    I do not want to wake up on the Senate floor with somebody, 
as I am marking up this bill, somebody saying the Department of 
Defense challenges the Department of Energy's schedules and its 
plans, or the like.
    Is it fair to assume that will not happen, at least as of 
today's facts, in the Department of Defense?
    Dr. Smith. You may rest easy, Senator.
    Senator Domenici. OK. I think we have maybe 20 or 30 
questions directed mostly at Dr. Reis. We will submit those for 
your response.
    Dr. Reis. When will you be back from North Korea?
    Senator Domenici. I will be back--well, if they let us in--
[Laughter.]
    And let us out--[Laughter.]
    We will be back----
    Dr. Smith. Or let us out might be the----
    Dr. Reis. Right.
    Senator Domenici. We will be back when the Senate comes in. 
I am not coming back before then.
    Dr. Reis. Well, good luck on your trip, Senator.
    Senator Domenici. Thank you.
    Mr. Baker, do you have anything further to comment?
    Mr. Baker. No, sir; just good luck on your trip.
    Dr. Smith. Yes.
    Senator Domenici. We will not be in areas where you have 
done most of your work. You know, I tried to do that, but 
frankly, I said: ``Why do I not leave the group and go on over 
into the area where I could visit a couple of your facilities 
that you worked on? ''
    But you know, in Russia, that is just not so easy. That is 
4,000 miles.
    Mr. Baker. It is a long way, sir. But hopefully, you will 
go back and we can show you a lot that we have done.

                     Additional committee questions

    Senator Domenici. I keep hearing the Russian leaders would 
like to see me and talk with me about this. And where I am 
going, apparently, there is nobody interested in this. So--but 
that is all right, too.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]

                Questions Submitted by Senator Domenici

                    support to department of defense
    Question. Dr. Reis, is the nuclear weapons stockpile safe and 
reliable, and does DOE have the capability to support the requirements 
of the Defense Department?
    Answer. The nuclear weapons stockpile continues to be safe and 
reliable. The Department of Energy and Department of Defense have 
expressed, in the joint Annual Certification Report, that it is not 
necessary to return to underground nuclear testing at this time to 
validate the safety and reliability of the nuclear weapons stockpile. 
The Stockpile Management program fully supports the fiscal year 1998 
requirements, as defined in the President's Nuclear Weapons Stockpile 
Plan.
           confidence in stockpile stewardship and management
    Question. Dr. Reis, how long will we have to wait until it can be 
determined that the science-based Stockpile Stewardship program works?
    Answer. The Science-Based Stockpile Stewardship program is working 
now. First, the Department has successfully addressed an issue with the 
Trident I (W76) warhead by using a combination of analysis, new 
experimental data, archived test and manufacturing data, and, most 
importantly, the collective judgement of the weapon design 
laboratories. This success in using today's tools gives us confidence 
that the even more powerful testing tools to be developed will allow us 
to solve future stockpile problems without underground testing. Second, 
on February 7, 1997, the Secretaries of Energy and Defense certified to 
the President that the stockpile is ``safe and reliable'' and that 
``there is no need to conduct an underground nuclear test at this 
time.'' This certification came after an exhaustive review of all 
active and inactive weapons types by the weapons laboratories and the 
DOD-led joint Project Officers Group.
                         department of defense
    Question. Dr. Smith, is the Department of Defense satisfied and 
confident that the science based Stockpile Stewardship and Management 
Program will be able to meet the requirements of the DOD the further we 
move away from underground testing?
    Answer. With several caveats, the answer is ``yes.'' Maintenance of 
a safe and reliable enduring stockpile of nuclear weapons is in the 
supreme national interest of the United States. DOD is currently 
satisfied that the science based stockpile stewardship and management 
program will meet the requirements of the Nuclear Posture Review. Our 
level of confidence in the stockpile will depend on the nature and 
scope of the problems that arise in the enduring stockpile. The 
Stockpile Stewardship and Management Program (SSMP) is currently our 
best approach to maintaining confidence without underground nuclear 
testing. Should the SSMP uncover problems that could only be rectified 
by testing, the President has stated that he would invoke the ``supreme 
national interest'' clause of the Comprehensive Test Ban Treaty. I am 
confident that this dramatic action will not have to be taken.
    Question. Dr. Smith, does the Defense Department have any concerns 
with the adequacy of DOE's budget request, and DOE's ability to 
maintain the professional core of personnel needed to assure the safety 
and reliability of the nuclear deterrent?
    Answer. Stewardship of the nuclear stockpile requires a highly 
qualified and motivated staff of experts. Without a strong commitment 
to sustain the enduring stockpile, expertise will erode. DOE must 
provide an adequate and stable funding base to perform this crucial 
work. We must protect the core program of stockpile management (e.g., 
nuclear pit refabrication and certification) and look for new ways to 
attract and retain the best minds. Accordingly, I believe that the 
fiscal year 1998 is adequate, just adequate, for this task.
    Question. Dr. Smith, what do you see as the greatest threat to the 
U.S. and how is that threat being handled?
    Answer. As the Secretary's principal advisor on nuclear weapons, I 
believe there are two classes of threats that require a continued, 
credible nuclear stockpile.
    Over the past few years, Russia has made significant progress in 
diminishing the size of their stockpile and reducing the threat of 
``loose nukes.'' I am proud to play a major role in the Cooperative 
Threat Reduction program that has promoted this effort. However, we 
cannot forget that Russia has a large stockpile of nuclear weaponry--
both strategic and tactical. The erosion of conventional military 
capabilities since the break up of the Soviet Union has left Russia in 
a situation in which it might be more willing to rely on these weapons, 
particularly their large arsenal of tactical nuclear weapons.
    Secondly, there is still a wide assortment of rogue states with the 
potential to develop weapons of mass destruction. I believe that a 
reliable and flexible U.S. nuclear capability to respond to these 
threats is a significant deterrent. The deterrent effect applies to any 
potential proliferant who may consider development or use of these 
types of weapons.
    During the Cold War, the U.S. nuclear stockpile bought our Nation 
time while Communism died of its own inadequacies. In today's evolving 
global security environment, that same stockpile still serves to deter 
a variety of threats.
                             tritium supply
    Question. Briefly describe the current status of the Accelerator 
Production of Tritium (APT) and Commercial Light Water Reactor (CLWR) 
programs to produce tritium.
    Answer. In reference to the APT Project status, during the past 
year the Department has selected a prime contractor to add to the Los 
Alamos/Savannah River team. This prime contractor is Burns and Roe 
Enterprises Inc. teamed with General Atomics. Los Alamos has completed 
the construction of the first test items for the accelerator and others 
are being manufactured. The first of the accelerator components, an 
``injector,'' is working better than expected. Thousands of samples of 
materials, welds, and structures have been or are being irradiated in 
France or at Los Alamos to confirm choices and projections of 
performance for materials for the ``target-blanket,'' which is the part 
of the plant where tritium is actually made. The first results of these 
tests are currently being analyzed. The design of the accelerator has 
now been favorably reviewed by two external review bodies. The combined 
government and contractor team has produced a conceptual design and an 
associated cost estimate that is under intense review by the prime 
contractor and DOE. Due to increased funding in fiscal year 1996 and 
fiscal year 1997, the project has been able to advance some technology 
demonstrations that are key to proving the concept and making an 
informed decision in 1998. By June 1997, the Department plans to 
formally approve the cost, schedule, and technical baseline of the 
project. Assuming congressional support for our fiscal year 1998 budget 
request, in October 1997, preliminary design (Title I) of the APT plant 
will begin. Recently, a decision was made by the Department to adopt an 
integrated normal-conducting superconducting linear accelerator design 
as the basis for the APT conceptual design. Superconducting technology 
provides for easier and more flexible operation and will significantly 
lower the operating costs of the APT plant. We would be happy to supply 
a detailed briefing to you or your staff at any time.
    Regarding the CLWR Project status, there are three general areas of 
activity: (1) development and fabrication of tritium-producing rods 
that will be placed in an operating commercial reactor; (2) acquisition 
and licensing of host reactor(s) or irradiation services; and (3) 
design and construction of a new facility at Savannah River to extract 
tritium from irradiated rods. Current status of each area follows: (1) 
Tritium-producing rod design is completed. Rod parts are being 
fabricated and will be assembled into four Lead Test Assemblies to be 
placed in the Watts Bar reactor this fall for irradiation over a full 
commercial reactor operating cycle to confirm the results from previous 
testing. The U.S. Nuclear Regulatory Commission is providing oversight 
of this activity. (2) A Draft Request for Proposals (RFP) has been 
issued to nuclear utilities. Based on industry comments, it is being 
revised and a Final RFP will be issued in May 1997. DOE expects to 
select host reactor(s) in early 1998. (3) The conceptual design for the 
new Tritium Extraction Facility is being completed and independent 
reviews are in progress.
    Question. How do current schedules for beginning production compare 
with the requirements dates established by the DOD?
    Answer. Presidential direction, coordinated by all agencies, is to 
complete the CLWR by 2005 and the accelerator in 2007. The accelerator 
program is on track to meet the 2007 date. The CLWR schedule meets its 
required completion of 2005.
    Question. In general terms, how do total Tritium requirements 
change under a START II or START III situation; how do they compare to 
current requirements and the date newly produced Tritium will need to 
be available?
    Answer. The Department's present requirement is to plan for new 
production of tritium in 2005 to meet the START I ``lead and hedge 
strategy'' and to maintain a five-year reserve of tritium. When START 
II enters into force, we will meet the START II stockpile requirements 
and protect the ability to support the START I level tritium need date 
and production capacity, as well as maintain the ability to return 
weapons in the START II inactive stockpile to the active stockpile 
should reconstitution to the START I level be necessary.
    While arms reductions beyond the START II level will extend the 
date when new tritium production will be needed, the particulars of a 
START III scenario, such as quantities, types of weapons, and 
assumptions related to the inactive stockpile, have not been defined. 
Without these particulars, it is not possible to accurately assess 
tritium impacts of further arms reductions.
    Question. What is the least cost option to produce tritium under 
START II and START III?
    Answer. Under either Start II or Start III, the least cost option 
for tritium production (based on total life cycle cost) is expected to 
be the Commercial Light Water Reactor (CLWR) project. For the CLWR 
project, the Department is currently evaluating the purchase of an 
existing reactor or purchase of irradiation services. In January 1997, 
the Department issued a draft Request for Proposal and specific 
proposals from the utilities are expected to be received by August 
1997.
    Question. Can the APT and the CLWR each independently provide the 
required quantities of tritium under current program guidance?
    Answer. Yes. Both the accelerator and the reactor paths of the 
Department's dual track strategy are designed for a capacity of three 
kilograms per year. This meets all known requirements.
    Question. Why is it necessary to proceed with Title I and Title II 
detailed engineering and design of the APT option in 1998?
    Answer. Preliminary design (Title I) of the APT plant is planned 
for fiscal year 1998, and final design (Title II) will begin in fiscal 
year 1999. Therefore, we did not request Title II funding in fiscal 
year 1998, but will do so in fiscal year 1999. In order to meet the 
requirement to begin plant operations in fiscal year 2007, preliminary 
design needs to begin early in fiscal year 1998. The earlier (rather 
than later) start allows for better phasing of plant design, 
construction and startup and minimizes the ``spike'' in outlay 
requirements in the budget profile. Schedule risk is reduced by 
allowing for earlier procurement of long-lead items and greater 
opportunity is provided to work around difficulties that may arise.
    Question. What impact would there be if start of Title I design 
were delayed until 1999?
    Answer. Such a delay would greatly increase the risk in the 
program. It would require standing down major segments of our design 
team, adding additional uncertainty that full scale production would be 
achieved. It would make it very unlikely that first production would be 
achieved during commissioning in 2006 and 2007 with production at the 
full (3kg.) rate in 2007. The delay would prevent efficient phasing of 
plant design, construction and startup and would increase the ``spike'' 
in outlay requirements in the budget profile. Schedule and cost risk 
would increase by delaying procurement of long-lead items and reducing 
the time available to work around any difficulties that may arise. 
There would also be additional risk to technical performance since some 
design tasks would need to be performed simultaneously.
    Question. What is the total cost of Title I design and construction 
for the APT project and the Tritium Extraction Facility proposed in the 
budget?
    Answer. For the APT project the estimated cost of preliminary 
design (Title I) is $168 million and the estimated cost of final design 
(Title II) is presently $274 million. Beginning in April 1997, the 
detailed construction cost estimate that is part of the conceptual 
design report for the APT will be reviewed by an independent cost 
estimate (ICE) team as part of the normal DOE review process. After 
completion of the ICE and any necessary reconciliation, DOE will 
release the APT construction cost estimate. This is expected to occur 
by June 1997. We expect it to be in the neighborhood of $3 billion.
    For the Tritium Extraction Facility, the total cost for Title I 
design (Preliminary Design) is $5.24 million and for Title II design 
(detailed design) is $34.26 million. The total cost for construction 
will be established when the Conceptual Design Report is completed in 
May 1997. A ``not-to-exceed'' construction estimate has been 
established at $285.5 million.
    Question. What is the minimum amount required in 1998 to initiate 
only the Title I design for each project?
    Answer. For the APT project, DOE is requesting $168 million in 
fiscal year 1998 for full funding of preliminary design (Title I). The 
obligation in fiscal year 1998 will be $67.9 million. This request is 
consistent with instructions issued by OMB Circular No. A-11, 
``Planning, Budgeting, and Acquisition of Fixed Assets'' for full 
funding of major phases of a project.
    Full funding for the design of the Tritium Extraction Facility is 
requested in fiscal year 1998 ($39.5 million). The obligation rate is 
to be as follows: in fiscal year 1998, $9.6 million will be committed 
to complete the Title I design ($5.24 million) and to initiate the 
detailed design fixed price contract ($4.36 million). In fiscal year 
1999, detailed design ($17.2 million) will continue and be completed in 
2000 ($12.7 million).
    Question. The budget document indicates that construction cost of 
the Tritium Extraction Facility to be around $120 million and that the 
Conceptual Design Report will be completed during the 3rd Quarter of 
1997. What is the current baseline construction cost for the facility, 
and how confident are you of this cost estimate?
    Answer. We have developed a ``not-to-exceed'' construction estimate 
of $285.5 million. The fiscal year 1998/1999 Congressional Budget 
Submission data sheet clearly stated, ``the fiscal year 1999 request is 
a preliminary estimate for construction activities only and includes no 
contingency funds. The Tritium Extraction Facility Conceptual Design 
Report is to be completed 3rd Quarter fiscal year 1997 and the project 
baselined in 4th Quarter fiscal year 1997. Full construction funding 
requirements will be available following approval of the project 
baseline. We remain fully confident in this estimate. We currently 
expect to request construction funds in the fiscal year 1999 budget 
cycle.
    Question. What technology is assumed in the Conceptual Design 
Report and how would the design and construction cost change if another 
technology were selected?
    Answer. A CLWR will produce tritium by irradiating 1000-3000 
tritium-producing rods over a normal operating cycle of 12-24 months. 
The rods are stainless steel tubes containing the Lithium-6 isotope. 
The Tritium Extraction Facility will remove tritium from radioactive 
rods previously irradiated in commercial reactors. Generally, the 
extraction process involves heating punctured stainless steel rods to 
high temperatures to drive off the tritium. Because of the 
radioactivity, rods will be handled with robotic, remotely operated 
equipment in heavily shielded rooms.
    Because CLWR rods are stainless steel clad and extracting tritium 
from them requires a high-temperature, high-vacuum process, the 
existing Savannah River Extraction Facility cannot be used. Using 
different processes, the old facility handled aluminum rods from the 
Savannah River heavy water reactors. If necessary and with some 
modifications, the technology of the new Tritium Extraction Facility 
will be able to accommodate the APT's alternate lithium-aluminum 
target. No additional or alternate technologies are feasible for the 
extraction of tritium from rods irradiated in a commercial light water 
reactor.
                    national ignition facility (nif)
    Question. How important is the National Ignition Facility (NIF) to 
the national security strategy of the country?
    Answer. A key element in our national security policy is seeking a 
Comprehensive Test Ban Treaty while maintaining our nuclear deterrent. 
Science-Based Stockpile Stewardship (SBSS) is essential for this 
element of our policy, and the National Ignition Facility (NIF) is 
critical to the success of SBSS. The NIF is the only planned facility 
that can provide a window into weapon physics at temperatures and 
densities close to those occurring in nuclear weapon detonation.
    Question. How do the NIF and the other elements of the Science 
Based Stockpile Stewardship strategy, such as the Advanced Strategic 
Computing Initiative (ASCI), complement each other? In other words, how 
do they work together to form a comprehensive, effective program to 
support the nuclear deterrent?
    Answer. Through integrated planning by DOE and the national 
laboratories, the Stockpile Stewardship program maintains a 
comprehensive and effective program to support a nuclear deterrent. The 
inertial fusion program and NIF need the ASCI provided tools and 
capability and ASCI needs the data and validation NIF will generate. 
For example, through experiments designed to examine physics issues at 
the relevant temperatures and densities, the NIF will validate 
components of complex models and simulations used in weapon simulations 
and provide data for use in the next generation of three dimensional 
codes. Through ignition experiments, the NIF will provide stringent 
tests of integrated performance, into the high temperature regime, of 
computer codes that predict weapon performance. NIF will use codes to 
help optimize the operation of the NIF and support the design of key 
NIF experiments.
    The Stockpile Stewardship program also uses advanced computing to 
analyze and judge nuclear weapon issues as they arise. Both the physics 
and ASCI programs are developing needed simulations and models to 
address these issues. ASCI is developing the systems to support the 
simulations including: the trillion operations per second computers, 
the mass storage and data transfer methods, and additional problem 
solving enhancements such as high fidelity visualization technology. 
The ASCI program is providing essential capability to simulate weapon 
performance and assess weapon safety.
    Question. How does the NIF contribute to the arms control and 
nonproliferation goals of the country?
    Answer. In December 1995, the Department's Office of Arms Control 
and Nonproliferation issued a study entitled, ``The National Ignition 
Facility (NIF) and the Issue of Nonproliferation.'' The report states, 
the NIF ``* * * contributes positively to U.S. arms control and 
nonproliferation policy goals by allowing the U.S. to sign and abide by 
a zero-yield CTBT (Comprehensive Test Ban Treaty) and by providing the 
U.S. continued confidence in its weapons to allow for further 
reductions * * *.'' It further concludes that: ``The technical 
proliferation concerns at the NIF are manageable and therefore can be 
made acceptable.''
    The draft study was reviewed by seven independent experts and 
coordinated with the U.S. Departments of Defense and State, and the 
Arms Control and Disarmament and Central Intelligence Agencies. The 
Secretary of Energy approved the conclusions of the report.
    In addition, John D. Holum, Director of the Arms Control and 
Disarmament Agency, in his letter of July 17, 1995 to Senator Hatfield, 
stated: ``The right to take the steps necessary to maintain our nuclear 
deterrent will be hollow--and, indeed our arms control priorities could 
be placed in jeopardy--if we do not have a stockpile stewardship 
program * * *.'' His letter went on to strongly support the NIF, which 
is an essential element of Stockpile Stewardship.
    Question. Can the NIF replace nuclear weapons testing or provide 
the proof-test necessary in the development of new nuclear weapons?
    Answer. No. The National Ignition Facility is intended for defense-
related high temperature and high energy density research. It will have 
the capability to address a broad range of weapons physics problems. 
The certification of nuclear weapons requires a complex set of 
scientific and engineering information and will require the utilization 
of many analyses and experimental facilities. While NIF data will have 
a direct value to certification efforts, the NIF, directly and by 
itself, cannot certify new or modified nuclear weapons designs.
    Question. Why has the total construction cost increased from $842.6 
million to $1.046 billion, and the total project cost gone from $1.074 
billion to $1.199 billion?
    Answer. The NIF baseline cost and schedule increases are a result 
of: (1) the changes to the project scope and schedule (described below) 
incorporated in the preliminary design, Title I; and (2) incorporation 
of site specific costs for construction of the NIF at the Lawrence 
Livermore National Laboratory (LLNL).
    The scope changes are:
  --Facility user design requirements from the weapons program, weapons 
        effects testing, and inertial fusion program needed to meet 
        their programmatic missions.
  --Site-specific infrastructure requirements for the LLNL construction 
        site (footnoted in the fiscal year 1996 and fiscal year 1997 
        Project Data Sheets).
  --Title 1 design changes to meet operational and maintenance goals.
    The increase to the total construction cost (TEC) associated with 
these scope changes is $123.4 million. There are further design 
evolution and costing changes that add $29.7 million more to the 
construction costs. The remainder of the construction increase, $50 
million, is attributable to the extension of the baseline completion 
date by 12 months to October 2003. The total construction increase is 
thus $203.1 million. This increase is partly offset by a reduction in 
Other Project Costs (OPC) of $77.8 million, made possible by costing 
changes and siting of the project at LLNL. Thus the increase in Total 
Project Costs is $125.3 million, with previously footnoted site 
infrastructure costs now fully included. The extended schedule is 
considered prudent in order to allow additional time to accomplish the 
added scope and is consistent with the total Defense Programs' annual 
funding profile. The slower pace of the project is compatible with the 
constrained pace of the inertial fusion and weapons physics base 
programs.
    An independent cost estimate was conducted by the Office of Field 
Management resulting in a cost within less than 1 percent of the new 
project baseline. The completion of Title I design, with added scope, 
is the only time that a cost change should be expected, provided that 
funding is appropriated and made available on the current schedule as 
reflected in the fiscal year 1998 Congressional Request in the 
construction project data sheet for NIF.
    Question. Can you foresee any reason which would necessitate a 
further change in the scope of the NIF?
    Answer. No. The design is frozen. Physics discoveries requiring 
scope changes are always possible in leading edge research, but only 
one such change has occurred since 1990, and no others are anticipated 
before NIF operations.
    Question. DOE has been severely criticized regarding large cost 
overruns, and its ability to manage and control costs. What steps has 
or will DOE take to insure the actual cost of the NIF program does not 
rise significantly higher than the revised $1.199 billion level?
    Answer. Changes to the NIF baseline to date have been driven by 
scope changes to improve project utility and site-specific 
requirements. These changes were managed through the Department's 
disciplined baseline change control process as described in the NIF 
Project Execution Plan. We have established effective management 
control systems to track actual expenditures against established 
baselines.
    Being aware of overruns in past DOE projects, extra care was given 
to validating design concepts of the NIF (through the Beamlet laser 
prototype experiments), to details in the design work, and to costing 
basis. Costs were derived in a ``bottom up'' estimate at the lowest 
Work Breakdown Structure level necessary for accuracy. The Automated 
Estimating System developed by Martin Marietta Systems, Inc. was used 
to calculate costs for the project taking into consideration schedule, 
contingency and escalation data. A probabilistic contingency analysis 
was conducted by the Bechtel Corporation using the Microrac Monte Carlo 
code. Cost escalation was based on DOE published rates for general 
construction and defense programs. The Independent Cost Estimate team 
from Foster Wheeler USA found that ``the overall variance between the 
Independent Cost Estimate and the Project Office Total Estimated Cost 
and Other Project Cost is negligible,'' and was actually within less 
than 1 percent of the new project baseline.
    The request for full funding of the project, as well as the 
comprehensive planning that has been part of preparing that request, 
are intended to assure that costs are accurate and will be maintained 
as predicted.
    Question. What is the status of the readiness report for the NIF 
project?
    Answer. The Department had contracted with the National Academy of 
Sciences (NAS) to carry out a study on the Inertial Confinement Fusion 
program. One of the elements of their charge was to review the 
scientific and technological readiness of the NIF. The Natural 
Resources Defense Council and two other organizations sought a 
temporary injunction to prevent the issuance of the NAS report. On 
March 5, 1997, the U.S. District Court for the District of Columbia 
granted a preliminary injunction that allowed the NAS to issue the 
report but enjoined DOE from relying on or utilizing information in the 
NAS report. The report was issued and posted on the Internet on March 
20.
    Independent of this action, the NIF project conducted its own 
independent technical review of the engineering readiness of NIF. The 
status of the NIF design was exhaustively evaluated, over a 60-day 
period, by a team of expert reviewers to determine the NIF's technical 
readiness to proceed into the detailed engineering phase of 
construction. The team formally recommended proceeding with the Title 
II (detailed engineering design) phase of the NIF and proceeding with 
site preparation/excavation and major long-lead procurement items.
    Question. I understand that the completion date has slipped 1 year 
from the third quarter of 2002 to the third quarter of 2003. What would 
be required to put the project back on schedule based on incremental 
funding? Provide the annual, incremental funding profile which 
maintains the 2002 completion schedule?
    Answer. In December 1996, a Level 1 Change Control Board approved 
the schedule and funding profile in the fiscal year 1998 Congressional 
Budget Request. The requested project schedule and funding profile 
conform with the obligational and outlay levels assumed in the fiscal 
year 1998 budget request, reduce technical risk, particularly in the 
optics area, and are consistent with the projected progress in the 
inertial fusion program. While project completion was delayed by 1 
year, the initial operating capability will actually be achieved 1 year 
earlier than previously planned.
    If the Department is notified before July 1, 1997, a maximum 
acceleration case would require $514 million to be available for 
obligation in fiscal year 1998 for the project to be able to accelerate 
project completion by 7 months and reduce the Total Project Cost (TPC) 
by approximately $35 million. An intermediate acceleration case that 
provides $354 million in fiscal year 1998 would allow acceleration of 3 
to 4 months in schedule and a $20 million reduction to the TPC. 
However, we believe the anticipated savings and acceleration of a few 
months in the schedule do not justify the increased risk in meeting the 
cost and schedule targets. In addition, the accelerated cases would 
significantly increase outlays in fiscal year 1998.
    For the record, I would like to insert a table that reflects the 
approximate schedule and funding profile for the accelerated cases. The 
information follows:
[GRAPHIC] [TIFF OMITTED] T10MA20.000

    Question. Explain how the completion schedule can slip by 1 year, 
yet operation of the project can be accelerated by 2 years as indicated 
in the budget justification?
    Answer. Improvements in the functionality and serviceability of the 
NIF have been accomplished through the Title I design. The added scope 
results in the need to extend the project schedule, but those scope 
changes also make the facility more modular. As a consequence of 
modularity and building design, it is possible to first construct and 
use one 8-beam bundle of lasers (one twenty-fourth of NIF), followed by 
one fourth, one half and finally the full complement of lasers. The 
modularity of the laser architecture, together with deliberate 
scheduling of the installation of laser equipment in the large two 
sided laser bay, allow early use of portions of the laser.
    Question. The U.S. District for the District of Columbia just has 
issued a preliminary injunction on a motion by the Natural Resource 
Defense Council (NRDC) to enjoin the National Academy of Science from 
issuing their report on the Inertial Confinement Fusion program. What 
is the nature of the action, and what do you see as the long range 
implications of the legal action if successful?
    Answer. In the case of National Resource Defense Council v. DOE and 
NAS, (CV-97-308), the plaintiffs asserted that the Department's use of 
the Committee for the Review of the DOE Inertial Confinement Fusion 
(NAS Committee), for evaluation of the National Ignition Facility 
(NIF), is an advisory committee and the Department did not comply with 
requirements of the Federal Advisory Committee Act (FACA). The NAS 
Committee's first report, which was to provide a review of the 
scientific and technical readiness of the NIF project, was scheduled to 
be released on March 6, 1997.
    In a hearing held on March 5, 1997, Judge Friedman concluded that 
plaintiffs were likely to prevail on their claim that the NAS Committee 
is covered by FACA, and issued an injunction prohibiting the Department 
from relying on, or otherwise utilizing, the report and prohibited the 
Department from any further funding of the NAS Committee. The judge 
also ruled that NAS could release the report on March 10, 1997. On 
April 3, 1997, DOE filed a brief in support of its motion for partial 
reconsideration of the injunction (filed with the court on March 19, 
1997) with respect to the bar on DOE's use of, or reliance on, the 
report.
    The Department of Energy has used the National Academy of Sciences 
as a source of independent review for many years. The major issues for 
the long-term are whether or not the NAS must function under FACA, and 
when and how Federal agencies may rely on analysis by the NAS. While 
the Department does not require a NAS report to continue the NIF 
project, timely resolution of this issue is of great interest to the 
Department, since the Department would like to continue the use of NAS 
committee reports, to assist in future decisionmaking and project 
management.
                       core stockpile stewardship
    Question. How do these core research and advanced technology 
activities contribute to the Stockpile Stewardship and Maintenance 
Mission?
    Answer. The core research, development, and testing programs 
provide the intellectual knowledge base and scientific foundation of 
the Stockpile Stewardship and Management (SSM) program. This knowledge 
base provides the ability to anticipate stockpile issues, as well as to 
rapidly and comprehensively address emerging problems and issues 
related to the continued safety, security, and reliability of the 
enduring stockpile. Directed research and development in physics and 
chemistry, materials and components, computing and simulation, and 
systems and manufacturing techniques support the objectives of the SSM 
mission, enhance SSM capabilities and fill gaps within the overall 
knowledge base. ``Cutting edge'' experimental facilities are provided 
to push the envelope of modeling and prediction capabilities. These 
facilities and the activities they support also attract and retain 
skilled and knowledgeable staff who will enable the continuation of an 
effective Stockpile Stewardship and Management program.
    The following are a few examples of such activities in fiscal year 
1998:
  --Fundamental physics studies of the properties of crystalline and 
        amorphous materials will be linked to aging models for nuclear 
        materials, high explosives, and electrical and mechanical 
        components to predict aging and lifetimes of stockpiled nuclear 
        weapons.
  --A new radiographic facility, the Dual Axis Radiographic 
        Hydrodynamic Test Facility (DARHT), will be used to obtain 
        multidimensional views of primary nuclear weapon component 
        behavior that will help allow predictive capability of 
        stockpile weapons with aging and other environmental changes.
  --Core computer modeling and simulation are used to assess stockpile 
        characteristics as part of the Annual Nuclear Weapon Stockpile 
        Certification to the President by the Secretaries of Defense 
        and Energy.
    Question. What impact does the reduction in 1998 have on DOE's 
human resource and other capabilities?
    Answer. The apparent reduction in our fiscal year 1998 budget 
request for Core Research and Advanced Technology reflects the one-time 
increase in fiscal year 1997 due to the Congressional add-on in the 
final appropriation. With the Congressional add-on, the fiscal year 
1998 request for the Core Research and Advanced Technology program is a 
4 percent decrease from the fiscal year 1997 appropriation. Not 
considering this one-time increase, our fiscal year 1998 request is a 3 
percent increase over fiscal year 1997 and a 9 percent increase over 
fiscal year 1996.
    Question. What vulnerabilities do you see in the Core Research and 
Advanced Technology program in the near and longer term if this 
downward funding trend continues?
    Answer. If there is a downward trend in the Core Research and 
Advanced Technology program in the near and longer term, we see the 
following vulnerabilities:
    Historically, we have operated under a ``level of effort'' concept 
whereby resources have shifted between core activities and specific 
applications (formerly weapon development programs) to meet evolving 
priority requirements. To some extent this philosophy continues today 
with initiatives such as Accelerated Strategic Computing Initiative 
replacing weapon development programs in terms of applied requirements 
for core resources.
    If our fiscal year 1998 and follow-on budgets for Core Research and 
Advanced Technology are reduced significantly, this ``level of effort'' 
concept will fail, and human resources and the competencies they 
represent could be in jeopardy. Shortages of skilled and knowledgeable 
individuals would have significant impacts on the capabilities of the 
laboratories to conduct the Science-Based Stockpile Stewardship 
program. With budget reductions, it would be difficult for the 
laboratories to keep adequate technical staff, their most valuable 
asset, and their ability to attract new top quality scientific 
personnel would also suffer. In the long-term, the shortage of world-
class scientists could seriously degrade the ability of the nuclear 
weapons complex to carry out the legislated mandate to preserve 
capabilities that will maintain the necessary level of weapon safety 
and reliability.
    Future budget restraints may limit the Department's ability to 
build and maintain new advanced research and testing facilities while 
maintaining the required technical competencies will be based on 
program priorities and technical requirements, with consideration of 
the needs to maintain infrastructure at our facilities and meet other 
corporate Defense Programs priorities within our outyear budget 
targets.
    Funding for Core Research, including direct weapon support and 
Inertial Confinement Fusion, has remained at a relatively constant 
level over the past 15 years, although direct weapons support has 
decreased and the core has increased. But the Core Research 
historically contained as part of the testing program has been reduced 
to zero and when taken into account, represents a decrease of total 
research funding.
    Question. I am particularly concerned that the budget request may 
not adequately support critical activities such as microelectronics, 
weapons physics and advanced hydrodynamic radiography at Sandia Lab. I 
understand these areas have been declining over the past couple of 
years and continue the downward trend in 1998. Is this a problem as it 
relates to the capability of the national labs to address and solve 
critical issues of an aging stockpile?
    Answer. Core Research and Advanced Technology funding for 
microelectronics has actually increased, but since Sandia's 
microelectronics activities are funded by multiple sources, including 
Technology Transfer and related industry support that have declined, 
their resultant overall budget in this area has decreased. We are 
trying to maintain the minimal level of funding in the microelectronics 
area as Sandia performs research essential to solving critical issues 
of the aging stockpile and is a potential supplier of radiation hard 
electronics if the current industrial suppliers exit the market.
    The fiscal year 1998 funding estimates for physics and Advanced 
Hydrodynamic Radiography at Sandia are somewhat less than the fiscal 
year 1997 level, but the funding requested is adequate for fiscal year 
1998 and in keeping with overall program needs and priorities. We are 
balancing available funds for these areas among all of the weapons 
laboratories, each of which is an important contributor to this 
research.
           accelerated strategic computing initiative (asci)
    Question. This program has grown from nothing in 1995 to a request 
of over $200 million in 1998. Could you review, briefly, the goals, 
expected costs, program duration, schedules and anticipated funding 
requirements when the program was initiated compared to the program 
plan envisioned in the 1998 budget?
    Answer. Planning for the Accelerated Strategic Computing Initiative 
(ASCI) started in 1994 and was motivated by the clear indication that 
the United States would need new means beyond underground testing to 
continue to assess and certify the safety and performance of a nuclear 
weapons stockpile that would age well beyond its design life. Prior to 
the formal creation of the ASCI, the need for additional strategic 
computing investments were recognized and $45 million was identified 
for the precursor concept of a Strategic Computing Initiative. At this 
time it was not clear how a Comprehensive Test Ban would be structured 
nor was the acceleration drivers of designer retirements and weapons 
aging fully considered in the scope of the initiative.
    On August 11, 1995, President Clinton announced the United States' 
intention to pursue a ``zero yield'' Comprehensive Test Ban Treaty. 
This decision affected a fundamental planning assumption for ASCI. The 
decision to accept a complete cessation on underground nuclear testing 
dramatically changed the scope of the program. It significantly 
increased its technical difficulty, and made achieving key milestones 
by 2004 (while the bulk of the nuclear weapons designers with 
significant underground test experience were still working) imperative. 
Early in 1996, the program was rescoped to accommodate much more 
difficult simulation problems, an expanded set of simulation problems 
(particularly remanufacturing), a need to consider predictive aging in 
addition to safety and reliability, and the need to complete code 
validation sooner rather than later. Target funding was increased to 
$145 million per year based on a limited low-yield test ban. This was 
recognized as an estimate because the full implications of the zero-
yield Presidential decision has not been completely assessed and 
detailed discussions with the Department of Defense regarding their 
requirements for confidence in the stockpile had not been held. This 
rescoping did not affect the ASCI simulation development schedule per 
se, but it changed the amount of physics modeling required, number of 
code development efforts required, and computing power and supporting 
environment required. It also produced the need to develop methods for 
coupling code development and validation on a tightly coordinated and 
commensurate schedule and introduced the need for initial validation of 
the codes by 2004. The fiscal year 1998 budget request of $204.8 
million is needed to support these additional requirements in the ASCI 
program.
    The ``zero yield'' decision not only expanded the set of simulation 
problems that needed to be addressed but also significantly enlarged 
both the simulation and the computational goals to accommodate for a 
far more full system, three dimensional physics and modeling 
requirements. These are driven in large part by aging issues and other 
requirements of stockpile life extension and enhanced surveillance 
activities. Our assessment shows that the computing power needed, by 
2004, to support 3D, additional resolution, more complete physics 
simulation, aging issue predictive modeling and assessment, and 
remanufacture issues is well over 100 trillion operations per second 
(Teraops), which is hundreds to thousands of times more powerful than 
our previous most advanced scientific computers.
    This level of simulation capability will be required in the 2004 
timeframe to allow ``test-based'' designers and weapons analysts to 
validate that the simulations accurately reflect the ``real world.'' 
The 2004 timeframe is critical because that is when we will have lost 
half of the current and most experienced ``test-based'' designer and 
analysts capability. These designers and analysts are considered 
``master craftsmen and women'' who have earned that status by learning 
and understanding scientific issues associated with nuclear weapons and 
then checking themselves with an extensive program of underground 
tests. With the loss of underground testing, these weapons designers 
are now required to continue to do their jobs of certification and 
assessment of the stockpile with a new tool set, in which a major 
component will be large scale, complex simulations. It is critical that 
this group of designers and analysts validate that the new simulation 
tools allow them to continue to have confidence in the weapons even in 
the absence of underground testing. The ASCI is designed to provide 
this level of simulation capabilities in the time frame required.
    Question. What are the annual funding levels assumed for ASCI over 
the next five years?
    Answer. Funding for the ASCI program must be accommodated within 
the total funding available within the Weapons Activities Operation and 
Maintenance Five Year Budget Plan. The current outyear funding profile, 
as included in the fiscal year 1998 Congressional Budget Request, 
reflects the following funding for Weapons Activities:

              Weapons Activities Operations and Maintenance

                        [In millions of dollars]

Fiscal year:
    1998.......................................................... 3,576
    1999.......................................................... 3,497
    2000.......................................................... 3,400
    2001.......................................................... 3,362
    2002.......................................................... 3,321

    Defense Programs has not allocated explicitly outyear funding 
targets below the decision unit level at this time. Within the current 
five-year budget targets, ASCI is expected to remain level, at a 
minimum, with the possibility that some increases based upon overall 
Defense Programs priorities and program progress are possible within 
the outyear funding profile.
    Question. The budget request represents a 35 percent increase of 
the level provided for 1997. Why is such a large increase needed in one 
year?
    Answer. The budget request for ASCI is $204.8 million for fiscal 
year 1998. This represents an increase from $151.6 million in fiscal 
year 1997. While the increase of $53.2 million is significant, it is 
justified by the need to quickly develop advanced validated simulation 
capabilities required to support the ongoing assessment and 
certification. The increase is needed to support the additional work in 
the applications development, including the effort and manpower 
required to deploy an initial capability for a 3D safety simulation 
code by 1999. The increase will also support the deployment of the 3 
trillion operations per second (Teraops) systems at Los Alamos and 
Lawrence Livermore National Laboratories and provide additional support 
for the Problems Solving Environments and Alliances Strategy.
    Question. Have you been able to use the technologies and equipment 
developed to date to help solve current ``real world'' problems in the 
stockpile?
    Answer. Yes, simulation capabilities have always played an 
important role in the assessment and certification of the nuclear 
stockpile. The Comprehensive Test Ban Treaty requires an increased 
reliance on those capabilities. Simulation has recently played an 
important role in resolving several stockpile issues without nuclear 
testing, including a question about the W76. It also provided critical 
information for the certification of the B-61 Mod 11. The advanced and 
accelerated simulation capabilities provided by ASCI will also play a 
critical role in ongoing stockpile programs such as the W87 life 
extension project, W76 recertification, and W88 pit rebuild. Finally, 
ASCI provides advanced simulation and computing capability on a 
continuing basis for assessment and certification. In the area of 
simulation, ASCI expects to bring on line a 3D safety code in the 1998 
timeframe and add selected performance capability by 1999. The ASCI 
computer acquisition strategy has been coordinated with production 
computing to allow significant added capability for assessment and 
certification using traditional, current 2D weapon codes. This strategy 
has significantly enhanced DP's capability to respond to stockpile 
issues in an era of no underground testing and with the increasing 
computer workload of the annual certification mandated by the 
President.
    Question. Could you provide for the record how the $32.3 million 
increase for Advanced Applications will be used? Is the increase for 
hardware, software, manpower, etc.?
    Answer. The increase in Advanced Applications will be used to 
support code development and validation at the national laboratories. 
Specifically these funds will be used for manpower needed to develop 
the physics models, computational methods, code development and 
validation of simulations.
    Question. What would be the programmatic impact of receiving only a 
15-20 percent increase in this activity?
    Answer. The simulation capabilities to be provided under the 
current plan and funding request by ASCI in the near-term will 
significantly improve our ability to certify and assess weapons without 
testing. But it must be clearly understood that while near-term 
improvements enhance our capabilities and support stockpile life 
extension and enhanced surveillance objectives, we cannot accomplish 
the digital surrogate to underground testing until we have at least 100 
TeraOps computational capabilities and the physics data and three 
dimensional models and simulations to address major complete components 
and small complete systems in a single comprehensive and integrated 
assessment. We need to sustain a level of investment over the long term 
to achieve the needed extensive weapon simulation capability supported 
by computer systems operating at least at 100 TeraOps before full 
system performance and safety simulations are possible. The ability to 
harvest the experience, knowledge and expertise of test savvy designers 
by 2004 (before significant retirements occur) is critical. The impact 
of receiving less than the request could be not just to delay the 
crucial input of test savvy designers, it could mean that we do not 
reach the threshold capability to do the primary job of virtual 
testing.
    Since 1996, ASCI's first year of funding, the labs have been able 
to establish a minimal 3D, ``full physics'' simulation code development 
effort with a clear plan to ``fill out'' these code teams in the 1998 
and 1999 timeframe. Limiting the growth of the Advanced Applications 
work to 15-20 percent ($11.2 million to $15.0 million) would 
significantly limit our ability to develop the simulation capabilities 
needed by 2004. Specifically, it would slow the pace of moving 
important simulation codes from 2D to 3D and limit the implementation 
of new physics in these codes. Most importantly it will limit the 
ability of the national laboratories to involve the ``test-based'' 
weapons analysts in validating the usability of these new simulation 
capabilities. Furthermore, limiting the growth could introduce or 
exacerbate programmatic vulnerabilities. These could include: added 
risk because validation efforts and some aging code development efforts 
are further delayed to sustain safety, reliability, and remanufacture 
code development efforts or added risk due to delays in developing 
strong computer partnerships.
    There are several near-term stockpile issues in which advanced 
simulation capabilities will play a vital role. The ability to certify 
and assess projects like the W87 life extension, the W88 pit rebuild 
and the W76 revalidation will be negatively impacted by a decrease in 
the funds available to Advanced Applications. Ultimately, funding 
limitations or reductions could significantly undercut the ability to 
do adequate assessments of weapons issues or certifications.
    Question. Why is it critical to receive a 55 percent increase in 
the Problem Solving Environment program?
    Answer. The advanced simulation capabilities provided by ASCI are 
the result of a balanced program. In order for the simulations to be 
usable by designers and other users of advanced simulation to address 
weapon issues, and to be validated by ``test-based'' weapons analysts, 
the simulation capabilities must exist in a robust environment that 
provides advanced code development tools, high performance storage 
systems, state of the art visualization tools, and high speed data 
networks. The increase in the Problem Solving Environment provides 
these features in that environment. The increase is commensurate with 
the increase in the Applications Development and the delivery of the 
High Performance Computing Platforms. Even though the 55 percent 
increase seems large, the actual dollar amounts are relatively small 
($13.1 million spread across the three laboratories). This program has 
adopted a strategy of using, leveraging, and adapting technologies 
available in the marketplace and the research community which allows 
significant work in a very cost effective way.
    Question. What would be the programmatic impact of receiving only a 
15-20 percent increase in this activity?
    Answer. The impact of receiving a 15-20 percent ($3.6 million to 
$4.8 million) increase in Problem Solving Environment would be to 
adversely effect the balance of the program. A decrease in the growth 
of this area would slow the delivery of application development tools 
which are used by the Advanced Applications Program to efficiently 
program the advanced simulations. A decrease from the request would 
also limit the ability to deploy high performance storage systems and 
networks. The lack of data storage would mean the weapons analyst would 
effectively ``compute and delete'' reducing the performance per 
simulation and the overall stockpile assurance effort. Not deploying 
high performance data networks will result in higher costs in later 
years because ASCI could only remain in the mode of simultaneously 
keeping large computer systems close to the code developers and users 
at each laboratory, rather than advancing to geographically distributed 
systems where one or two high end peak capability computers could 
support the weapon laboratories.
    Question. What level of funding is being requested for university 
and college based activities and how does it compare to the levels in 
1996 and 1997?
    Answer. An important strategy of the Stockpile Stewardship and 
Management Program is the teaming through ASCI of weapons laboratories, 
industry (particularly computer companies), and universities. Together 
these partners provide the current large lead (up to 100X) 
differentiation in simulation capabilities between the U.S. and the 
rest of the world. The support for the Strategic Alliances program 
allows the universities to work with the national laboratories to move 
the U.S. to an even greater lead and hopefully sustain this advantage 
(important economically as well as national security) for the 
foreseeable future.
    The funding for the Alliances program is as follows:

                        [In millions of dollars]                        
------------------------------------------------------------------------
                   Fiscal year                      Level 1     Level 2 
------------------------------------------------------------------------
1996............................................           2           3
1997............................................           5           3
1998............................................        11.5           3
------------------------------------------------------------------------

    Level 1 Alliances are focused on creating relatively large 
university projects to focus on developing the methodology and tools to 
create large-scale, complex, cross-discipline simulations relevant to 
nuclear weapons issues. These centers will not work in a classified 
environment and will not work directly on nuclear weapons issues. 
However, their work is expected to be physically verifiable and in 
areas relevant to weapon code development (e.g., high energy 
propellants or computational fluid dynamics), adding confidence to our 
use of comparable codes and algorithms that cannot be verified through 
underground test.
    Level 2 Alliances projects are much smaller and are focused on near 
term deliverables for ASCI. These projects are solicited, reviewed and 
selected by a team consisting of the three laboratories plus 
Headquarters. The projects are expected to support a professor and a 
few graduate students to work on a very focused problem (i.e. radiation 
transport methods or parallel mathematical algorithms) at the cost of 
$100 to $300 thousand per year.
    Question. How do these Centers contribute to the success of the 
ASCI program?
    Answer. The ASCI program is taking simulation to new levels; the 
goal is digital proxy of the physical test. The Comprehensive Test Ban 
Treaty requires the DOE and national laboratories to rely on simulation 
to make predictions about the ``real world'' to a degree that was 
recently not thought possible. While the national laboratories are the 
prime source of scientific innovation to move simulation to this new 
level for weapons, there is general agreement that U.S. universities 
have a great deal to contribute. These contributions will take the form 
of new methodologies for creating cross disciplinary simulations, 
specific physics improvement, advanced computer science work, and 
advanced mathematical algorithms for parallel computers. Both the level 
1 and level 2 elements of the ASCI program will tap into this source of 
scientific expertise to advance weapon-related simulation capabilities 
as well as to advance U.S. expertise in this critical national security 
and economic security technology area.
    Question. How many new ASCI Strategic Alliances Centers are being 
considered?
    Answer. There are currently no ASCI Strategic Alliances Centers. We 
are currently in the process of a competitive solicitation to select 
these Centers and expect to use fiscal year 1997 funds ($5 million) to 
start several centers, depending on funding constraints and balance 
with the other parts of the program. We are currently planning to have 
4 to 5 Centers, each ramping up to $4 to $5 million per year for a 5-
year period. Once those Centers have been selected, we will make a 
long-term commitment to the universities involved and do not plan to 
start any new centers for at least 5 years.
    Question. Are these Centers funded under multi-year funding 
agreements, and if so, how much funding would be needed over the next 
5-years to support new alliances?
    Answer. The Level 1 Alliances Centers will be funded by multi-year 
funding agreements with the proviso that future funds will only be 
provided if available. We are currently planning to have a few, 4 or 5 
Centers, each ramping up to $4 to $5 million per year for a five-year 
period. The funding profile for the next five years is expected to be 
as follows and assumes that there is appropriate investment in the 
total ASCI program, particularly Advanced Applications and Platforms to 
support connecting the Alliances Centers' work to the weapons 
simulation and stockpile:

                                 Level 1

                        [In millions of dollars]

1997..............................................................   5.0
1998..............................................................  11.5
1999..............................................................  14.0
2000..............................................................  20.0
2001..............................................................  20.0
                        -----------------------------------------------------------------
                        ________________________________________________
      Total.......................................................  70.5

    Question. The One Program/Three Labs program is growing from a 
level of $1.0 million in 1996 to $8.5 million in 1998. Much of this 
appears to be activities of an outreach nature. What is the 
justification for this program expanding so rapidly?
    Answer. The One Program/Three Labs program supports and enhances 
that technical interaction and provides information technology 
capabilities to tightly link planning and coordination of technical 
results among the laboratories and Headquarters. This is primarily an 
inreach effort rather than an outreach effort.
    One Program/Three Labs is focused on supporting and facilitating 
the coordination and acceleration of technical work at the three labs. 
Funding is used to support technical meetings to present Principal 
Investigator results (PI meetings), technical workshops, an annual 
implementation planning process, the development of a simulation 
development roadmap and to hire outside technical experts to review and 
advise the ASCI program (not necessarily a single laboratory). 
Increases in this program are a reflection of the planned growth and 
accelerated pace of the program. ASCI is producing significant results 
in a very short time.
    Question. What value do these programs add to the overall program 
success?
    Answer. The One Program/Three Labs program is critical to the 
success of ASCI. In the past, if Defense Programs was faced with a 
difficult problem (like assessing and certifying the stockpile without 
underground testing), it would run a competition between the labs and 
select the best proposal. That laboratory would then have the chief 
responsibility to provide the technology innovations to produce a 
result (usually a weapon) which would be deployed. Never in the past 
has one project had the potential to significantly affect the way all 
three labs conducted their business. ASCI will do exactly that. 
Therefore it was understood very early that if the simulation 
capabilities that were to be provided by ASCI would be deployed at each 
laboratory, each laboratory would have to play a integral role in the 
development of the capabilities. It was also recognized that the 
simulation capabilities required for future stockpile stewardship were 
well beyond the ability of any one lab to produce.
    ASCI therefore adopted the One Program/Three Lab approach which 
essentially identified areas where laboratory competition was 
appropriate (peer review requirements) and where it was not. ASCI then 
created a program plan and annual implementation plans to communicate 
program goals and projects across the three laboratories. This program 
has played a vital role in the delivery of accomplishments to date and 
will greatly assist in meeting the simulation goals required by the 
2004 timeframe.
    The Alliances Program provides access to key sources of independent 
validation and verification, including use of physical tests, of the 
efficacy of ASCI codes and simulations.
                         advanced manufacturing
    Question. How do you explain the significant reduction in Advanced 
Manufacturing from last year?
    Answer. The fiscal year 1998 request for Advanced Manufacturing 
within the Stockpile Stewardship program is actually a $2.2 million 
increase over the originally planned fiscal year 1997 funding level. 
The Advanced Manufacturing budget was increased on a one-time basis by 
an additional $10 million by Congress in the final fiscal year 1997 
appropriation.
    Question. Does a reduction of this magnitude cause an adverse 
impact to the program?
    Answer. The fiscal year 1998 funding level does not adversely 
impact the program. The program is budgeted and planned within 
available resources identified in the fiscal year 1997 and fiscal year 
1998 funding requests. The additional dollars received in fiscal year 
1997 made possible the completion of research that would otherwise have 
been deferred to a later date. The fiscal year 1998 funding request is 
in line with program priorities and mission needs.
    Question. Are there critical activities which will not be funded?
    Answer. The accomplishment of critical activities can take place 
within appropriated and planned funding levels. The program is set up 
to ensure that critical activities are accomplished first.
                      inertial confinement fusion
    Question. Does the budget request for fiscal year 1998 support the 
development and fabrication of the targets required by the five ICF 
labs? If not, why and how much additional funding is required in 1998 
to develop, fabricate and produce those targets?
    Answer. Yes. The fiscal year 1998 ICF budget request supports a 
fully integrated and prioritized program of ICF activities. Target 
technology development, fabrication, and deliveries are an integral 
part of that program and are to: (1) provide the targets needed for 
current year operations; and (2) perform the target technology research 
and development necessary to meet the outyear needs of the ICF program. 
In-house target fabrication and development is conducted, at varying 
levels, by all five laboratories (i.e., LLNL, LANL, SAL, UR/LLE, and 
NRL) and by a target support contractor (General Atomics, Inc.). This 
overall target effort is tightly integrated to reduce redundancies and 
maximize the utilization of the unique capabilities of the 
participants.
    Question. How important is the work at the University of Rochester 
Laboratory of Laser Energetics to the success of the Stockpile 
Stewardship program in general, and the success of the NIF in 
particular?
    Answer. The University of Rochester Laboratory for Laser Energetics 
(UR/LLE) plays an essential integral role in the Stockpile Stewardship 
program by providing continuity to the national ICF program and 
broadening its science base; by providing contributions to the NIF 
program; and by strengthening the links between the national 
laboratories and the educational and research strengths of the 
University of Rochester. Basic physics experiments can be carried out 
on the Omega facility that are of broad relevance to both ICF and 
nuclear weapons physics and effects. In support of the Stockpile 
Stewardship program, the UR/LLE is uniquely capable of imploding fuel 
capsules by the direct-drive method and can contribute as well to the 
indirect-drive method at significant energy levels. The Omega facility 
will be a suitable alternate to Nova for conducting high-energy-density 
experiments relevant to stockpile stewardship when Nova stops 
operations. From then until the NIF is completed, the Omega will be the 
only facility with the capability to implode cryogenic targets, a 
necessary condition for achieving fusion ignition. The viability of the 
direct-drive option for the NIF will be demonstrated on Omega, and it 
will provide invaluable experimental results in the development of the 
complex cryogenic target handling system for the NIF.
    Question. Can the Omega laser system be fully utilized with the 
funding requested for fiscal year 1998?
    Answer. The fiscal year 1998 funding requested for the Omega laser 
was increased to $23.6 million ($1.7 million over the fiscal year 1997 
Appropriation), in order that the utilization of the Omega facility 
could be increased. This was the largest percentage increase requested 
for any of the ICF program participants. The essential role that Omega 
plays in the ICF program (i.e., supporting stockpile stewardship, the 
NIF and ultimately ignition) justifies the request for additional 
funds. However, the number of shots that can be provided at Omega is 
limited by funding.
    Question. If additional funding were available, what are the 
priority program areas which should receive additional resources?
    Answer. The funding request of $217 million is adequate; however, 
if additional funds were available to the ICF program, they would be 
used to increase the annual shot rate from 750 to 1000 shots on Omega; 
design and fabricate a tritium waste management system for Omega; and 
further reduce risk on specific laser and optics technology development 
which is currently underway for the NIF project.
                       defense asset acquisition
    Question. What, in your judgement, are the benefits and liabilities 
to be derived from moving to a fully funded concept for asset 
acquisition?
    Answer. Moving to full funding for asset acquisition will have a 
number of benefits for the Department in general, and Defense Programs 
in particular. It will insure that Defense Programs is fully committed 
to each and every project that is in our budget. Full funding will also 
mean that we will no longer be able to argue that the annual 
appropriations process caused schedule delays or cost increases. Now we 
will be fully responsible for schedule delays and cost growth, and that 
should provide added incentive to get our planning right in the first 
place. And once we learn to take advantage of full funding, we should 
begin to see project schedules optimized to full funding, with expected 
cost savings. The disadvantage is that flexibility in the use of 
resources may be diminished depending on the funds control procedures 
implementing this policy.
    Question. What is the proposed level of investment in acquisition 
of new facilities for Weapons Activities through 2002 based on 
incremental funding and the full funding concept?
    Answer. The proposed level of facility investment for Defense 
Programs, DP's share of the Defense Asset Acquisition Account for the 
time period as provided in the fiscal year 1998 Five-Year Budget Plan 
for DOE Atomic Energy Defense Activities, is provided for the record.

         DEFENSE PROGRAMS PROPOSED LEVEL OF FACILITY INVESTMENT         
                        [In thousands of dollars]                       
------------------------------------------------------------------------
                                            Incremental    Full funding 
               Fiscal year                  funding \1\         \2\     
------------------------------------------------------------------------
1998....................................         468,195       1,502,395
1999....................................         699,572         668,000
2000....................................         703,164         244,000
2001....................................         604,858         350,000
2002....................................         257,759         187,000
Outyear Obligations of 5 Year BA........         217,847  ..............
------------------------------------------------------------------------
\1\ Obligation authority.                                               
\2\ New budget authority.                                               

    Question. Does the new full funding initiative provide a sufficient 
level of capital investment to support the Stockpile Stewardship and 
Management program in the outyears?
    Answer. The outyear estimates for capital investments are 
sufficient to cover defined requirements and provide some amount for 
anticipated, but as yet unapproved, construction. Some Science-Based 
Stockpile Stewardship projects which may be necessary to enable 
stockpile evaluation and certification without underground testing, 
such as the Advanced Hydrodynamic Facility and the X-1 Pulsed-Power 
Facility, are not yet identified within the five year targets in our 
fiscal year 1998 budget. Our annual budget process will reevaluate the 
balance between funding provided for capital investments and that 
provided for operations and maintenance. Overall, Defense Programs is 
committed to providing for essentially all of the needs of the 
Stockpile Stewardship and Management program, except the acquisition of 
the new tritium source, within the ``$40 billion over 10 years'' 
envelope.
    Question. Does the full funding concept guarantee that there will 
be no cost overruns for the projects?
    Answer. Full funding will not prevent all cost overruns. The cost 
increases to the DARHT project resulting from the court injunction 
would not have been prevented by full funding. Nor will full funding 
stop us from adding scope to a project, and thus increasing its 
estimated cost, when doing so is programmatically and financially 
beneficial, such as occurred this year with the scope increases to the 
National Ignition Facility required to maximize the efficiency and 
usability of the facility and to insure the configuration of the 
finished facility does not preclude its use by the Department of 
Defense or by non-defense academic investigators.
    Question. How, then, does full funding differ from incremental 
funding in providing certainty of project costs?
    Answer. With full funding, we anticipate requesting funds only once 
for most projects, twice for large projects, and three times only for 
the largest of our projects. Accordingly, our cost estimating 
associated with Conceptual Design Reports and Title I will need to 
continue to improve as we are essentially precluded from correcting the 
estimates.
              dual-axis radiographic hydrodynamic facility
    Question. Regarding the DARHT facility, the budget justification 
indicates that DOE has a study underway which will be the basis for 
selection of the best technology for the second axis accelerator. Why 
is DOE proceeding with the detailed design and long-lead procurement on 
the second-axis prior to completion of the Technology Options Study?
    Answer. The Technology Options Study will be completed in April 
1997 and a technology selection decision by the Department will be made 
later this year. Detailed design and long-lead procurement for the 
second-axis will not begin until fiscal year 1998, after the technology 
selection. Our fiscal year 1998 budget request assumes the use of the 
same technology as the first axis, pending final selection of the 
technology. If a different technology is selected, our fiscal year 1999 
budget request will be adjusted to reflect the new technology 
requirements.
    Question. What are the potential problems in assuming the use of 
the same technology as the first axis and then changing to some other 
technology?
    Answer. A decision will be made on the selection of technology 
prior to the submission of the fiscal year 1999 Budget Request and 
before commencing any detailed design or long-lead procurement 
activities. Therefore, no problem with this strategy is anticipated.
    Question. What are the potential cost impacts?
    Answer. Detailed cost estimates for the second-axis accelerator 
will not be available until after the technology selection decision is 
made, later this year. If it is determined that adding multi-pulse 
capability (considered highly desirable to meet science-based stockpile 
stewardship requirements) is technologically feasible, additional 
funding may be required in the amount of $10 to $20 million.
           processing and environmental technology laboratory
    Question. What would be the impact on the costs and schedules if 
the $29.8 million requested in the budget to fully fund the Processing 
and Environmental Technology Laboratory at the Sandia National 
Laboratory in New Mexico were not provided?
    Answer. Following the full funding concept, the $29.8 million we 
have requested in fiscal year 1998 is Budget Authority to fully fund 
the Processing and Environmental Technology Laboratory. We have not 
identified additional obligational authority in fiscal year 1998 and 
would plan to continue the project in fiscal year 1998 with 
obligational authority already available. Therefore, there would be no 
impact on cost and schedule by deferring the $29.8 million Budget 
Authority until fiscal year 1999. An independent cost estimate (ICE) of 
the Title I preliminary design is now underway to ensure that the 
estimated cost is compatible with the scope contained in the 
preliminary design. Our fiscal year 1999 Congressional Budget request 
will update, if necessary, the planned obligation and cost schedule.
                                 atlas
    Question. Is the ATLAS project at the Los Alamos Lab proceeding on 
schedule and have the problems related to installing the equipment in a 
different building been resolved?
    Answer. The ATLAS project is well underway and proceeding on 
schedule. The change in building location is completely resolved and 
has had no impact on the execution of this project.
         subcritical experiments at the nevada test site (nts)
    Question. What are subcritical experiments, and what makes the 
distinction between subcritical and critical?
    Answer. The subcritical experiments planned by the Department at 
the Nevada Test Site are scientific experiments to obtain technical 
information needed for Stockpile Stewardship. They will involve high 
explosives and nuclear weapon materials, such as plutonium. In a 
subcritical experiment, the high explosive will be detonated to create 
high pressures similar to those achieved in the early non nuclear 
stages of a nuclear weapon; however, the configuration and quantities 
of materials will be such that nuclear criticality cannot be reached. 
Technical reviews to confirm this have been completed by two 
laboratories and by an outside group (the JASON's). In their review of 
these experiments, the JASON's concluded that `` * * * these particular 
experiments will add valuable scientific information * * * and that 
there is no conceivable scenario in which these experiments lead to 
criticality.'' This means that there will be no self-sustaining nuclear 
chain reaction in the experimental assembly and any nuclear reactions 
will die out. In a critical or supercritical system, a self-sustaining 
nuclear chain reaction can be created and large amounts of energy can 
be released from nuclear processes.
    Question. Can you give the committee a layman's example of the 
magnitude of force or energy that is given off from one of these 
experiments?
    Answer. Essentially all of the energy from these experiments is due 
to the high explosives that are detonated. In the first planned 
experiment, which will get equation of state data on plutonium, about 
160 pounds of high explosives will be detonated, an amount comparable 
to that used in road construction for removal of a small hill. The 
second planned experiment, which will measure ejecta mass distributions 
in shocked plutonium, is much different than the first in that a 
smaller quantity of explosives is required: less than a quarter of a 
pound or the amount in several large firecrackers. There will be no 
measurable amount of nuclear fission energy released in these 
experiments. Future subcritical experiments are expected to have an 
energy release in about the same range.
    Question. How important are these experiments to the Stockpile 
Stewardship strategy? Please explain.
    Answer. These experiments are very important to the Stockpile 
Stewardship Program mission. They will provide needed data for 
assessing nuclear weapons performance and safety via advanced computer 
simulation. The accuracy and credibility of these computer simulations 
will be significantly improved by conducting these subcritical 
experiments. They will provide necessary benchmark data on the high 
pressure behavior of weapons materials, the hydrodynamics of weapons 
components, the effects of aging on materials, and the effects of 
remanufacturing techniques.
    The experiments will also provide mechanisms to meet the 
requirements of the Presidential Directive to maintain nuclear test 
readiness capability. These experiments require, and thereby help to 
maintain, many of the operational skills needed for an underground 
nuclear test, including those related to the site, facilities, 
equipment, and skilled personnel.
    Question. Does the Science-Based Stockpile Stewardship plan 
approved by the President specifically include subcritical experiments?
    Answer. The President has directed the Department of Energy to 
implement a program of Science-Based Stockpile Stewardship (SBSS); 
however, he did not specify program details. Subcritical experiments 
play an important role in the SBSS program. Thus, they are included in 
the Department's Stockpile Stewardship and Management Plan as a 
fundamental component of SBSS.
    Question. Briefly review why DOE has not conducted subcritical 
experiments planned for fiscal year 1996 and fiscal year 1997, and the 
current situation regarding DOE ability to conduct these experiments 
during the remainder of 1997 and fiscal year 1998?
    Answer. The first two experiments were originally scheduled to have 
been conducted in June and September of 1996. Both experiments were 
delayed in order that the Nevada Test Site Sitewide Environmental 
Impact Statement (SWEIS) could be completed and a Record of Decision 
(ROD) issued. Secretary O'Leary issued the ROD on December 9, 1997 that 
identified DOE's plan to conduct subcritical experiments as part of the 
Science-Based Stockpile Stewardship (SBSS) program. More recently, 
certain transparency related issues were being discussed and 
coordinated through the interagency process. These issues have been 
resolved through interagency staff and final efforts are underway to 
obtain approval from the new Secretary of Energy and the White House to 
proceed with the experiments. Secretary Pena has already expressed his 
support for these experiments. Once all outstanding issues are 
resolved, it should take approximately 10 to 12 weeks to conduct the 
first experiment with the second to follow about 8 weeks later. Thus, 
two experiments are expected to be completed in fiscal year 1997. Four 
additional tests are planned for fiscal year 1998.
    The Secretary of Energy issued a statement regarding the schedule 
for subcritical experiments on April 4, 1997. The statement follows as 
an update for the record.
statement of the secretary of energy federico pena on the schedule for 
                        subcritical experiments
    At the United Nations last year, as the first world leader to sign 
the Comprehensive Test Ban Treaty, President Clinton firmly committed 
the United States to the pursuit of a world free of nuclear testing, 
observing that this treaty was the culmination of the work of American 
Presidents--both Republican and Democrat--over the past four decades.
    When the President made the decision to pursue a zero yield 
Comprehensive Test Ban Treaty, he stated that, even in the absence of 
nuclear testing, we would maintain ``strategic nuclear forces 
sufficient to deter any future hostile foreign leadership from acting 
against the interests of the United States.'' The President also 
declared that the maintenance of a safe and reliable nuclear weapons 
stockpile is a necessary condition for U.S. entry into a Comprehensive 
Test Ban Treaty.
    Maintenance of a safe and reliable nuclear weapons stockpile is the 
direct responsibility of the Department of Energy (DOE). To this end, 
we are announcing today a schedule for subcritical experiments--an 
essential component of the Department's program for ensuring the safety 
and reliability of the stockpile. The first in a series of these 
experiments is now scheduled for June 1997, with a second similar 
experiment to follow sometime this fall.
    Over many decades, a group of distinguished scientists known as the 
JASON's has provided the U.S. Government independent, expert analyses 
in defense and arms control issues. At the request of the Department of 
Energy, the JASON's conducted a review of the designs of the 
Department's first two subcritical experiments. In a January 1997 
letter transmitting this review to Acting Secretary of Energy Charles 
Curtis, the JASON's concluded that ``these particular experiments will 
add valuable scientific information to our database relevant to the 
performance of our nuclear weapons, and that there is no conceivable 
scenario in which these experiments lead to criticality.'' Yesterday, 
the JASON's formally released their report.
    Subcritical experiments are essential to our commitments to a world 
free of nuclear testing and a reliable nuclear deterrent and are fully 
consistent with the CTBT. In addition, these experiments complement 
other elements of DOE's Stockpile Stewardship and Management program 
such as the National Ignition Facility and the Accelerated Strategic 
Computing Initiative--additional tools which will help supply the 
confidence in stockpile safety and reliability the President has 
required in order to support the CTBT.
    The Comprehensive Test Ban Treaty represents an advancement of 
peace and security for the American people. It is a clear demarcation 
between the Cold War Era and the post-Cold War world: between a runaway 
arms race, fear of nuclear proliferation and concern about 
environmental degradation--and increased stability, enhanced security 
and ongoing international cooperation. The Department of Energy is 
proud of its contribution toward these important national and 
international goals.
    Question. Are there any obstacles preventing DOE from conducting 
subcritical experiments in 1997?
    Answer. We know of no obstacles that would prevent the Department 
from conducting the two experiments planned for fiscal year 1997.
            subcritical experiments at the nevada test site
    Question. How much funding was appropriated for subcritical 
experiments in fiscal year 1996 and fiscal year 1997?
    Answer. The fiscal year 1996 funding required to plan and prepare 
for the subcritical experiments was approximately $40 million. The 
fiscal year 1997 estimate for all costs associated with the subcritical 
experiments is approximately $60 million. Although not specifically 
identified in a discrete budget line, the funds for the Nevada support 
of the experiments were requested within the Test Capabilities and 
Readiness category of Core Stockpile Stewardship. The funds for the 
laboratory support of the experiments were requested in the 
Experimental Activities portion of the Programs and Initiatives 
category of Core Stockpile Stewardship as well as the Design Assessment 
Science and Technology portion of the Research and Advanced Technology 
category of Core Stockpile Stewardship.
    Question. Since those experiments were not conducted, how were the 
funds appropriated for the experiments used?
    Answer. The department requested and received funding to conduct 
``experiments to demonstrate and exercise capability * * *.'' No 
funding was specifically appropriated for only subcritical experiments. 
When the Secretary determined that it was necessary to postpone these 
experiments, actions were taken to put the first two planned 
experiments in a semi-operational state so they could be restarted and 
completed when the go-ahead was given without significant additional 
technical delay or rebuild and restart costs. Rather than abandoning 
the experimental site, the diagnostic and other scientific equipment 
for the experiments was preserved in a way that degradation would not 
result from the hiatus and the underground complex was also maintained. 
In addition, in this time period, the Department conducted two overall 
operational exercises for the experimental teams and several other 
``dry-runs'' and trials have taken place to assure that staff and 
equipment are in good condition. Not only will these activities benefit 
future experimental efforts at the NTS, but they have also served to 
reinforce and demonstrate our readiness to conduct a nuclear test if 
that were required. Finally, planning work and diagnostic development 
was begun on the technical aspects of future experiments to optimize 
their value in expectation that the go-ahead for them would be 
forthcoming.
    Question. How much funding is included in the fiscal year 1998 
budget for subcritical experiments?
    Answer. The fiscal year 1998 estimate for all costs associated with 
the subcritical experiments is approximately $80 million. Although not 
specifically identified in a discrete budget line, the funds for the 
Nevada support of the experiments were requested within the Test 
Capabilities and Readiness category of Core Stockpile Stewardship. The 
funds for the laboratory support of the experiments were requested in 
the Experimental Activities portion of the Programs and Initiatives 
category of Core Stockpile Stewardship as well as the Design Assessment 
Science and Technology portion of the Research and Advanced Technology 
category of Core Stockpile Stewardship.
                    funding for stockpile management
    Question. Is the budget of $2.0 billion for Stockpile Management 
sufficient to undertake the critical work required to reshape the 
manufacturing complex in 1998 without adverse impact on the capability 
of the complex to respond if required?
    Answer. Within the Stockpile Management budget of $2.0 billion, the 
Stockpile Management Restructuring Initiative will be funded in fiscal 
year 1998, at $17.5 million to support engineering design activities at 
the Y-12 Plant and the Savannah River Site. Additional funding is 
included within operations and maintenance to continue conceptual 
design activities in preparation for initiation of construction project 
line items in fiscal year 1999. The Stockpile Management Restructuring 
Initiative will support the implementation of Departmental decisions 
related to facility downsizing or relocation of missions. This 
initiative will reduce unnecessary infrastructure cost which take away 
dollars to perform weapon workload. The Stockpile Management 
Restructuring Initiative maximizes rightsizing while downsizing. By 
rightsizing, the Department will maintain a capability to increase 
capacity to respond, within broad limits, to stockpile problems. 
Additionally, the budget includes $103.2 million for ADaPT to pursue 
emerging technologies in agile manufacturing, enterprise integration, 
and production process improvements.
    Question. What are the critical problems or issues facing the 
production complex and how does this budget address those concerns?
    Answer. Certain weapon life extension programs are very dependent 
on the Department's ability to conduct enriched uranium operations. The 
Department's facility for uranium operations resides at the Y-12 Plant 
in Oak Ridge, Tennessee. The enriched uranium operations at the Y-12 
Plant have been shut down since 1994. In fiscal year 1998, $27.8 
million will be provided toward reestablishing an enriched uranium 
capability. A resumption of activities plan is underway at Y-12 and on 
schedule but not without risk. The Department is keeping a close eye on 
resumption of operations progress and associated cost.
                          stockpile management
    Question. How successful have you been in integrating the Stockpile 
Stewardship and Stockpile Management Programs?
    Answer. The Department's Stockpile Stewardship and Management 
Program is a single, integrated technical program designed to ensure 
the continued safety and reliability of the nuclear weapons stockpile 
without underground testing. Stockpile Stewardship is a broad, forward 
looking set of capabilities, which include research, design, 
development and testing needed to help DOE and its laboratories assess 
and certify the continuing safety and reliability of the stockpile. 
Stockpile Management activities are the day-to-day manufacturing and 
surveillance operations required to support the stockpile. The 
completion of the first annual update of the Stockpile Stewardship and 
Management Plan (Green Book) reflects the success at integrating these 
two programs. The primary measure of the success of integrating 
Science-Based Stockpile Stewardship and Stockpile Management is the 
completion of the first annual certification of the stockpile. In this 
certification the Secretaries of Defense and Energy, after an extensive 
review by experts within government and at the national laboratories, 
affirmed that the Nation's stockpile remains safe and reliable, and 
that a return to underground nuclear testing is not required at this 
time.
    Question. How much of the $131 million increase was allocated to 
the national labs and how much went to the production complex?
    Answer. In addressing this question, it is important to recognize 
that the Stockpile Stewardship and Management Program is a single, 
highly integrated technical program for maintaining the safety and 
reliability of the U.S. nuclear stockpile. Traditionally, the 
activities of the national laboratories and the Nevada Test Site have 
been regarded somewhat separately from those of the weapon production 
plants. However, although they remain separate budget decision units 
within Weapons Activities, all stockpile stewardship and management 
activities have achieved a new, closer linkage. For instance, the 
Sandia National Laboratories and Los Alamos National Laboratory have 
picked up critical manufacturing functions previously conducted at the 
Mound, Pinellas and Rocky Flats Plants. The fiscal year 1997 
congressional add-on of $130 was allocated in the following manner: 
$74.6 million was divided among the traditional production complex 
consisting of the Kansas City Plant, the Pantex Plant, the Y-12 Plant 
and the Savannah River Site; $43.7 million was distributed to the 
national laboratories; and $11.7 million was allocated between the 
Idaho National Engineering and Environmental Laboratory and Pacific 
Northwest Laboratory.
    Question. What criteria was used to determine how the additional 
funding would be allocated?
    Answer. The Conference Report accompanying the Energy and Water 
Development Bill for fiscal year 1997 provided direction that the 
additional funding be allocated for new tritium source activities, 
enhanced surveillance, advanced manufacturing, and upgrades for the 
tritium recycling facility at Savannah River. Therefore, the additional 
funding was allocated consistent with requirements and milestones 
outlined in Departmental programmatic plans including the Enhanced 
Surveillance Program Plan, the Advanced Design and Production 
Technologies Plan, and the dual-track approach for a new tritium 
supply.
    Question. Provide breakout for the record which shows how the 
increase over the budget request for Stockpile Management and 
Stewardship was allocated by site.
    Answer. The increase over the budget request by site is shown in 
the following table, which I would like to insert in the record. The 
information follows:

           Site Allocations of Fiscal Year 1997 Appropriations

                        [In millions of dollars]

Kansas City....................................................... 13.8 
Pantex............................................................ 14.6 
Y-12 Plant........................................................ 24.1 
Savannah River Site............................................... 23.4 
                        -----------------------------------------------------------------
                        ________________________________________________
      Subtotal Plants............................................. 75.9 
                        =================================================================
                        ________________________________________________
Richland/Pacific Northwest Laboratory............................. 13.0 
Idaho.............................................................  5.9 
Albuquerque.......................................................(25.1)
Headquarters......................................................  6.4 
Community Assistance.............................................. 22.6 
Nevada............................................................ (3.8)
Oakland........................................................... (0.8)
Oak Ridge.........................................................  0.1 
Lawrence Livermore National Laboratory............................ 17.7 
Los Alamos National Laboratory.................................... 46.8 
Sandia National Laboratories...................................... 42.5 
                        -----------------------------------------------------------------
                        ________________________________________________
      Total.......................................................201.2 

    Question. The budget proposes a 10 percent reduction in operations 
funding for the Core Stockpile Management program. How do you explain 
this reduction and does it concern you?
    Answer. The budget request for Core Stockpile Management operations 
and maintenance is $46 million (3.5 percent) below the fiscal year 1997 
appropriation for operations and maintenance. This decrease reflects 
savings from program progression in nonnuclear reconfiguration, the 
nonrecurring payment in fiscal year 1997 of pension plan/sales tax 
liabilities associated with the Mound and Pinellas Plants, and the 
reduction of approximately 350 personnel at the Pantex Plant in fiscal 
year 1997. We believe the funding request for Core Stockpile Management 
is sufficient to support critical workload activities and to ensure 
operation of the complex in a safe, secure, and environmentally sound 
manner.
    Question. Is this something the committee should be concerned about 
as it relates to the ability of the production complex to respond if 
required?
    Answer. The fiscal year 1998 budget request for Defense Programs 
represents a balanced program between Stockpile Stewardship and 
Management programs. It protects core program requirements including 
critical workload activities and operation of the complex in a safe, 
secure, and environmentally sound manner; as well as supporting 
critical initiatives including Tritium Production, Enhanced 
Surveillance, Advanced Manufacturing, Design and Production 
Technologies and the Accelerated Strategic Computing Initiative.
    Question. A significant part of the reduction below the 1997 level 
is made up of a $45.1 (20 percent) decrease in Management and 
Administration. What is the impact of this reduction in terms of people 
and programs?
    Answer. The decrease of $45.1 million from fiscal year 1997 in the 
Management and Administration program is primarily reflective of the 
nonrecurring payment in fiscal year 1997 of pension plan/sales tax 
liabilities associated with the Mound and Pinellas Plants. The decrease 
also recognizes a pro rata share of downsizing efforts at the Pantex 
Plant in fiscal year 1997. We also continue to streamline overhead 
activities in the complex to assure maximum productivity from the funds 
available to us.
    Question. Please provide a detail breakout of what makes up the 
$45.1 million reduction.
    Answer. The detail on the $45.1 million reduction in the Management 
and Administration program follows:

                        [In millions of dollars]

Mound and Pinellas Plant Pension Liabilities...................... -39.0
Downsizing of the Pantex Plant....................................  -3.2
Contractor Streamlining Adjustment................................  -7.9
Increase for the National Resource Center for Plutonium...........  +5.0

    Question. How much is included for the National Resource Center for 
Plutonium?
    Answer. The budget request for Core Stockpile Management includes 
$5 million in fiscal year 1997 and $10 million in fiscal year 1998 
under the Management and Administration program to support the National 
Resource Center for Plutonium.
                          stockpile management
    Question. Could you provide a brief explanation of the Center's 
activities, including the specifics on the DOE responsibilities for 
funding Center activities?
    Answer. The National Resource Center for Plutonium was established 
to demonstrate the Department of Energy's interest in protecting the 
environment, safety, and health of populations adjacent to its sites 
and to provide financial assistance to the State of Texas to facilitate 
the execution of the State's responsibilities to its citizens and the 
public in general. The Center has created six task areas in which it 
conducts activities related to the objectives of the Cooperative 
Agreement. The task areas are: (1) plutonium information resource; (2) 
advisory function; (3) environmental, public health and safety; (4) 
communication, education and training; (5) nuclear and other material 
studies; and (6) administrative support. As outlined in the Cooperative 
Agreement, the Department is responsible for providing $49 million in 
funding over a 5-year period from fiscal year 1995 through fiscal year 
1999, providing $9 million in funding in fiscal year 1995 and providing 
$10 million in funding for each subsequent funding year. The State of 
Texas is responsible for providing $2.45 million in funding over the 5-
year period.
    Question. If there is a memorandum of agreement covering funding of 
the Center, please provide that for the Record.
    Answer. There is no memorandum of agreement covering funding of the 
Center; however, provided for the record is a copy of the ``Protocol 
for Department of Energy Administration of Cooperative Agreement DE-
FC04-95AL85832 with State of Texas.''
    protocol for department of energy administration of cooperative 
            agreement de-fc04-95al85832 with state of texas
                              introduction
    Cooperative Agreement DE-FC04-95AL85832 (the Agreement) provides 
for Department of Energy financial assistance to the State of Texas 
(Texas). Under the terms of the Agreement, Texas will provide 
administrative and fiscal oversight in the performance of mutually 
agreed-to tasks and functions as outlined in the Project Management 
Plan.
    Tasks to be performed under the Cooperative Agreement will 
facilitate the exercise of the State's responsibility to protect the 
health and safety of its citizens and its environment, and will assist 
the Department of Energy in carrying out the missions of the Pantex 
Plant. Examples of activities include conducting public and scientific 
outreach programs on health and environmental effects of plutonium and 
other weapon materials, engaging in studies of the behavior of weapon 
materials in environmental media, performing environmental 
characterization and measurements, and assisting in emergency 
preparedness with respect to the Pantex Plant and surrounding 
environment.
    Examples of activities of interest to the Office of Fissile 
Materials Disposition may include coordinating advisory groups, hosting 
international conferences, and technical activities relating to long-
term storage and disposition of weapons-useable fissile materials.
    The Offices of the Department of Energy that participate in the 
administration of this Agreement are:
  --Albuquerque Operations Office
    --Contracts and Procurement Division, through the Contracting 
        Officer.
    --Amarillo Area Office.
    --Weapons Quality Division, through the Nuclear Technology Programs 
        Manager.
  --The Office of Military Application and Stockpile Management, DP-20, 
        through DP-24.
  --The Office of Fissile Material Disposition, MD-1, through the 
        Technical Director as may be determined following publication 
        of the Record of Decision on the Programmatic Environmental 
        Impact Statement on Storage and Disposition of Weapons-usable 
        Fissile Materials.
                              definitions
    Program refers to the program responsibilities of the Headquarters 
Program Offices, DP and MD. Programmatic review is accomplished to 
ensure consistency with Headquarters' program(s).
    The Project is collectively all of the activities funded under the 
terms of the Agreement. The Project Management Plan, Appendix I of the 
Agreement, establishes the scope of the Project.
    A Task is a specific work element within the project, and defines 
work to be performed, deliverables, schedule, and associated cost. 
Annually, Texas provides their proposed Technical Task Plan for the 
coming fiscal year. This document, titled Continuation Application for 
the Amarillo National Resource Center for Plutonium, contains top-level 
descriptions, deliverables, and costs associated with tasks.
    Supplemental Task Plans are typically two-page statements of 
specific work to be performed, schedules, and associated costs and 
contain more task detail than the broad overview information contained 
in the Continuation Application.
    Technical Monitors are appointed by the Contracting Officer's 
Representative at the Amarillo Area Office and are responsible to 
monitor progress and completion of technical tasks, and on the basis of 
substantial observations, review and approve allocations to Texas in 
support of the terms of the Agreement.
    The Technical Liaison is appointed by Weapons Quality Division and 
is responsible for liaison with the National Laboratories to ensure 
that there is no duplication of effort represented in the tasks 
approved for funding under the terms of the Agreement. The Technical 
Liaison will also be cognizant of opportunities for collaboration 
between the Amarillo National Resource Center for Plutonium, the 
Principal Investigators identified in the task plans, and the National 
Laboratories.
                                purpose
    The purpose of this protocol is to establish the roles, 
responsibilities, and functions of the several DOE offices in the 
administration of this Agreement.
                     albuquerque operations office
Contracts and Procurement Division
    1. Performs Contracting Officer functions within delegated 
authority limits.
    2. Appoints and delegates authority to Contracting Officer 
Representatives for specific contract administration functions.
    3. Ensures that Department funds with respect to this agreement are 
obligated.
    4. Ensures that deliverables meet the administrative specifications 
of the Agreement.
Amarillo Area Office (AAO)
    1. Serves as Contracting Officer's Representative (COR). In this 
capacity provides technical direction for execution of the Agreement, 
consistent with programmatic requirements of the Department and the 
Project Management Plan. Provides guidance to Texas regarding value to 
DOE of individual task proposals and the overall program content.
    2. Designates technical monitors for specific tasks performed under 
the Agreement. Responsible to review and approve allocations to Texas 
in support of the terms of the Agreement.
    3. Ensures that the financial obligations of the Department with 
respect to the Agreement are represented in the Amarillo Area Office 
budget.
    4. Reviews budget withdrawals from the U.S. Department of Health 
and Human Services System to Texas, in accordance with terms of the 
Agreement.
    5. Ensures that deliverables meet the technical specifications of 
the Agreement as defined in detailed supplemental task plans.
    6. Schedules and coordinates annual project review meetings.
    7. Reviews and coordinates performance of tasks that support the 
mission of the Pantex Plant including the programmatic and technical 
issues forwarded from all interested parties.
    8. Proposes or requests tasks to be performed under the Agreement.
    9. Participates in project review meetings.
Weapons Quality Division
    1. Supports technical responsibilities of the COR. Ensures that 
task proposals are unique and not duplicative of ongoing programs at 
DOE laboratories. Identifies collaborative opportunities for tasks in 
association with DOE laboratory programs.
    2. Reviews budgets and supporting task plans submitted by the 
Center to ensure that the Center's activities are consistent with the 
joint objectives and the Project Management Plan specified in the 
agreement. Consolidates comments and suggestions regarding programmatic 
and technical issues and forwards results to the COR.
    3. Reviews and approves the Annual Technical Task Plan 
(Continuation Application) and any mid-year revisions in coordination 
with DP-24, MD-1, AAO, and DOE laboratories as appropriate.
    4. Provides technical review of the Continuation Applications and 
Supplemental Task Plans submitted by the Amarillo National Resource 
Center for Plutonium prior to approval of the Continuation Application.
    5. Serves as technical liaison for the AAO concerning work to be 
performed under the Agreement.
    6. Proposes or requests tasks to be performed under the Agreement.
    7. Participates in project review meetings.
  office of military application and stockpile management, dp-20, doe 
                              headquarters
    1. Requests and reviews detailed Supplemental Task Plans prior to 
recommending approval of the Annual Technical Task Plan.
    2. For those tasks of interest to DP-20, responsible to review and 
recommend approval of budgets and supporting task plans submitted by 
the Center to ensure that the Center's activities are consistent with 
the joint objectives and the Project Management Plan specified in the 
Agreement.
    3. Ensures that funds are identified to Albuquerque Operations 
Office to support approved tasks of interest to the Office of Defense 
Programs being performed under the Agreement.
    4. Consults with technical liaison regarding proposed tasks to be 
performed under the Agreement.
    5. Proposes or requests tasks to be performed under the agreement.
    6. Participates in project review meetings.
     office of fissile materials disposition, m-1, doe headoqarters
    1. Requests and reviews detailed Supplemental Task Plans prior to 
recommending approval of the Annual Technical Task Plan.
    2. For those tasks of interest to MD, responsible to review and 
approve budgets and supporting task plans submitted by the Center to 
ensure that the Center's activities are consistent with the joint 
objectives and the Project Management Plan specified in the Agreement.
    3. Ensures that funds are identified to Albuquerque Operations 
Office to support approved tasks of interest to the Office of Fissile 
Material Disposition being performed under the Agreement.
    4. Consults with technical liaison regarding proposed tasks to be 
performed under the Agreement.
    5. Proposes or requests tasks to be performed under the Agreement.
    6. Participates in project review meetings.
                          joint interest tasks
    The arrangements in fiscal year 1997 for sponsorship and 
administration of tasks in which both DP and MD have a shared interest 
will be resolved on a case-by-case basis by the respective Headquarters 
program offices.
    Programmatic issues associated with tasks to be performed under the 
agreement in fiscal year 1997, in which both DP and MD have a shared 
interest, will be resolved by the involved Headquarters program 
offices.
                               signatures
    The following parties agree that the foregoing definition and 
assignment of roles and responsibilities is appropriate and will be 
used in administering the subject Cooperative Agreement with the State 
of Texas. Any changes desired will be negotiated with all parties and 
documented in subsequent revisions of this protocol.

Richard W. Brown
____________________________________________________

For Thomas P. Seitz          Date 10/25/96
Deputy Assistant Secretary for
Military Application and Stockpile
Management, Office of Defense Programs

____________________________________________________

Gregory P. Rudy          Date 11/12/96
Director
Office of Fissile Materials Disposition

____________________________________________________

Bruce G. Twining          Date 10/6/96
Manager
Albuquerque Operations Office
        chemical and biological weapons nonproliferation program
    Question. The Committee earmarked $17 million for DOE to undertake 
an R&D Program related to detection of materials used in making 
Chemical and Biological weapons. How much funding has been allocated 
for this effort in 1997, and what funding level is requested for fiscal 
year 1998?
    Answer. The Department has allocated the full $17 million earmarked 
in fiscal year 1997 to the Chemical and Biological Weapon 
Nonproliferation Program. This program is focused on the development of 
technologies and capabilities to detect the transportation, production, 
and use of chemical and biological agents and their precursors. The 
Department has requested $23 million in fiscal year 1998, $19 million 
for continuing research and development and $4 million allocated to 
supporting emergency management activities.
    Question. Briefly discuss the various Chemical and Biological 
activities, including funding levels, underway in DOE and other Federal 
agencies.
    Answer. There are numerous Federal agencies involved in chemical 
and biological defense activities. In particular, the Department of 
Defense and the Intelligence Community have lead roles in this arena 
within the United States Government. I cannot, at this time, provide 
detailed information on the nature and extent of other agencies' 
programs and associated funding levels. However, these programs are 
significant and we are working closely with all appropriate agencies.
    The Department of Energy's (DOE) Chemical and Biological 
Nonproliferation Program (CBNP) was initiated in 1997 in response to an 
appropriation of $17 million in the Energy and Water Development 
Appropriations Act of 1997. This appropriation acknowledged the concern 
over chemical and biological weapon proliferation and the recognized 
technical capabilities of the DOE laboratories. The DOE has a long 
history in the chemical and biological sciences with present programs 
estimated at greater than $1 billion annually.
    The fiscal year 1997 CBNP program is focused on research and 
development. The program for later years anticipates expansion into 
threat assessment and training and operations areas.
    The CBNP addresses common issues across the nonproliferation area 
with program elements supporting incident response, military 
operations, policies and treaties, and intelligence. The program was 
formulated by identifying the overlap between gaps in existing 
technologies and DOE laboratory competencies that if successfully 
addressed would provide unique leverage. The program was coordinated 
with multiple agencies representing technology developers as well as 
the end-users of the technologies (e.g., Department of Defense, Federal 
Bureau of Investigation, Federal Emergency Management Agency, Public 
Health Service, etc).
    The fiscal year 1997 program focuses on four key areas:
    (1)Fundamental Biology which addresses key issues for other 
technical areas, particularly detection and attribution;
    (2) Detection which involves development of multiple detection 
technologies with an emphasis on biological detection and 
identification;
    (3) Transport Modeling which involves development of transport 
models particularly for complex urban areas; and
    (4) Decontamination which involves development of rapid, 
environmentally benign decontamination technologies.
    In the area of Fundamental Biology, DOE's capabilities derived from 
the human genome program are being leveraged to determine the detailed 
molecular function and structure of potential biological threat agents. 
Additionally, in conjunction with the Center for Disease Control, we 
are participating in the development of capabilities to detect exotic 
or newly emerging diseases on a global scale. Funding in this area is 
$5 million in fiscal year 1997 and the budget request for fiscal year 
1998 is $5.5 million.
    In the Detection area, we are working to develop highly sensitive, 
highly specific, and low cost detection systems for identifying 
exposures to biological agents of concern. It is hoped that these 
detectors will rapidly provide first responders information about the 
nature and extent of the agent(s) used in an attack. We are drawing on 
DOE'S substantial experience in DNA-based detection technology to 
provide a new generation of fieldable, highly-sensitive detectors that 
can identify different big-strains as well as detect bio-engineered 
threats. We are also leveraging DOE capability in micro-engineering and 
the chemical sciences to develop miniaturized sensors (``chemical lab-
on-a-chip'') to detect toxins and chemical agents. We are also 
investing in work to determine how stand-off detection (from up to 
kilometers away) may be used to identify chemical or biological agents. 
Funding for sensor development is $8.3 million in fiscal year 1997 and 
the budget request for fiscal year 1998 is $9.8 million.
    In the area of Transport and Fate Modeling in fiscal year 1997, we 
are building on DOE's large-scale computer and modeling capabilities to 
evaluate, develop and apply models for predicting the dispersal of 
chemical and biological agents released in the atmosphere in open 
terrain, within cities, and within structures such as buildings and 
subways. The information thus generated will be used to define 
fundamental design criteria for detection technology (e.g., required 
sensitivity and range), to support operational response planning, 
training, exercises, and the development of concepts of operation for 
first responders.
    In fiscal year 1998 we are including an upgrade to DOE's 
Atmospheric Release Advisory Capability to include the capability to 
provide near-real time predictions of chemical and biological agent 
releases and their effects. Although this capability has broad 
application to industrial accidents, it will be particularly useful to 
provide real time assessment of potential terrorist attacks focused on 
chemical plants or bio-facilities near or embedded within population 
centers. Funding for Transport and Fate Modeling is $1.7 million on 
fiscal year 1997, and the budget request for fiscal year 1998 is $2.7 
million.
    In the area of Decontamination we are focusing on Department of 
Defense and incident response needs for rapidly deployable, 
environmentally benign decontamination technologies. These technologies 
include foams, catalytic sorbents and low temperature plasmas, and are 
focused on recognized needs in the areas of decontamination of 
facilities and sensitive equipment. Funding for fiscal year 1997 in the 
area of Decontamination is $2 million, and the budget request for 
fiscal year 1998 is $2 million.
    The area of Threat Assessment is a proposed new program element for 
fiscal year 1998. DOE intends to integrate chemical and biological 
threat assessment capabilities into DOE's existing nuclear threat 
assessment capabilities in fiscal year 1998. This effort has been 
coordinated with and will be executed in conjunction with the 
Department of Defense, the Intelligence Community, and the FBI. In 
addition to addressing chemical and biological threats directed at 
critical DOE facilities, this capability will be made available to 
address the broader range of chemical and biological terrorist threats. 
No funding was provided for the Threat Assessment area in fiscal year 
1997. The budget request for this area in fiscal year 1998 is $2 
million.
    The area of Training and Operations is a proposed new program 
element for fiscal year 1998. This effort will support DOE's 
participation in scenario development, exercises and training in 
conjunction with the Department of Defense, Director of Military 
Support and the Chemical and Biological Defense Command. This will 
ensure that DOE's unique requirements are addressed and that DOE 
leverages the Department of Defense's efforts in this area. No funding 
was provided for the Training and Operations area in fiscal year 1997. 
The budget request for this area in fiscal year 1998 is $1 million.
    Question. How are DOE programs coordinated with other Federal 
agencies in order to eliminate duplication of effort?
    Answer. The Department's Chemical and Biological Weapons 
Nonproliferation Program was configured with full participation and 
review from the user and technical communities. Three criteria were 
used to develop the DOE Program: DOE should address high priority gaps 
in the United States Government's capability to counter proliferation 
of chemical and biological weapons, the DOE program should be 
complimentary to, rather than duplicative of ongoing efforts, and the 
DOE program should leverage existing DOE capabilities and strengths.
    Based on these criteria, the Department of Defense, the 
Intelligence Community and elements of Law Enforcement and the Incident 
Response Community reviewed the DOE Laboratories' core capabilities and 
recommended areas where DOE could provide unique, high leverage support 
to address gaps in capability. The user community also acted in an 
advisory capacity to the DOE in the selection of the multi-laboratory 
teams chosen to execute the R&D program and jointly reviewed the 
proposed program.
    The DOE program was reviewed by the Counterproliferation Review 
Committee (CPRC) Standing Committee and will be included in the CPRC 
fiscal year 1997 Report to Congress. This Committee, composed of 
representatives from the Department of Defense, DOE and the 
Intelligence Community and chaired by the Deputy Secretary of Defense, 
is responsible for coordinating the Nation's efforts to develop 
capability to counter the proliferation of nuclear, chemical and 
biological weapons. We will continue to rely on the CPRC to ensure the 
DOE Program is included in the interagency coordination process.
    Question. Provide a crosswalk for the record showing the level of 
funding for 1997 and 1998 for the various programs and activities 
involved in the Chem./Bio. Effort.
    Answer. Funding for the Chemical and Biological Weapons 
Nonproliferation Program is $17 million for fiscal year 1997. The 
budget request for this program for fiscal year 1998 is $23 million. 
The crosswalk for fiscal year 1997 and fiscal year 1998 funding is as 
follows:

  CHEMICAL AND BIOLOGICAL WEAPONS NONPROLIFERATION PROGRAM FUNDING INFORMATION FOR FISCAL YEAR 1997 AND FISCAL  
                                                    YEAR 1998                                                   
                                            [In millions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                                    Fiscal year          Fiscal year 1998       
                                                                   1997 Research -------------------------------
                         Program element                                and        Research and      Emergency  
                                                                    development     development     management  
----------------------------------------------------------------------------------------------------------------
Fundamental biology.............................................             5.0             5.5  ..............
Sensor development..............................................             8.3             9.8  ..............
Plume dispersal.................................................             1.7             1.7             1.0
Decontamination.................................................             2.0             2.0  ..............
Threat assessment...............................................  ..............  ..............             2.0
Training and operations.........................................  ..............  ..............             1.0
                                                                 -----------------------------------------------
      Totals....................................................            17.0            19.0             4.0
----------------------------------------------------------------------------------------------------------------

                           nuclear smuggling
    Question. Provide the same information for the nuclear smuggling 
activities.
    Answer. For the Office of Nonproliferation and National Security, 
activities specifically tailored to counter nuclear smuggling total 
$8.6 million in fiscal year 1997. Experience over the past two years 
has shown that gaps exist in the Department's overall counter nuclear 
smuggling program and the Department's support to other agencies in 
this endeavor. To close these gaps, we have outlined a new initiative 
to appreciably increase the funding to counter nuclear smuggling by 
$12.6 million, for a total of $21.2 million in fiscal year 1998. The 
funding levels for the various programs and activities involved in the 
counter nuclear smuggling effort are detailed in the following table:

                                      COUNTER NUCLEAR SMUGGLING ACTIVITIES                                      
                                            [In millions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                                                         Fiscal year 1998       
                                                                    Fiscal year  -------------------------------
                          Decision unit                            1997 funding     Increase to                 
                                                                        \1\        base funding    Total funding
----------------------------------------------------------------------------------------------------------------
Nonproliferation R&D............................................             3.0             4.0             7.0
Nuclear safeguards..............................................             0.2             2.0             2.2
Emergency management............................................             2.8             2.5             5.3
Energy intelligence.............................................             1.9             1.6             3.5
Arms control....................................................             0.7             2.0             2.7
Program direction...............................................  ..............             0.5             0.5
                                                                 -----------------------------------------------
      Total.....................................................             8.6            12.6            21.2
----------------------------------------------------------------------------------------------------------------
\1\ Reflects fiscal year 1997 funding directly related to nuclear smuggling activities included in base funding.

      material protection, control and accounting (mpc&a) program
    Question. Briefly review the Material Protection, Control and 
Accounting (MPC&A) program.
    Answer. The goal of The Department of Energy's (DOE) Nuclear 
Material Protection, Control and Accounting (MPC&A) Program is to 
reduce the threat of nuclear proliferation by strengthening security at 
all facilities in Russia, the Newly Independent States (NIS), and the 
Baltic states that contain plutonium or highly enriched uranium in 
forms other than nuclear weapons. Plutonium or highly enriched uranium 
are the essential ingredients of nuclear weapons. Preventing their 
theft or loss is the first line of defense against nuclear smuggling 
and nuclear terrorism. The MPC&A program is a critical component of our 
national security strategy because it prevents nuclear material from 
entering the smuggling pipeline, where it is difficult or impossible to 
track.
    DOE and its national laboratories have been working directly with 
technical experts in Russia, Ukraine, Kazakstan, Belarus, and Latvia to 
improve MPC&A since 1994. In 1995 DOE established a special Task Force 
to coordinate and accelerate this work. By the end of 1996 cooperative 
work was underway at over 44 sites in Russia, the NIS, and the Baltics.
    DOE also assists the nuclear regulatory authorities in these 
countries in creating national systems for nuclear material control and 
accounting. For example, in June 1995, DOE and Gosatomnadzor (GAN), the 
Russian nuclear regulatory agency, signed an agreement to cooperate on 
six projects, including the creation of the Russian Federal Materials 
Control and Accounting Information System and supporting development of 
the MPC&A regulatory base in Russia. DOE has also initiated MPC&A 
assistance programs for nuclear materials used by the Russian Navy and 
Icebreaker fleets and for nuclear materials during transportation in 
Russia.
    Question. How many facilities will be completed by the end of 
fiscal year 1997?
    Answer. By the end of fiscal year 1997, MPC&A upgrades will have 
been completed at over 20 facilities. (22)
    Question. How many additional locations will DOE be undertaking in 
fiscal year 1998?
    Answer. DOE will have agreement to cooperate at all known 
facilities which use or store weapons-useable nuclear material in 
Russia, the NIS, and the Baltics during fiscal year 1997. If any 
additional sites are identified which use or store weapons-useable 
nuclear material, DOE will seek to add those facilities to our program.
    Question. How many additional facilities will DOE need to initiate 
beyond 1998?
    Answer. DOE does not anticipate any additional facilities beyond 
1998.
    Question. What is the schedule for completing this program?
    Answer. DOE will complete all MPC&A upgrades in smaller facilities 
across Russia, NIS, and the Baltics in Calendar Year 1998. Ongoing 
upgrades at all remaining facilities are scheduled to be complete by 
the end of Calender Year 2002.
                           nuclear smuggling
    Question. What is the nuclear smuggling threat and how is DOE's 
program designed to address that threat?
    Answer. Recent events, such as the bombings at the World Trade 
Center, the Murrah Federal building in Oklahoma City and in the Atlanta 
area, as well as the breakup of the former Soviet Union, have 
intensified concern about transnational threats such as nuclear 
smuggling and terrorism sponsored by rogue states and unconventional 
and dissident groups. Reported incidents of alleged illicit nuclear 
trafficking increased dramatically in the early 1990's and have 
remained high. Presidential direction on Counterterrorism and on 
Nuclear Materials Control, as well as the National Defense 
Authorization Act for Fiscal Year 1997, mandate a national effort to 
reduce the danger of nuclear smuggling and the associated potential for 
nuclear terrorism. The U.S. government is addressing this threat 
through several of its civilian and military agencies and 
organizations. Based upon unique nuclear expertise, experience, and 
programs, the Department's overall effort to counter the threat of 
nuclear smuggling and the associated potential for nuclear terrorism 
involves integrated and focused strategies to:
  --Protect sources of special nuclear materials from theft;
  --Work with other U.S. agencies to identify and track the activities 
        of national and sub-national groups seeking special nuclear 
        materials, either through theft or purchase;
  --Provide technology to meet needs of U.S. Government and other 
        nations to detect and intercept illicitly trafficked nuclear 
        materials;
  --Support law-enforcement operations and diplomatic undertakings; 
        including training and assessments; and
  --Plan, prepare, and exercise the capabilities needed to stop end-
        users of smuggled nuclear materials.
    The Department has recently completed a Program Plan for 
``Countering the Threat of Nuclear Smuggling'', which has been 
separately provided to the Committee. There are several well-
established DOE programs related to countering nuclear smuggling, 
including: domestic and international materials protection, control, 
and accountability; threat credibility assessment; and the nuclear 
emergency search programs for responding to threats of nuclear 
terrorism. Additionally, the Department's capability to assess nuclear 
black market sales has been instrumental in evaluating the hundreds of 
nuclear smuggling scams that have occurred during the last few years 
and in rapidly concentrating scarce resources on those few events that 
actually involved special nuclear material. Other program elements 
which contribute to the Department's overall effort include 
intelligence work on foreign weapons programs and export controls of 
nuclear-related dual-use technology. Finally, DOE conducts basic 
research and technology development in support of all of these program 
elements and strategies.
    Question. Provide a breakout showing the funding provided in 1997 
and that proposed for 1998 for each program, project or activity:
    Answer. A breakout of funding in fiscal year 1997 as well as the 
fiscal year 1998 budget request for nuclear smuggling activities 
follows:

                                      COUNTER NUCLEAR SMUGGLING ACTIVITIES                                      
                                            [In millions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                                                         Fiscal year 1998       
                                                                    Fiscal year  -------------------------------
                          Decision unit                            1997 Funding     Increase to                 
                                                                        \1\        base funding    Total funding
----------------------------------------------------------------------------------------------------------------
Nonproliferation R&D............................................             3.0             4.0             7.0
Nuclear Safeguards..............................................             0.2             2.0             2.2
Emergency Management............................................             2.8             2.5             5.3
Energy Intelligence.............................................             1.9             1.6             3.5
Arms Control....................................................             0.7             2.0             2.7
Program Direction...............................................  ..............             0.5             0.5
                                                                 -----------------------------------------------
      Total.....................................................             8.6            12.6            21.2
----------------------------------------------------------------------------------------------------------------
\1\ Reflects fiscal year 1997 funding directly related to nuclear smuggling activities included in base funding.

    For the Office of Nonproliferation and National Security, 
activities specifically tailored to counter nuclear smuggling total 
$8.6 million in fiscal year 1997. Experience over the past two years 
has shown that gaps exist in the Department's overall counter nuclear 
smuggling program and the Department's support to other agencies in 
this endeavor. To close these gaps, we have outlined a new initiative 
to appreciably increase the funding to counter nuclear smuggling by 
$12.6 million, for a total of $21.2 million in fiscal year 1998.
Highlights of fiscal year 1996-1997 activity:
    Provided guidance to International Atomic Energy Agency (IAEA) and 
the United Nations Special Commission on Iraq on potential indicators 
of reconstituted Iraqi nuclear program using smuggled material.
    Successfully demonstrated pager-sized radiation detector at an 
international airport in the United States. Both U.S. Customs Service 
and Department of State are planning procurements of ``radiation 
pager''. Also benchmarked radiation environments at ports of entry for 
U.S. Customs Service.
    Provided technical support for nuclear collections by Intelligence 
Community.
    Worked with U.S. Customs Service and the Department of State to 
provide training and equipment for foreign customs agencies (Project 
Amber).
    Completed initial demonstration of U.S. laboratories' capabilities 
to do forensic analysis and attribution of seized nuclear material.
    Assessed 75 incidents of purported nuclear smuggling worldwide and 
developed trend analyses and summaries for other agencies. Provided 
experts for nuclear awareness training including Department of State 
and Federal Bureau of Investigation-sponsored International Law 
Enforcement Academy in Budapest.
Highlights of additional activity planned in fiscal year 1998:
    Physical protection of fissile nuclear material outside the former 
Soviet Union will be assessed and improved through the IAEA or on a 
bilateral basis.
    Customized versions of equipment now utilized at DOE facilities 
will be prototyped in joint programs with the U.S. Customs Service and 
other Law Enforcement Agencies to enhance the security of U.S. borders. 
Stand-off and active detection systems against shielded uranium will be 
prototyped. New technology to support highly portable and inexpensive 
in-field analysis by law enforcement and intelligence communities and 
first responders will be developed.
    Forensics and attribution of smuggled nuclear material will be 
operationalized and demonstrated in annual exercise.
    Increased analytical work and classified equipment will support 
intelligence community efforts related to nuclear smuggling and 
terrorism.
    Technical manuals, procedures, training and a `` customer help'' 
service to assist Law Enforcement Agency reaction and response to 
nuclear detections will be provided.
             treaty monitoring and proliferation detection
    Question. One of the most important areas related to 
nonproliferation is treaty monitoring and proliferation detection, yet 
the budget request does not place the same high priority on these 
activities as it does on some other areas. Would you comment on this?
    Answer. Treaty monitoring and proliferation detection are indeed 
important areas of nonproliferation research and development. However, 
during this era of constrained resources and attempting to address 
numerous other priority program areas and initiatives, we have been 
unable to provide additional funds for treaty monitoring and 
proliferation detection research and development in the fiscal year 
1998 Budget Request.
                        other defense activities
    Question. What accounts for the continued increases related to the 
spent fuels work in North Korea?
    Answer. The budget for the Spent Fuel Canning Project will drop 
from $7.9 million in fiscal year 1997 to $5 million in fiscal year 
1998. The Department has estimated that an annual budget of $5 million 
will be necessary to ensure proper maintenance of the spent fuel stored 
at Nyongbyon. The Department expects to maintain the fuel for a period 
of four to seven years, at which time the fuel is to be removed from 
North Korea.
    Question. What is the extent of U.S. activities in 1997 and 1998?
    Answer. In 1997, the U.S. will finish securing all 8,000 spent fuel 
rods in stainless steel canisters, followed by placement of the 
canisters into storage racks in the spent fuel pool at Nyongbyon, 
Democratic People's Republic of Korea. This activity will include 
maintenance on the canning equipment as required, completing the 
remaining rods in the water filled basin, and transferring the 750 fuel 
rods stored in a dry pit adjacent to the water-filled basin into the 
basin with subsequent canning. International Atomic Energy Agency 
(IAEA) safeguards seals will be applied by the IAEA when canning is 
complete.
    In 1998, the U.S. will begin the long-term maintenance of the spent 
fuel. This will include activities necessary to maintain the clarity of 
the spent fuel basin so that the fuel canisters and storage racks can 
be visually inspected, instituting periodic monitoring and inspections 
of the fuel within the canisters using remote means which will ensure 
continued fuel canister integrity, and maintaining the operability of 
the canning and conditioning equipment currently at the site so that 
any failed canisters can be replaced in a timely manner.
    Question. Review the extent of remaining U.S. activities under the 
agreement?
    Answer. Most other commitments made to the Democratic People's 
Republic of Korea (DPRK) are beyond the scope of the Department of 
Energy's currently assigned tasks, although, in some cases, specific 
Department expertise is utilized.
    For example, the oil shipments and light water reactor supply 
agreement are the responsibility of the Korean Peninsula Energy 
Development Organization (KEDO), although the Department has supplied 
some technical support. Monitoring the shutdown of the various nuclear 
facilities is being performed by the International Atomic Energy 
Agency. Eventually many of the currently frozen facilities will be 
decommissioned. We hope that the experience being gained by the 
Department at the Department of Energy nuclear complex sites will be of 
use to that effort.
    Fuel disposition.--Under the Agreed Framework, the 8000 fuel rods 
currently being canned will ``not be reprocessed within the DPRK.'' 
This presumes that the canisterized fuel will eventually be transported 
out of the DPRK. DOE has not been assigned responsibility for assessing 
various disposition options, but we recommend that other countries 
become involved in disposition option studies. Funding such study is 
now under consideration through the Korean Peninsula Energy Development 
Organization.
    Waste disposition.--While wastes have been and are being generated 
by on-going fuel canning, water treatment, and basin cleanup 
activities, waste disposition is not the responsibility of the U.S., 
but rather the responsibility of the DPRK. As waste material, filters, 
etc., are generated, they are transported to waste sites by DPRK 
technicians.
        nonproliferation and national security program direction
    Question. Program Direction for Nonproliferation and National 
Security increases from $88.1 million to $94.9 million, $5.6 million of 
this increase is for Support Service Contracts. How will the $5.6 
million increase be spread by activity and what added value will be 
realized by the increase?
    Answer. The information on the increase to Support Service 
Contracts is as follows:

                                            SUPPORT SERVICE CONTRACTS                                           
                                            [In thousands of dollars]                                           
----------------------------------------------------------------------------------------------------------------
                                                                    Fiscal year                                 
                                                                       1997          Increase/      Fiscal year 
                                                                  appropriations     decrease      1998 request 
----------------------------------------------------------------------------------------------------------------
Headquarters:                                                                                                   
    Nonproliferation and Verification Research and Development..           1,601            +200           1,801
    Emergency Management........................................           1,225             -71           1,154
    Arms Control and Nonproliferation...........................           7,077            +923           8,000
    Safeguards and Security.....................................           5,996          +1,186           7,182
    Declassification/classification.............................           9,600          +2,000          11,600
    Energy Intelligence.........................................             550          +1,315           1,865
    Resource Management.........................................           1,200  ..............           1,200
                                                                 -----------------------------------------------
        Total Headquarters......................................          27,249          +5,553          32,802
    Nevada Operations Office....................................             525  ..............             525
                                                                 -----------------------------------------------
        Total Support Services Contracts........................          27,774          +5,553          33,327
----------------------------------------------------------------------------------------------------------------

    Support service contracts are an intricate part of Nonproliferation 
and National Security's program performance. Contract employees offer 
unique technical skills not always available in the Federal workforce. 
Limited Federal staffing continues to make the program reliant on 
meeting national security and international requirements through use of 
technical and management support services.
    $5.6 million is the requested increase. Of this increase, $1.3 
million is required for the Office of Energy Intelligence which 
increasingly relies on support service contracts as the only viable 
solution to provide the technical expertise necessary to meet the 
requirements of a continually expanding mission. The fiscal year 1998 
funding for support service contracts will provide direct support to 
the Counterintelligence Program, Special Technologies Program, and 
automatic data processing (ADP) support. In addition, funding will 
provide intelligence infrastructure support such as security, including 
computer security, and classified document control.
    Foreign intelligence services have steadily targeted DOE assets, 
subjecting them to increased risk. Counterintelligence briefings are 
imperative to combating that trend. The support service contractors 
provide Intelligence Community reporting, incident reporting, training, 
counterintelligence database maintenance, indices checks, risk 
management, counterintelligence briefings and debriefings.
    The Special Technologies Program serves as the gateway for the 
Intelligence Community to access the DOE technology base in support of 
operational requirements by identifying dual-use technologies and 
facilitating technology transfers. The support service contractors 
serve as technical analysts and technical liaison between the 
Intelligence Community and the laboratory research and development 
community. They also maintain the project database, review technical 
proposals for technical merit, and coordinate technical interagency 
meetings.
    The Office of Energy Intelligence depends totally on support 
service contracts to accommodate its automatic data processing (ADP) 
needs, which is also compatible with the spirit of OMB Circular A-76. 
The only other option available to meet the Office of Energy 
Intelligence ADP requirements is to hire federal staff to perform that 
function; the general downward trend in Federal staffing renders that 
option nonviable.
    Intelligence communications support is critical to the Office of 
Energy Intelligence. Intelligence communications support involves the 
Secure Energy Analysis System at Department of Energy Headquarters, 
which includes dedicated connectivity to Field Intelligence Elements 
located at national laboratories and the Department's Nevada Operations 
Office. Support is provided to the Counterintelligence Analytical and 
Research Data System and for an unclassified local area network linked 
to the Intelligence Community's Open Source Information System (OSIS).
    The LAN-based Secure Energy Analysis System has servers at 
headquarters and a mixture of work stations and server configurations 
at each of the Field Intelligence Elements. In addition to office 
applications, this network provides desktop access to intelligence 
message traffic, Intelink (the Intelligence Community's Joint Worldwide 
Intelligence Communications System/web-based system for dissemination 
of finished intelligence and other products) and unclassified news 
sources such as Reuters. Analytical tools available on the Secure 
Energy Analysis System include the Energy Intelligence Information 
System and Pathfinder. Pathfinder is a software package that provides 
intelligence analysts with a user-friendly, automated means of 
analyzing, loading, manipulating, and storing large quantities of data 
from a variety of sources. The OSIS server and a small number of 
workstations provides access to unclassified holdings (databases and 
electronic publications) maintained by Intelligence Community agencies 
and the Community Open Source Program Office (COSPO); OSIS is a 
proprietary (password-protected) subnetwork of the Internet, and the 
system offers full Internet access to analysts.
    Intelligence is often derived from information that is concealed or 
not intended to be available for use by the acquirer; as a result, 
information management and processing is more innately critical in 
intelligence than most other programs within the Department. The 
support service contracts maintain both hardware and software and 
provide the necessary system upgrades. As a member of the Intelligence 
Community, the Office of Energy Intelligence must adopt system upgrades 
on a schedule with the rest of the Community to remain a viable, 
productive and effective player. The loss of intelligence 
communications support would disable the capability to provide fast 
turnaround intelligence to the Department and other U.S. Government 
policymakers. Intelligence must be timely or it is useless.
    The safeguards and security increase of $1.2 million added value 
will be to provide the technical expertise necessary to meet our 
requirements of Executive Order 12958 on Classified National Security 
Information, Executive Order 13010 on Critical Infrastructure 
Protection, Presidential Decision Directive 39, Atomic Energy Act of 
1954, and departmental safeguards and security policy. Continued 
erosion of funding for the safeguards and security support service 
contract will result in not being able to keep the domestic national 
security program operating at a level necessary to ensure adequate 
oversight and direction of DOE's nuclear weapons, nuclear materials, 
classified information and facilities.
    The $2.0 million increase in declassification support services in 
fiscal year 1998 will enable the Department to meet Executive Order 
12958 annual declassification requirements. The decrease in the fiscal 
year 1997 support services resulted in a substantial decrease in the 
number of full-time equivalents conducting reviews in support of the 
Executive Order's annual declassification requirements. As a result, 
the fiscal year 1997 annual requirement will be met only by combining 
the surplus of pages reviewed in fiscal year 1996 with the actual pages 
reviewed in fiscal year 1997. The current level of resources, however, 
will not sustain compliance with the Order's requirements in fiscal 
year 1998. In addition, the increase will provide resources to support 
the Department's burgeoning litigation activities. Litigation support 
activity resources would otherwise be drawn from the declassification 
core mission activities, resulting in non-compliance with statutory and 
executive order requirements. In January 1997 alone, we expended $1.0 
million in contractor support to conduct classification reviews of 
documents to comply with a single court order. During this period of 
time, all other document reviews were halted.
    The $0.9 million increase for the Arms Control and Nonproliferation 
program reflects support services required for priority areas such as 
assisting Russia, the NIS and the Baltics in improving security of 
nuclear weapons; the MPC&A program; establishing transparent and 
irreversible nuclear reductions worldwide; and additional support 
services for Mutual Reciprocal Inspections and the U.S.-Russia-IAEA 
Trilateral Initiative.
    The $0.2 million increase for the Nonproliferation and Verification 
Research and Development program reflects support services to provide 
chemical/biological/microbiological scientific and technical support 
for Congressionally mandated expansion of the R&D program to include 
detection of chemical and biological weapons production, 
transportation, and use. This is essential because there is no current 
staff experience in this area.
    Question. Why does Salary and Benefits for the Nevada Office 
increase from $568,000 to $690,000 with no increase in FTE?
    Answer. While there has been no increase in FTE's at the Nevada 
Office from fiscal year 1997 to fiscal year 1998, the original fiscal 
year 1997 cost estimates for salary and benefits for the Nevada Office 
were underestimated. The fiscal year 1998 request of $690,000 was 
calculated based on actual salary and benefits costs to date for fiscal 
year 1997 as well as the projected year-end costs for fiscal year 1997 
and inflation.
    Question. Why does the FTE strength for the individual offices 
total 415, yet the bottom line total for FTE's shows only 410?
    Answer. The fiscal year 1998 FTE strength adds to 410. However, I 
believe you are speaking to the fiscal year 1997 Current Appropriation 
column of our budget. There is a typographical error in the 
Headquarters FTE subtotal, the number should read 345 not 340, with the 
total for fiscal year 1997 being 415 FTE's.
                    worker and community transition
    Question. The budget request for Worker and Community Transition 
increases by $8.1 million to $65.8 million, a 14 percent increase. Who 
is eligible for payment under this program, contractor or federal 
employees?
    Answer. The Worker and Community Transition program provides 
funding associated with work force restructuring related to changes in 
the defense production mission, primarily involving contractor 
reductions at sites managed by Defense Programs. This program also is 
the only authorized source of funding to assist communities adversely 
impacted by reductions in Department of Energy contractor and/or 
federal work force.
    It is estimated that approximately 1,500 contractor separations 
will occur during fiscal year 1998 related to changes in the defense 
production mission, primarily due to decisions on strategic stockpile 
management. Severance and related costs associated with these 
reductions are for benefits for contractor employees and are estimated 
to be $30 million. Approximately $7.5 million is anticipated to be 
available to fund other high priority requests in order to mitigate 
adverse impact on mission performance. Overall this is an increase of 
$12.5 million from estimated worker costs in fiscal year 1997. 
Community Transition Assistance is forecast to decline from $32.6 
million in fiscal year 1997 to $28.3 million in fiscal year 1998 in 
light of smaller overall forecasts for contractor reductions in that 
year.
                        work force restructuring
    Question. The budget justification indicates that the Department is 
considering ``taxing'' individual programs in order to increase the 
amount of funding available for Worker and Community assistance. What 
is the status and schedule for implementing those plans, and how much 
funding will other programs be required to contribute in 1997 or 1998?
    Answer. The Department has consistently funded through the affected 
program budgets costs associated with work force reductions not related 
to changes in the defense production mission, but resulting from steps 
to improve operational efficiency or to address changes in funding. 
These include costs associated with severance payments provided for 
under contract, and represent an up-front cost to achieve greater 
overall savings through restructuring the work force. These funds are 
not provided to the Worker and Community Transition program, but are 
allocated directly by the affected programs.
    Overall it is estimated that program offices will incur 
approximately $120 million for such costs in fiscal year 1997. 
Preliminary estimates are that $40-50 million may be borne these 
programs in fiscal year 1998. More precise estimates will depend on 
future analyses to determine necessary work force changes, and benefits 
packages that may be provided.
    Question. Provide a list by program, project, or activity of the 
source of this additional funding.
    Answer. The following estimate is based on currently forecast 
separations in major DOE programs factored to an average overall 
separation cost of $20,000, which is the Department's experience to 
date. The largest portion of other program costs anticipated for fiscal 
year 1998 are related to the sale of the Elk Hills Naval Petroleum 
Reserve.

                        [In millions of dollars]                        
------------------------------------------------------------------------
                                                        Fiscal year     
                                                 -----------------------
                                                     1997        1998   
------------------------------------------------------------------------
Environmental management........................         110          18
Other programs..................................          10          24
------------------------------------------------------------------------

                             former workers
    Question. The budget includes additional funding to initiate a 
pilot program at 5 DOE sites for evaluating the health of former 
workers who may be at significant risk due to past exposures. Explain 
the purpose of the pilot program, including why it is critical to 
initiate the pilot program in 1998 and how it is different from other 
ongoing studies?
    Answer. This program is mandated by 42 U.S.C. Sec. 7274i, Program 
to Monitor Department of Energy Workers Exposed to Hazardous and 
Radioactive Substances. This law directs the Secretary of Energy to 
develop medical evaluation programs for current and former DOE workers 
at significant risk of work-related illness as a result of exposures to 
hazardous and radioactive substances while working at DOE facilities. 
The pilot program for former DOE workers began in October 1996 at 6 
sites.
    The purpose of the pilot program is to identify former workers who 
meet the criteria established by the statute. For many groups of former 
DOE workers, such as those employed in the construction trades, 
information has not previously been compiled to indicate how many of 
these individuals were employed at DOE sites, the substances to which 
they were exposed (radiation or hazardous materials) during their DOE 
employment, whether job-related exposures were potentially hazardous to 
their health, or whether their health has suffered adversely as a 
consequence of their work. These 6 pilot efforts seek to define the 
need and possible scope of any further medical monitoring that may be 
warranted among former DOE employees.
    This program is different from other existing programs because it 
is specifically tailored to former workers who may be at risk. The 
program was initiated in 1996 after an 18-month effort that involved 
public meetings with stakeholder groups to gain input in determining 
the initial shape of the pilot program. It was clear from these 
meetings that more information was needed about exposures and health 
concerns of former workers before embarking on a potentially large and 
costly medical monitoring program. It was the decision of the 
Department to start with a limited number of pilots or needs 
assessments to determine whether, and for whom, a more extensive 
medical monitoring program was indicated.
    The program is divided in two phases. Phase I is a 1-year needs 
assessment which allows outside investigators to identify critical 
groups of at-risk former workers who may benefit from medical 
surveillance. Phase II is predicated on the demonstration in Phase I of 
the need for a medical monitoring program. Depending on the size of the 
at-risk population, identified in Phase I, Phase II monitoring could 
take up to 4 years.
    Question. How long will this pilot program take and what is the 
expected total cost?
    Answer. Six Phase One feasibility studies are now underway and 
findings are expected in the fall of 1997. Results from the Phase One 
studies will be peer-reviewed by an outside organization to determine 
if data is sufficient to move into Phase Two medical monitoring. Up to 
three additional Phase One studies at different sites may be added this 
year. The fiscal year 1998 budget request assumes completion of all 
Phase One studies and the initiation of limited medical monitoring for 
some workers. Until the determinations are made on the Phase One 
studies, it is difficult to predict the number of workers who will be 
monitored or the cost of a medical monitoring program in the outyears.
    Question. Provide a funding profile by year through completion.
    Answer.
                                                            In thousands
Fiscal year:
    1996..........................................................$2,800
    1997.......................................................... 3,500
    1998.......................................................... 5,500
    1999.........................................................( \1\ )

\1\ TBD.
---------------------------------------------------------------------------
                         funding appropriations
    Question. What is the rationale for funding the Dose Reconstruction 
and State Health Studies in the Non-Defense portion of ES&H?
    Answer. In fiscal year 1997, all Health Studies activities were 
consolidated in the Office of Environment, Safety and Health Defense 
(Other Defense Activities) account. However, following a review of our 
fiscal year 1998 budget, the Department shifted $29 million from the EH 
Defense Appropriation account to the EH Non-Defense Appropriation 
account because of funding caps. To make an efficient and cost-
effective transition, the EH Defense Program Direction account 
($10,185,000 in fiscal year 1998) was shifted to the EH Non-Defense 
Program Direction account, thereby consolidating all EH Program 
Direction in one account. Because some Health Studies activities had 
originally been funded under the Non-Defense Appropriation, it was 
logical to incorporate the Health and Human Services Memorandum of 
Understanding and the State Health Agreements programs ($18,731,000) 
back once again into the EH Non-Defense Appropriation. Thus, this shift 
of funds helped alleviate a funding problem.
    Question. Aren't these activities directly related to previous 
Defense activities?
    Answer. It is true that most activities under the Health and Human 
Services Memorandum of Understanding and the State Health Agreement 
Program take place at former Defense locations. However, prior to 
fiscal year 1997, these two programs, the Health and Human Services 
Memorandum of Understanding and the State Health Agreements programs, 
had been originally funded partially under the EH Non-Defense 
Appropriation, and partially under the Defense Environmental 
Restoration and Waste Management Appropriation and the Other Defense 
Activities Appropriation.
            epidemiologic center for statistics and analysis
    Question. What is the Epidemiologic Center for Statistics and 
Analysis, where is it located, and what is the nature of the work which 
will be funded by the $100,000 being requested for the Center?
    Answer. There is a wealth of ES&H data currently collected 
throughout the Department of Energy. However, DOE's ability to use 
these data effectively in identifying and analyzing current and 
emerging health and safety issues among its workforce is hampered by 
the fact that they are maintained in multiple, single purpose data 
bases that are not linked to each other. The Epidemiologic Center for 
Statistics and Analysis is the name of an internal program created 
within DOE's Office of Epidemiologic Studies in fiscal year 1996 to 
develop methods to put these data to better analytic use in the 
prevention of worker illness and injury. The program is primarily 
designed to (1) identify and integrate data from throughout EH and 
other relevant offices within DOE to ascertain exposures associated 
with adverse health outcomes, (2) provide enhanced capability to 
identify workers at high risk, (3) provide feedback to sites for 
reduction or elimination of adverse health impacts, and (4) provide a 
capability for the assessment of effectiveness of intervention and 
prevention measures.
    Question. Why is it essential that the Center be funded in 1998?
    Answer. Over its first two years, drawing strictly upon internal 
expertise, existing resources, and focusing on existing ES&H data 
collecting systems, the program has developed a data directory, 
somewhat like a library's card catalog, which indexes existing ES&H 
data sets for use in epidemiologic analyses to address worker health 
and safety questions. In fiscal year 1998, through the development of 
relational software and analytical protocols, the program's value will 
be tested using a few typical worker health and safety questions to 
demonstrate its potential to provide more timely and comprehensive 
answers than is currently possible. Such a capability would enhance 
EH's ability for early response to occupational health questions 
through preventing and reducing worker risk. Funding for this project 
in fiscal year 1998 is critical because occupational health and safety 
data related to DOE's growing efforts in environmental restoration and 
cleanup are becoming available and early identification of emerging 
health and safety issues in this area is critical to ensuring that such 
information is used in the timely redesign of worker protection 
procedures.
    Question. Is the $100,000 a one year commitment or does this begin 
a long term funding commitment? If a long term commitment, provide a 
funding profile for the next 5 years.
    Answer. A funding commitment of $100,000 for at least two years 
(with funding provided at the same level, for the same nature of work) 
would allow demonstration of the feasibility of integrating data from 
different data collecting systems within DOE and the opportunities for 
reducing worker health and safety risk. The success of planned program 
efforts will be used to determine whether it is cost-effective to 
pursue further system development. The long-term program funding 
commitment, beyond the two-year feasibility phase, would be based on 
the program's demonstrated success in enhancing the Department's 
ability to identify emerging health and safety problems and reducing 
costs associated with preventable worker illness and injury. Because 
the program utilizes data already collected by DOE, no new data 
collection costs will be incurred. Since the program can be expanded on 
a modular basis, its expansion can be targeted at high priority 
occupational health and safety areas identified as part of program 
development.
                      electrometallurgical program
    Question. Why is the electrometallurgical program included in the 
Defense portion of DOE's budget instead of the non-Defense portion?
    Answer. Bench-scale experiments involving electrometallurgical 
treatment and spent nuclear fuel from some of DOE's National Security 
programs have been conducted at the Argonne National Laboratory-East. 
Congress funded the electrometallurgical treatment R&D effort under 
Atomic Energy Defense Activities in fiscal year 1996 as part of the 
Defense Environmental Restoration and Waste Management appropriation. 
Given the experiments on defense-related spent fuel, the Department has 
decided to request funding for this effort in fiscal year 1998 under 
Atomic Energy Defense Activities but as part of the Other Defense 
Activities appropriation.
    Question. Aren't Defense fuels in a form that require little or no 
processing to meet storage requirements?
    Answer. Methods to certify that acceptance criteria are met for 
direct disposal of spent nuclear fuels in a geologic repository are not 
yet finalized. There are some defense-related fuels that may require 
treatment prior to their ultimate disposal, and depending on the 
results of the demonstration project involving Experimental Breeder 
Reactor-II spent fuel, the Department may propose to apply the 
technology to a wider array of fuels in the event that treatment proves 
to be necessary. I understand that, as part of the K-Basins EIS, the 
Department has decided to proceed with a process of dewatering and 
drying the N-Reactor fuel in preparation for dry storage in the dry 
storage container building. This does not, however, place the fuel in a 
form ready for direct disposal. In any case, no DOE-owned spent nuclear 
fuels have yet been accepted or designated as acceptable for direct 
repository disposal.
    Question. Why has the electrometallurgical treatment program been 
split between non-Defense ($76 million) and Defense activities ($25 
million)?
    Answer. The $76 million you refer to will fund fiscal year 1998 
termination activities at the Experimental Breeder Reactor-II (EBR-II) 
and other facilities at Argonne National Laboratory-West (ANL-West) in 
Idaho. Only $25 million of that budget deals with demonstrating 
electrometallurgical treatment. The remaining $51 million is for other 
termination activities related to placing EBR-II and other facilities 
at ANL-West into an industrially and radiologically safe shutdown 
condition. The demonstration of electrometallurgical treatment of a 
limited amount of EBR-II spent fuel is being conducted using the Fuel 
Conditioning Facility (FCF) at ANL-West. Since the demonstration of 
electrometallurgical treatment is being conducted using non-Defense 
related spent fuel, this activity is funded out of the (non-Defense) 
termination account.
    The $25 million requested under fiscal year 1998 Atomic Energy 
Defense Activities is for the Electrometallurgical Treatment R&D 
experiments at ANL-East in Illinois. These experiments will focus on 
waste form testing and research, analyses, and bench-scale or 
laboratory-scale evaluations of the technology as it might apply to 
other DOE defense-related spent fuels. In light of the fact that the 
experiments involve defense-related materials and since the program had 
previously been funded in a defense-related account, we chose to 
request funding for Electrometallurgical Treatment R&D under the 
Defense Appropriation.
                  electrometallurgical r&d activities
    Question. What is the completion date for electrometallurgical R&D 
activities and how does it compare to previous completion schedules?
    Answer. The goal of the Electrometallurgical Treatment R&D effort 
is to have the basic process technology developed by the end of 1999. 
Experiments involving DOE spent fuels would include laboratory-scale 
demonstrations of the technology on various fuel forms and would be 
completed by the end of 2002. The Department plans to complete the 
demonstration project being conducted at the Argonne National 
Laboratory-West by June 1999, at which point the further use of the 
process for treatment of the entire EBR-II fuel and blanket inventory 
can be considered. Technology development program activities beyond 
fiscal year 2002 would be limited to tasks related to characterization 
and qualification of the high-level wastes produced, to support their 
acceptance for repository disposal. This schedule for the completion of 
electrometallurgical treatment technology development is the same as 
those previously established for this project.
                         nuclear technology r&d
    Question. What is the expected annual funding profile for Nuclear 
Technology R&D for the next 5 years?
    Answer. Program funding is currently projected to continue at the 
$25 million per year level through fiscal year 1997. Based on the 
results ofthe EBR-II demonstration, we will continue to evaluate and 
adjust future funding requirements to assess the quality and scope of 
work performed, technical challenges that remain, and the magnitude and 
urgency of the need for program R&D products in managing DOE spent 
nuclear fuels.
                           tmi-2 fuel funding
    Question. Why are experiments and analysis of TMI-2 fuel being 
proposed for funding with Defense dollars?
    Answer. The experiments and analysis of TMI-2 core debris are part 
of the basic technology development efforts that we are conducting 
under the consolidated electrometallurgical technology development 
program at ANL-East. We have requested funding for this program as part 
of the Other Defense Activities account, due to the significant 
potential that the technology holds for treating defense-related spent 
nuclear fuels.
                      spent fuel management plans
    Question. Why is $2.850 million being requested to develop spent 
fuel management plans for each of the Central European (former Soviet 
Union) country?
    Answer. Developing spent fuel management plans is only one aspect 
of the spent fuel management program. The purpose of the program is to 
provide technically-sound, economically viable alternatives to 
reprocessing for countries with Soviet-designed reactors. Russia 
continues to have a strong interest in a closed fuel cycle, including 
reprocessing of spent fuel, which the United States no longer engages 
in for nonproliferation and environmental reasons.
    The most viable and cost effective alternative to reprocessing is 
dry storage of spent fuel. Russia has made only limited progress in 
improving the technical safety case for dry storage of fuel from 
Soviet-designed reactors. Because of this, we are working in 
coordination with the International Atomic Energy Agency on an 
initiative to resolve spent fuel storage issues for Paks Nuclear Power 
Plant in Hungary using test facilities in Russia. These issues include 
assessing the validity of using western techniques for analyzing 
Russian-designed reactors and fuel, and the setting and validation of 
acceptable spent fuel dry storage temperature criteria. In addition, 
the dry-cask storage work that we are doing in Ukraine will feed into 
the resolution of the technical issues. Once these issues are resolved, 
we believe that we will be able to transfer appropriate dry-cask 
storage technology to other countries of central and eastern Europe 
with Soviet-designed reactors and growing spent-fuel problems, such as 
Armenia, Bulgaria, Czech Republic, Lithuania, and Slovakia.
    Additionally, technical issues need to be resolved to permit 
Russia's nuclear regulatory authority to license the burning of 
weapons-grade mixed oxide fuel in power reactors, one of the two 
options the United States is pursuing for disposition of its nuclear 
weapons material. Although related work has been carried out by Russia, 
Germany and France, the United States has an interest in working with 
Russia on several issues that would allow Russia to follow a parallel 
path to the United States in disposing of its weapons material.
                            funding profile
    Question. What is the expected funding profile for this program 
over the next 5 years?
    Answer. As presently envisioned, resolution of the technical issues 
related to dry storage of spent fuel--specifically creating a code 
validation data set, developing dry storage temperature criteria, and 
then conducting a dry-storage demonstration--is likely to take from 
1998 through 2003 to complete at a total cost of approximately $9 
million over those five years. We project that resolving the technical 
issues related to burning weapons-grade mixed oxide fuel in Russian 
power reactors will require approximately $16 million during that same 
time.
                         prototype inactivation
    Question. What explains the $44.1 million reduction in the 
Evaluation and Servicing program?
    Answer. In 1993, Naval Reactors began inactivation of six shutdown 
land-based R&D reactor plants. The inactivation effort includes fuel 
removal, decontamination and appropriate remediation and dismantlement 
work at three sites. The inactivation plan peaks in fiscal year 1997 
and was scheduled to be completed by fiscal year 2002. To date, this 
work has progressed on schedule with fuel removed from five plants and 
numerous buildings and structures demolished. However, due to 
Departmental funding constraints, the inactivation effort has been 
scaled back. Naval Reactors expects to terminate inactivation efforts 
for the S3G and D1G test reactor plants in New York and the S1C plant 
in Connecticut. In addition, the removal of fuel from the A1W plant in 
Idaho could be delayed and selected remediation work terminated. There 
will be no adverse environmental consequences from these changes.
    Question. What impact will this reduction have on improving plant 
operations and designing new naval reactor cores in the future?
    Answer. Inactivation work on the test reactors supports plant 
operations and design in two principal ways. First, the knowledge 
gained in servicing the test reactors aids in servicing operating Naval 
plants. For example, the A1W test reactor defueling is providing 
important experience in advance of the first-of-a-kind servicing of the 
NIMITZ Class aircraft carriers.
    Second, the examination of cores, materials and components removed 
from the test reactors provides valuable data on expected performance 
and contributes to the database for future designs. The findings are 
used to validate detailed predictive analyses which support the 
operation of plants with lifetimes spanning three or more decades. For 
example, data recently obtained showed unexpected phenomena requiring 
additional investigation. The results of the investigation have 
implications for the performance and safety analysis methods used to 
evaluate existing plant designs, such as those in the Trident ballistic 
missile submarines, and for the design of plants for new applications, 
such as the new attack submarine.
    The reduction in the Evaluation and Servicing program will impair 
the ability to obtain these types of data in a timely manner.
    Question. Please explain the following statement from the budget 
justification:
    Full realization of savings is dependent on defueling and long-term 
inactivation efforts currently underway, which will leave these 
facilities in an environmentally benign state.
    Answer. Naval Reactors shut down six of eight land based test 
reactor plants. While this allowed a sizeable reduction in operation 
costs, a liability exists which must be dealt with responsibly. The 
costs of addressing this liability must eventually be met along with 
the $200 billion liability for cleaning up the entire DOE complex.
                                 ______
                                 

                  Questions Submitted by Senator Burns

             transportation and storage of nuclear weapons
    Question. Dr. Reis, could you please explain to me how antiquated 
nuclear warheads, that reside in Montana, are being transported out of 
the state?
    Answer. Nuclear weapons no longer needed for national security are 
retired. All retired nuclear weapons are transported from the military 
bases in specially designed Safe Secure Trailers (SST's) that have 
protective and deterrent systems installed and are accompanied by armed 
Federal couriers. The SST's and the couriers are provided by the DOE. 
The timing and rate of weapon returns from the Department of Defense to 
the Department of Energy is coordinated between the Departments.
    Question. What are the safety measures that need to be met and are 
they being met?
    Answer. Weapon shipments require the use of the SST's, special 
packaging and loading configurations, and specific routes and campaign 
durations. There are a wide range of safety measures that apply. The 
transportation configurations are certified in a manner that ensures 
the safety and health of DOE workers, the public, and the environment. 
The packaging for nuclear weapons cargo is certified to meet the 
applicable requirements of 10CFR71 or 49CFR100-178. This certification 
is supported by comprehensive transportation risk assessments, and 
safety analysis reports have been prepared to assess the risk to public 
safety and the environment from weapon shipments. These documents are 
updated every 5 years or earlier if programmatic requirements change. 
They systematically describe the transportation system, including 
design, operations, and maintenance, and identify and assess hazards 
associated with normal environments (those environments the weapon is 
expected to experience during its stockpile-to-target sequence) and 
abnormal environments and accident scenarios and responses. Positive 
measures, both engineered features and administrative controls 
(procedures, personnel training, personnel reliability standards, 
etc.), are implemented to ensure that the probability is less than 1 in 
1,000,000 of a nuclear explosive accident occurring from a traffic 
accident, terrorist attack, acts of God (lightning, high winds, flood, 
fire, earthquake, etc.), theft, human error, and other events. These 
documents, as well as the SST's protective and deterrent systems, 
courier training, and special packaging and loading configurations, are 
independently verified for functionality, accuracy, and thoroughness by 
a team of DOE and national laboratory experts prior to shipments being 
authorized. Over the past 40 years, over 89 million miles have been 
covered by SST's without damage to cargo or a release to the public.
    Question. Where are these warheads being sent for storage?
    Answer. All retired weapons that are returned to DOE custody are 
currently transported to the Pantex Plant in Amarillo, Texas. The 
Pantex Plant is the Department's primary facility for performing weapon 
assembly and disassembly operations. It has undergone the rigorous 
safety analysis and verification necessary to gain authorization to 
safeguard and store all types of nuclear weapons. At present, the 
Pantex Plant is DOE's only facility approved for routine weapon 
storage.
              stockpile stewardship and management program
    Question. Also, can you give me your assurance that the current 
Stockpile Stewardship and Management Program fulfills its 
responsibilities to the American people guaranteeing the safety and 
reliability of our present stockpile of nuclear warheads?
    Answer. The U.S. nuclear weapon posture has undergone significant 
changes in response to the changing world political environment, the 
U.S. halting of new nuclear weapons development, an observed moratorium 
on nuclear testing, and the negotiation of a ``zero'' yield 
Comprehensive Test Ban Treaty. Nevertheless, President Clinton directed 
the Department of Energy (DOE) and Department of Defense (DOD) to 
establish a program that ensures the Nation's nuclear deterrent is 
maintained and continues to be a safe and reliable cornerstone of U.S. 
national security policy.
    In response to this directive, DOE developed the Stockpile 
Stewardship and Management Plan (SSMP) with the intent of ensuring high 
confidence in the safety, reliability, and performance of the stockpile 
without nuclear testing. The primary responsibility of the SSMP is to 
describe how Defense Programs (DP) will continue to ensure high 
confidence in the nuclear weapons stockpile.
    The current SSMP is striving to fulfill its responsibilities. This 
is a continuous effort. It will not be quick or easy and will require a 
competent technical staff supported by scientific tools and facilities 
that have been identified as necessary for this effort. I can assure 
you DOE will continue to strive to maintain high confidence that the 
U.S. nuclear weapons stockpile will be available to perform as 
specified in joint DOE/DOD requirements documents.
    DOE and DOD perform an annual certification of the stockpile to 
ensure the nuclear weapons continue to be safe, reliable, and available 
to perform as required. The initial certification to the President by 
the Secretaries of Energy and Defense was completed on February 7, 
1997.
             funding for maintenance and facility upgrades
    Question. Finally, I have heard various comments by other members 
of the nuclear community that other sections of our weapons and 
security programs are at risk or in crises because of the emphasis 
being placed on the stockpile stewardship and management program. Can 
you respond to these concerns? Specifically, Karen Clegg, the president 
of the Government Services and Federal Manufacturing and Technologies, 
AlliedSignal expressed her concerns that other areas, such as 
maintenance and upgrading facilities, are being diverted to concentrate 
more support for this program.
    Answer. As the nuclear weapons complex has been downsized with 
reduced budgets since the end of the Cold War, it is true that hard 
trade-offs have resulted in short-term imbalances between near-term 
program needs and maintenance and infrastructure support at some 
weapons facilities. This concern has also been voiced by some facility 
managers such as Karen Clegg of AlliedSignal. This concern is not due 
to ``emphasis placed on the stockpile stewardship and management 
program,'' however. In fact, the development and initial implementation 
of the stockpile stewardship and management program is resulting in 
increasing levels of work and corresponding budgetary support that will 
allow this trend in maintenance and infrastructure funding to be 
reversed in those portions of the complex needed to support the 
Stockpile Stewardship and Management Plan.
    DOE continues to monitor the status of facility maintenance at all 
Defense Programs sites. Though the overall funding level, as a percent 
of facility costs, has decreased somewhat in recent years, the level 
associated with key safety and operating systems remains high. What has 
not received optimal funding recently has been the replacement and 
upgrade of plant infrastructure items, such as major roof replacements, 
utility and power system upgrades, and replacement of older equipment. 
The replacements and upgrades of this type are receiving added 
attention within DOE, and increased funding allocations for these 
activities are expected in future years.
                                 ______
                                 

                   Question Submitted by Senator Reid

        nonproliferation and national security program direction
    Question. Mr. Baker, your program to reduce the threat from weapons 
of mass destruction is a tremendously important job. I know that it 
covers a broad range of technical disciplines and responsive actions. 
It joins political scientists with nuclear physicists while executing 
intelligence analysis as well as operational response to actual 
incidents. So I know that this is a complex program with important 
contributions to our national security posture.
    I am nevertheless puzzled by the ``Program Direction'' line in your 
fiscal year 1998 Budget. This line reflected about 13.1 percent of the 
total appropriation for fiscal year 1997, and it has grown to about 
14.2 percent of the total fiscal year 1998 request. I do not know of 
any accepted guide that dictates upper limits for ``Program Direction'' 
or management, but a number more like 9 percent or 10 percent would not 
be surprising to me.
    I am puzzled further by the description of the Program Direction 
line. Your testimony declares that the funding ``will be used to meet 
requirements for the Declassification Initiative, Safeguards and 
Security, Arms Control, Research and Development, and other 
nonproliferation activities.'' Apart from the Declassification 
Initiative, all the rest of this list are dealt with already in your 
program lines.
    So I am confused. It sure appears to me that you have had 
difficulty ``program direction'' from ``program execution.'' And if 
that is true, then it should be possible to reduce the ``Program 
Direction'' request significantly.
    Perhaps you could explain to me and this Committee what is really 
program direction in that line. If some of that line is not program 
direction, please try to explain what it is doing there.
    Answer. I will be very happy to explain the content of the program 
direction line. First, let me state that all activities contained in 
this line are program direction-related. I also believe that what on 
the surface appears to be a difficulty in separating ``program 
direction'' from ``program execution'' is in fact a misunderstanding 
arising from the redefinition of the Department's program direction 
line. At Congressional direction beginning with the fiscal year 1997 
Congressional Budget Request, the Department's program direction line 
has by definition uniformly contained all funding for (1) salary, 
benefits, and travel for federal employees, (2) Headquarters support 
service contracts (technical assistance and management support), and 
(3) other related expenses. This was not the case prior to fiscal year 
1997. Prior to fiscal year 1997, funding associated with these 
activities often appeared in more than one line item. As a result of 
the redefinition, funding which formerly appeared in non-program 
direction lines (hence its association with ``program execution'') now 
appears in the program direction line. The activities associated with 
the funding have not changed, only their location within the budget 
request.
    At this time I would like to explain the specifics of the program 
direction request for Nonproliferation and National Security and why 
this funding is critical to the timely accomplishment of our mission.
    The Nonproliferation and National Security federal staff consists 
of program managers and technical experts who formulate policy, manage 
programs, and provide ``on the ground'' technical expertise. These 
personnel are composed of policy and technical experts required to run 
domestic and international programs and solve operational problems and 
issues. In direct contrast to other Departmental program offices, the 
Office of Nonproliferation and National Security does not have a large 
infrastructure of Federal staff throughout the field structure to 
perform similar tasks. In addition to program management, the staff is 
required to provide analytic and technical assistance to the 
Department's field elements, the U.S. arms control, intelligence, law 
enforcement, emergency management communities, and international arms 
control and nonproliferation agencies. I would like to emphasize that 
these multi-faceted functions are distinctly different from purely 
program oversight activities conducted by other Departmental 
organizations. The following examples illustrate a few of the types of 
crosscutting operational (vs. oversight) functions performed by the 
Federal staff:
  --In the area of nuclear materials protection, control and 
        accounting, staff provides direct technical support and policy 
        direction on the ground in Russia and the Newly Independent 
        States assessing facilities for specific improvements, and 
        cooperating directly with those states in implementing the 
        recommended upgrades.
  --In the area of domestic safeguards and security, staff provide 
        technical assistance to field elements for the implementation 
        of cost-saving safeguards and security measures and develop 
        Department-wide strategic and long-range planning for domestic 
        nuclear safeguards and security.
  --In the area of international arms control and nonproliferation, 
        staff provides direct technical support and policy direction on 
        International Atomic Energy Agency safeguards initiatives, 
        spent fuel canning in North Korea, and mutual reciprocal 
        inspections on excess fissile materials.
  --The Office of Intelligence staff is devoted to providing direct 
        intelligence support to policy officials at the Department and 
        other policy agencies, as well as representing the Department 
        within the Intelligence Community.
  --The Office of Research and Development technical staff manage the 
        broad-based, nationally important R&D program formulating the 
        technical content of the program to satisfy Departmental and 
        interagency operational requirements and directing the National 
        Laboratories' execution of development programs.
  --The Office of Emergency Management staff provides technical 
        assistance to field elements for the implementation of a cost-
        effective emergency management program and provides trained 
        technical staff to respond to the Headquarters Emergency 
        Operations Center upon declaration of an emergency and to 
        provide these experts to other Federal, state, and local 
        government agencies in support of emergency declarations.
    If the Department of Energy does not receive the requested amount 
for salaries, benefits, and travel for the federal staff, it will be 
forced to reduce its current onboard strength. If such an adverse 
action were to occur, the Department would be forced to revert back to 
its former role of merely providing paper studies on reducing the 
global danger posed by weapons of mass destruction rather than its 
present role of providing ``on the ground'' expert analytic and 
technical solutions to such problems.
    Equally critical to the accomplishment of the mission is the cadre 
of personnel provided by Headquarters support service contracts. This 
expertise is funded by the program direction line. Previously, funding 
for these personnel was contained in program activity or ``execution''. 
The functions are not new, only the location of the funding request 
within the budget. These personnel complement the Federal staff and the 
National Laboratory personnel on assignment to Headquarters.
    Approximately one-third of the on-site Headquarters support service 
contractors perform duties associated with the declassification/
openness initiative. On-site contractor support is equally critical to 
meeting mission obligations in the intelligence, arms control and 
nonproliferation, and law enforcement communities which are largely 
centered in the Washington, D.C. area. For example, support to 
policymakers on a growing array of technical nuclear issues requires 
real-time answers that can only be provided if resources are positioned 
locally. Moreover, our impact in the arms control, nonproliferation, 
and intelligence communities is greatly enhanced by the local 
availability of the best technical experts who can participate in the 
on-going dialogue among intergovernmental analysts on policy-relevant 
assessments such as National Intelligence Estimates, arms control and 
treaty negotiations, and technical assessments for planning and 
execution of research and development of technologies and systems for 
treaty monitoring and proliferation detection. The on-site technical 
support service contractors offer a cost-effective complement to the 
limited number of National Laboratory employees who perform similar 
functions in support of the Federal staff. In addition to the on-site 
technical personnel, the Office of Nonproliferation and National 
Security depends totally on support service contracts to accommodate 
its automatic data processing needs and secure intelligence 
communications support.
    The on-site technical support contractor personnel staff are 
critical to the successful and timely accomplishment of our varied 
mission. The only option available to meet our needs would be 
additional Federal staff and/or additional National Laboratory 
personnel at Headquarters, neither is as cost-effective as the present 
policy of using support service contractors. In addition, the use of 
on-site technical support service contractor personnel allows us to 
change the skill mix on a more timely basis to respond to new 
challenges with the appropriate technical expertise. This is not 
possible with the Federal staff (whose retraining is both expensive and 
time consuming) and less cost-effective with the National Laboratory 
personnel. Our policy for the National Laboratory personnel assigned to 
Headquarters is to use them for longer-term research projects and use 
the on-site support service contractors to maintain the necessary skill 
mix.
    The final element of our program direction request is funding for 
other related expenses required for maintaining our Headquarters 
operations. These expenses include rent for Headquarters space, 
utilities, general printing, graphics, copying, supplies, telephones, 
general automation support, postage, and other miscellaneous expenses 
associated with office operations. These expenses constitute our 
portion of the Department's Working Capital Fund. These services were 
previously funded from the Departmental Administration budget line 
item. Beginning with the fiscal year 1997 budget the Department 
transferred these activities and the responsibility for funding to the 
respective program offices.
    In summary, the program direction request is critical if the 
Department is to continue its role of providing ``on the ground'' 
operational technical assistance and timely expert counsel to 
policymakers throughout the arms control, nonproliferation, 
intelligence, and law enforcement communities. Without the full funding 
request, the Department will be required to revert to its former role 
of providing paper studies on the critical national security issues and 
problems confronting the nation.
                                 ______
                                 

                  Questions Submitted by Senator Craig

          consequences of reducing prototype inactivation work
    Question. The Naval Reactors Program is in the process of shutting 
down six land-based prototype plants. One of these is the A1W-A plant 
at the Naval Reactors Facility in Idaho.
    The multi-year inactivation of these shut-down plants began in 1993 
and is half-way complete. To support the timely completion of this 
effort, fiscal year 1998 needs were estimated to be approximately $90 
million.
    The fiscal year 1998 budget requests only half this amount and 
fails to fund the full scope of planned inactivation.
    Experienced crews are in place to complete this work. This funding 
reduction will abruptly terminate their activities. DOE cannot be 
assured these experienced workers will be available to complete this 
work some years from now, when resources do allow its continuance.
    Please explain why DOE proposes to allow funding interruptions to 
increase the overall cost of this work, rather than continuing the 
inactivation of the shutdown reactors to its timely conclusion.
    Answer. The original schedule for inactivation of Naval Reactors 
six shutdown test reactor plants called for work to begin in 1993 and 
be completed in ten years. This plan, predicated on leaving the 
shutdown plants in the optimal environmentally benign status, took 
advantage of trained workers and a logical work sequence of moving from 
plant to plant. To date, the work has progressed on schedule, with fuel 
removed from five of the seven reactors in these plants and numerous 
buildings and structures demolished.
    However, for fiscal year 1998 overall Departmental funding 
constraints reduced funding available to the Office of Naval Reactors. 
Priority for available Naval Reactors funding was given to supporting 
the numerous operating reactors and meeting the Navy's need for a 
reactor plant for the New Attack Submarine, the key to sustaining the 
submarine industrial base and future force level. As a consequence, the 
prototype inactivation effort, though important, was scaled back. The 
resultant impact will be to put the shutdown plants in a safe, but not 
optimal condition, defer related remedial work, and potentially delay 
the defueling of one plant. The deferred work is important and 
eventually must be done.
                                 ______
                                 

                 Questions Submitted by Senator Dorgan

        chemical and biological weapons nonproliferation program
    Question. On page 4 of your prepared statement, you describe the 
Department of Energy's new Chemical and Biological Nonproliferation 
Program, which has been developing technologies to detect poison gases. 
As I recall, the proper detection of chemical weapons was a major issue 
during the Gulf War. At the time, I believe our military personnel lost 
confidence in their ability to detect chemical weapons. We are all now 
wondering whether the alarms that then seemed false might not have 
actually been accurate. In your view, what aspects of our current 
chemical weapons detection capability need to be improved?
    Answer. During the Gulf War false alarms related to detection of 
chemical agents were a major problem. Because of the high false alarm 
rate, our forces lost confidence in their ability to detect chemical 
agents on the battlefield, and in some cases the detectors were 
reportedly shut off.
    While the hand-held Chemical Agent Monitor (CAM) has many positive 
features, it does not have sufficient resolution to reliably 
distinguish between environmental chemical contaminants and chemical 
weapons agents, as was the case in the Gulf War. While changes are 
being made to improve the CAM performance, only limited improvements 
are possible. In order to enhance chemical weapons detection 
capability, detectors based on new technology must be developed. 
Thorough testing in actual or near-actual environments must be done to 
measure background signals and establish performance. The Department of 
Defense and the Department of Energy are working on alternate 
technologies that will provide high sensitivities with minimal false 
positives.
    Question. How are you working to improve them?
    Answer. The major goal of DOE's chemical agent detection program is 
the significant reduction or elimination of false alarm rates. These 
false alarms include both the failure to detect a real agent (false 
negatives) and the indication that an agent is present when it is not 
(false positives). Our objective is to develop a miniaturized, 
autonomous, hand-held multi-agent detector that can detect both 
chemical agents and toxins.
    Question. Could you describe in general terms the technologies you 
are developing?
    Answer. The Department of Energy's approach includes three key 
elements to reduce false alarm rates. The first is the development of a 
detector ``front end'' which cleans up and concentrates the sample. 
This step is followed by micro-separation techniques that separate the 
sample into its component parts in preparation for analysis. Finally, 
the heart of the detector is a series of miniaturized arrays which use 
different measurement and identification techniques to perform multiple 
independent analyses to identify agents. The combination of independent 
means of identifying agents provides redundancy that significantly 
increases specificity and leads to extremely low false alarm rates. The 
detector is designed to be autonomous, hand-held and provide real time 
identification of the full range of chemical weapons agents and 
biotoxins. Within the current budget constraints, a proof-of-concept 
unit will be demonstrated in three years followed by completion of a 
prototype field unit in the fifth year of the program.
                         nuclear test detection
    Question. Also on page 4 of your prepared statement, you discuss 
some of the technologies that the Department is developing in order to 
detect the test of a nuclear weapon, whether under water, in the 
atmosphere, or underground. The Department's capabilities in this area 
will become increasingly important as the Senate considers the 
Comprehensive Test Ban Treaty.
    Your list of technologies includes seismic, radionuclide, 
hydroacoustic, and infrasound. I'm familiar with the notion of seismic 
detection--a bomb going off underground creates a small earthquake, 
which can be detected. What are the concepts behind these other 
technologies?
    Answer. The seismic signal from a nuclear explosion is similar to a 
seismic signal from an earthquake in that the energy released passes 
through the earth as energy waves that can be detected at various 
distances from the source by seismometers. Hydroacoustic and infrasound 
detection technologies are very similar to seismic detection 
technology, since they also detect energy waves. Hydroacoustic waves 
are basically sound waves which travel through water, detected with 
instruments similar to sonar, and infrasonic waves are low frequency 
sound waves which travel through the air and are detected with 
microphones. The principle for each of these technologies is 
essentially the same, but the energy waves travel through each medium 
(air, water, earth) at unique frequencies, and therefore require 
instrumentation tailored to each detection frequency.
    Radiation detection technology is quite different from the other 
three Comprehensive Test Ban Treaty monitoring technologies, since what 
is measured is radiation from decay of radioactive atoms from the 
actual nuclear explosion carried through the air either on particles or 
as a radioactive gas. The detection technology developed by the 
Department of Energy for the special monitoring application under the 
Comprehensive Test Ban Treaty uses commercially available components of 
standard radiation detection equipment (e.g., high purity germanium 
radiation detectors). However, because of an engineering breakthrough, 
the equipment achieves a combination of automation and high 
sensitivity, such that only annual maintenance is required and only 80 
units will provide coverage of the entire earth. The Department is 
delivering bid-model prototypes to the Air Force of the two types of 
detectors that have been agreed to in the treaty protocol, a 
particulate analyzer and a gaseous xenon analyzer. Through Air Force 
procurement the technology will be made commercially available, so that 
all countries can buy the technology and the global network can be 
standardized and serviced uniformly.
    For more detailed information, we have enclosed a copy of our 
Comprehensive Test Ban Treaty Research and Development 1995 Progress 
Report.
    [Clerk's note.--The publication Comprehensive Test Ban Treaty 
Research and Development 1995 Progress Report can be found on the World 
Wide Web home page at http://www.ctbt.rnd.doe.gov/.]
            subcritical experiments at the nevada test site
    Question. I understand that the Administration has scheduled 6 
``subcritical'' nuclear weapons experiments to be conducted underground 
at the Nevada Test Site. These tests do not technically violate the 
terms of the Comprehensive Test Ban Treaty that the United States and 
other countries signed in September 1996. However, the tests may give 
rise to concerns abroad that the United States is still interested in 
developing new nuclear weapons. What is a subcritical experiment?
    Answer. There are two subcritical experiments planned by the 
Department to be conducted at the Nevada Test Site for fiscal year 
1997. These are scientific experiments to obtain technical information 
needed for stockpile stewardship. They will involve high explosives and 
nuclear weapon materials, such as plutonium. The high explosive will be 
detonated to create high pressures similar to those in the early non 
nuclear stages of a nuclear weapon. Data will be obtained on the 
behavior of nuclear weapon materials. The configuration and quantities 
of nuclear materials will be such that nuclear criticality will not be 
reached. This means that there will be no self-sustaining nuclear chain 
reaction in the experimental assembly. Data from such experiments is 
needed as input to the advanced computer analyses that the Department 
plans to use to certify the performance and safety of the nation's 
nuclear weapons stockpile in lieu of conducting nuclear tests. The 
President has stated that the safety and reliability of our current 
stockpile will be maintained.
    Question. What is its purpose?
    Answer. The primary objective of the first planned subcritical 
experiment is to obtain data on the equation of state of plutonium (the 
mathematical relationship among pressure, density, and temperature for 
this material) under several levels of high pressure. The second 
planned subcritical experiment is directed at obtaining data on the 
surface ejecta behavior of plutonium when it is subjected to a shock 
wave from high explosives. This, and similar technical data on aging 
plutonium and remanufactured pits, will be obtained through future 
subcritical experiments. Such data are needed as input to the advanced 
computer analyses that the Department plans to use to certify the 
performance and safety of the Nation's nuclear weapons stockpile in 
lieu of conducting nuclear tests.
    Question. Has the interagency working group decided when to conduct 
the first experiment?
    Answer. Interagency discussions have focused on and resolved key 
policy-related issues of subcritical experiments, such as transparency. 
The decision to proceed with the experiments should be made shortly by 
the Secretary of Energy in consultation with the interagency working 
group.
    The Secretary of Energy issued a statement regarding the schedule 
for subcritical experiments on April 4, 1997. The statement follows as 
an update for the record.
statement of the secretary of energy federico pena on the schedule for 
                        subcritical experiments
    At the United Nations last year, as the first world leader to sign 
the Comprehensive Test Ban Treaty, President Clinton firmly committed 
the United States to the pursuit of a world free of nuclear testing, 
observing that this treaty was the culmination of the work of American 
Presidents--both Republican and Democrat--over the past four decades.
    When the President made the decision to pursue a zero yield 
Comprehensive Test Ban Treaty, he stated that, even in the absence of 
nuclear testing, we would maintain ``strategic nuclear forces 
sufficient to deter any future hostile foreign leadership from acting 
against the interests of the United States.'' The President also 
declared that the maintenance of a safe and reliable nuclear weapons 
stockpile is a necessary condition for U.S. entry into a Comprehensive 
Test Ban Treaty.
    Maintenance of a safe and reliable nuclear weapons stockpile is the 
direct responsibility of the Department of Energy (DOE). To this end, 
we are announcing today a schedule for subcritical experiments--an 
essential component of the Department's program for ensuring the safety 
and reliability of the stockpile. The first in a series of these 
experiments is now scheduled for June 1997, with a second similar 
experiment to follow some time this fall.
    Over many decades, a group of distinguished scientists known as the 
JASON's has provided the U.S. Government independent, expert analyses 
in defense and arms control issues. At the request of the Department of 
Energy, the JASON's conducted a review of the designs of the 
Department's first two subcritical experiments. In a January 1997 
letter transmitting this review to Acting Secretary of Energy Charles 
Curtis, the JASON's concluded that ``these particular experiments will 
add valuable scientific information to our database relevant to the 
performance of our nuclear weapons, and that there is no conceivable 
scenario in which these experiments lead to criticality.'' Yesterday, 
the JASON's formally released their report.
    Subcritical experiments are essential to our commitments to a world 
free of nuclear testing and a reliable nuclear deterrent and are fully 
consistent with the CTBT. In addition, these experiments complement 
other elements of DOE's Stockpile Stewardship and Management program 
such as the National Ignition Facility and the Accelerated Strategic 
Computing Initiative--additional tools which will help supply the 
confidence in stockpile safety and reliability the President has 
required in order to support the CTBT.
    The Comprehensive Test Ban Treaty represents an advancement of 
peace and security for the American people. It is a clear demarcation 
between the Cold War Era and the post-Cold War world: between a runaway 
arms race, fear of nuclear proliferation and concern about 
environmental degradation--and increased stability, enhanced security 
and ongoing international cooperation. The Department of Energy is 
proud of its contribution toward these important national and 
international goals.
                        subcritical experiments
    Question. Have DOD and DOE evaluated the nonproliferation impact of 
conducting a subcritical experiment?
    Answer. The United States Government's commitment to 
nonproliferation of nuclear weapons is a matter of record. The 
indefinite extension of the Non-Proliferation Treaty (NPT) in 1995 
followed by the President's signing the Comprehensive Test Ban Treaty 
(CTBT) on September 24, 1996 is clear evidence that non-proliferation 
is one or our highest arms control priorities. The nonproliferation 
implications of conducting subcritical experiments relate to the 
perception that such experiments are a means to circumvent the CTBT. In 
fact, subcritical experiments are an essential part of the Stockpile 
Stewardship and Management Program (SSMP) that is a key element of the 
safeguards that the President adopted in order to make a CTBT possible. 
Furthermore, subcritical experiments are not and can not be nuclear 
explosions and are not prohibited by the CTBT. Without nuclear testing, 
other methods must be used to ensure the safety, reliability, and 
security of the enduring stockpile. Subcritical experiments are an 
essential component of the experimental and calculational tools to 
provide that assurance.
            subcritical experiments at the nevada test site
    Question. Have the Departments considered how to demonstrate that 
the subcritical experiments are not critical explosions (and therefore 
violations of the CTBT)?
    Answer. The first two planned experiments have been reviewed by 
technical experts at the Los Alamos and Lawrence Livermore National 
Laboratories to assure they will remain subcritical. Each subsequent 
experiment will be reviewed in a similar fashion. In addition, a review 
of the first two planned experiments has been conducted by the JASON's, 
an independent group of technical experts. They concluded that `` * * * 
there is no conceivable scenario in which these experiments lead to 
criticality.'' A similar independent review process will be implemented 
for future subcritical experiments.
    Question. And have the Departments considered whether by conducting 
the experiment underground they might set a precedent that other 
nations might emulate, and that the United States might regret?
    Answer. There are several compelling reasons for the United States 
conducting these experiments as we have planned. Conducting them in an 
already existing underground complex in the isolated Nevada Test Site 
will assure a high degree of safety for the public and for NTS workers. 
Conducting the experiments at the NTS and underground, rather than 
elsewhere and/or in a reusable above ground chamber will also minimize 
the environmental impacts. In addition, the cost to the taxpayer will 
be much less than an above ground, reusable chamber that would take 
many years and many tens of millions of dollars to design, build, and 
certify for adequate safety.
    Presumably, the concern expressed in the Question is that, by 
conducting these experiments underground, other Nations might do the 
same but not adhere to the ``rule of subcriticality'' and escape 
detection. Of course, a great many opportunities exist for violating a 
treaty with a ``zero'' energy release threshold. On the other hand, 
because of the relatively small amounts of energy released, experiments 
of this type could as easily be hidden in an above ground chamber if 
there were less regard for safety, cost, or the environment.
                            b53 replacement
    Question. I was pleased to learn that the Department of Energy's 
weapons management efforts are now leading to the phasing out of the 
B53 bomb, among our oldest nuclear weapons, which only the B-52 bomber 
can carry.
    North Dakotans, who host 36 B-52's, will be relieved to learn that 
a safer weapon, the B61 bomb, is replacing the 35-year-old B53 bomb. 
Could you please describe why the B61's safety, security, and use 
control are improvements over the B53's?
    Answer. The B53 bomb will be replaced by B61-11's. The B61-11 is a 
safer weapon than the B53 because it has modern safety, security, and 
use control features. The insensitive high explosive used in the B61-
11's has a much higher resistance to mechanical and thermal 
environments (e.g., drops, fire environments) than the conventional 
high explosive in the B53's. The B53 does not have all enhanced nuclear 
detonation safety (ENDS) features of a modern weapon such as the B61-
11. Some ENDS features are strong links, weak links, and lightning 
arrestor connectors.

                          subcommittee recess

    Senator Domenici. Thank you very much. It is nice to be 
with you all. The subcommittee will stand in recess subject to 
call.
    [Whereupon, at 11:50 a.m., Thursday, March 20, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]



    ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 1998

                              ----------                              


                        TUESDAY, APRIL 15, 1997

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 2:05 p.m., in room SD-124, Dirksen 
Senate Office Building, Hon. Slade Gorton presiding.
    Present: Senators Gorton, Bennett, Craig, and Murray.
    Also present: Senator Wyden.

                          DEPARTMENT OF ENERGY

                    Bonneville Power Administration

STATEMENTS OF:
        RANDALL HARDY, ADMINISTRATOR
        BRIG. GEN. ROBERT GRIFFIN, COMMANDER, NORTHWEST DIVISION, CORPS 
            OF ENGINEERS--CIVIL, DEPARTMENT OF THE ARMY, DEPARTMENT OF 
            DEFENSE
ACCOMPANIED BY:
        JOHN KEYES, REGIONAL DIRECTOR, BUREAU OF RECLAMATION, PACIFIC 
            NORTHWEST DIVISION REGION
        DAVE GEIGER, PACIFIC SALMON PROGRAM MANAGER, CORPS OF 
            ENGINEERS--CIVIL, DEPARTMENT OF THE ARMY, DEPARTMENT OF 
            DEFENSE
        JOHN VELEHRADSKY, DIRECTOR OF ENGINEERING AND TECHNICAL 
            SERVICES, CORPS OF ENGINEERS--CIVIL, DEPARTMENT OF THE 
            ARMY, DEPARTMENT OF DEFENSE

                   OPENING STATEMENT OF SLADE GORTON

    Senator Gorton. The hearing will come to order. We are 
meeting today to hear testimony with respect to the Bonneville 
Power Administration and related issues.
    First, I would like to thank today's witnesses for coming 
to Washington, DC, to testify at this hearing on the Bonneville 
Power Administration. I also want the record to reflect my 
thanks to Senator Domenici, the chairman of the subcommittee, 
for allowing me to hold this hearing.
    We will cover a broad range of subjects related to 
Bonneville and its operations in the Pacific Northwest, not 
necessarily limited to the fiscal year 1998 budget request. And 
because the issues related to Bonneville are so critical to the 
people of the four Northwest States and Alaska, I have extended 
an invitation to Northwest Senators not on the Appropriations 
Committee, so that they may have an opportunity to participate 
in today's hearings. I do not see any of them here at this 
point, but we will hope that some of them will come or that 
their representatives will be here.
    If you pick up a newspaper from any of the Northwest States 
today you will probably find a story on an issue related to 
BPA. Because Bonneville markets the power from the Federal 
hydroelectric dams along the Columbia and Snake River system, 
it plays a critical role in our regional economy and the 
multiple uses of the river systems. It is because the Columbia 
and Snake River systems and its many uses binds together the 
four Northwest States that any effort to change the operation 
of the river system in one State will most certainly impact 
neighboring States. As a result, the old saying ``we are all in 
this together'' is especially true for the Northwest 
congressional delegation when it comes to Bonneville and the 
Columbia and Snake River issues.

                      regional power system review

    The four Northwest Governors recognize this fact when they 
commissioned a regional review of the Northwest electric power 
system. Included in the regional review was a recommendation 
that Bonneville's power marketing and transmission functions be 
legally separated. This was the single recommendation from the 
review to Congress for legislative action. At its core, this 
recommendation is critical to the future success of any action 
on the part of an individual Northwest State to enact its own 
retail electricity competition legislation.
    Today, Bonneville markets nearly 10,000 megawatts of power 
in the Northwest, and controls well over 50 percent of the 
region's transmission system. Bonneville's high fixed costs and 
a competitive wholesale electric power market make it difficult 
for Bonneville, for the first time in its history, to compete 
in the region with other lower-cost providers of electricity. 
As a result, the temptation exists for Bonneville to use its 
transmission system to assist its ability to market power in 
the region in order to cover its cost. In an effort to avoid 
this temptation, Bonneville has administratively separated its 
marketing and transmission functions. This is a good first 
step.
    Today, we will hear from Administrator Hardy on just how 
far he can take this administrative separation, and at what 
point the law ties his hands from going further. At that point 
it is up to the Northwest delegation to work together to 
address the critical issues related to creating an open 
transmission system. I look forward to this discussion and to 
working with my colleagues after this hearing to build 
consensus on this important issue.

                       fish and wildlife programs

    Finally, last year, after listening closely to the concerns 
of my constituents, I offered an amendment to the Northwest 
Power Act as an amendment to last year's Energy and Water 
appropriations bill that created accountability in the process 
by which over $100 million in annual Bonneville ratepayer funds 
are spent on fish and wildlife programs. I believe that 
accountability in Federal efforts to protect fish and wildlife 
populations is an essential part of restoring fish runs, but it 
is also important to restoring ratepayer confidence. Simply 
put, Bonneville ratepayers want to know that their hard-earned 
dollars are being spent wisely, and not just going down the 
drain.
    My amendment on accountability put us on the right track, 
but there is still ample opportunity to do more. Our goal must 
be a greater role for the region in the fish and wildlife 
decisionmaking process, and greater accountability in the 
expenditure of these limited dollars. With these thoughts in 
mind, I look forward to the testimony of our witnesses.
    And I am now joined not by a Senator from one of the four 
States to which I put out special invitations, but to another 
member of the Appropriations Committee, my good friend Bob 
Bennett from Utah, whose thoughtfulness and wisdom on all of 
these issues is particularly welcome.
    Bob, if you have anything you would like to say before we 
get started, we would be delighted to hear them.

                     STATEMENT OF ROBERT F. BENNETT

    Senator Bennett. I am delighted to come and hear the kind 
words, but I have nothing further to add to your opening 
statement. I will just listen with interest.
    Senator Gorton. Now, I understand, Mr. Hardy, you have a 
statement and General Griffin has a statement. Mr. Keys is here 
to answer questions, but does not have a formal statement, is 
that correct?
    Mr. Hardy. That is correct.
    Senator Gorton. All right, Randy, have at it.

                       statement of randall hardy

    Mr. Hardy. Thank you, Mr. Chairman, and thank you for the 
invitation for this year's Senate Appropriations Committee 
hearing. For the last 3 to 4 years, Bonneville has been facing 
the challenges of a very dynamic and rapidly changing electric 
utility industry. We have seen a price progression that goes 
something like this: In the late 1980's the avoided cost of new 
generation, which was the competitive benchmark that we were 
measuring our power against was some 5 cents a kilowatt hour. 
In 1992, when the Energy Policy Act passed, the avoided cost of 
new generation was a new gas fired combustion turbine at about 
3.5 cents a kilowatt hour. And today, the competition is less 
than 2 cents a kilowatt hour, our wholesale rate being 
essentially about 2.2, 2.3 cents a kilowatt hour. That 
progression gives you some idea of how dramatically wholesale 
prices have fallen in the Northwest, and the competitive 
challenges that have faced Bonneville.
    This competition or this price drop and the problems that 
it has presented for us have been driven by essentially four 
factors. One is the opening up of transmission access pursuant 
to the Energy Policy Act of 1992; second is record low natural 
gas prices nationwide, but particularly in the west coast area; 
third is a general surplus of electricity on the west coast; 
and fourth has been the entrance into the marketplace of new 
marketers and other players who have marketed quite 
aggressively, and, in fact, have in many cases bid below cost 
to gain market share. While these are challenges to Bonneville, 
they have produced undeniable economic benefits for Northwest 
consumers, and one would hope that they would continue.

                 bpa's response to competitive pressure

    Our response to these dramatic changes has been to take a 
number of actions, many of them controversial but all of them 
necessary, to try to cut our costs, increase our revenues, and 
generally stabilize our financial situation. Over the last 3 
years we have cut $600 million a year from our budget. We took 
a budget that in our fiscal year 1995 budget submission started 
at about $2.3 billion in operating costs and net interest 
expenses and grew to a little over $3 billion in a 5-year 
period, and we basically have flat-lined it so that it is at 
$2.3 billion and it will stay at $2.3 billion for the next 5 
years.
    Last year we completed a 1,000-person downsizing of both 
Bonneville employees and full-time contractors. We are now 
about midway through our second 1,000-person downsizing, to be 
completed by fiscal year 1999. By the middle of fiscal year 
1999 we will be an agency of combined Bonneville staff and 
full-time contractors of about 3,000 employees. That will 
contrast with an agency of well over 5,000 employees in fiscal 
year 1994. That gives you some idea of how fast we have come 
down in staffing.
    Thanks to the cooperation of the Northwest congressional 
delegation and the administration, we have worked out an 
agreement to stabilize our fish costs for the next 5 years, at 
an average expenditure level of something over $400 million a 
year. We have terminated two nuclear plants. We have reinvented 
our conservation programs to take them from being basically 
grant programs that were rate-based to fee-for-service programs 
that have to recover all of their costs. We have worked out 
arrangements with investor-owned utilities in the Northwest to 
phaseout the residential exchange program in ways that minimize 
the rate impacts on them and eliminate the competitive pressure 
on Bonneville.
    Again thanks to work from the delegation, we have attained 
special variable separation incentive authority in the fiscal 
year 1996 appropriations bill that has been a major and helpful 
tool in achieving the downsizing numbers that I just described.
    And finally, we have renegotiated all of our power sales 
contracts which were due to expire in 2001. We renegotiated the 
last 5 years of those contracts to allow both direct service 
industries [DSI] and our public utility customers a guaranteed 
amount of diversification, typically on the order of 15 to 20 
percent, in exchange for a take or pay type obligation for the 
remaining 80 or 85 percent of that load. This has helped to 
stabilize Bonneville revenues, while still allowing our 
customers some access to the market. As a result of these 
actions, on October 1 of last year we instituted a 5-year rate 
that represented a 15-percent rate decrease from our previous 
rate. Our basic public utility rate went from 27 mills down to 
24.5 mills, and our rate for high load factor customers, like 
DSI customers, went from 26 mills to 22.5 mills.
    What all these actions have done is basically buy time. We 
are not out of the financial woods yet, but we have 2 to 3 
years, I think, to fashion the longer-term solutions. We have 
spent the last year with the Governor's regional review panel 
obtaining an excellent set of recommendations that I think 
provide a good point of departure for restructuring Bonneville 
in this Northwest electric utility environment. We can, I 
think, proceed now to implement those recommendations or 
variants of those, and look to other activity here, in the 
Congress, as well, and hopefully with administration support.

                           future challenges

    Our real challenges now are in the post-2001 period. They 
center around implementing the regional review recommendations. 
Now, I should make clear that the administration is looking at 
the recommendations, but has not yet adopted any formal 
position on them. It is my hope that we can work with key 
members of the administration, both in the Department of Energy 
and elsewhere, and with both House and Senate staffs, the 
Northwest delegation, and the Governor's representative, to 
formulate a similar package of consensus recommendations, both 
administrative and legislative, that will address our issues in 
the post-2001 period.

                        focus of regional review

    The regional review recommendations center on essentially 
two things. The first is devising a subscription process to 
allocate out our power, at cost, for the long term in the post-
2001 period. If it can be executed, this should allow Northwest 
customers to continue to enjoy cost-based rates, but should 
also provide financial stability for Bonneville, protect the 
taxpayer investment in the Federal hydro facilities and 
transmission facilities, and yet also eliminate the kind of 
competitive threat that we may pose to investor-owned companies 
if we were a so-called aggressive marketer in this role. The 
goal of the regional review is to find a niche for us as a 
long-term allocator at cost that not only protects the Treasury 
and secures our revenues, but also represents the best balance 
between simply abolishing the Bonneville marketing function and 
having us be some sort of a full-scale marketer ala Enron or 
somebody else, both of which are not particularly attractive 
roles. Key in this set of issues that needs to be resolved for 
the subscription process to be successful are some stability 
and post-2001 fixed costs. I am confident that working with the 
administration and the delegation we can be able to 
successfully address those issues.
    The second part of the regional review recommendations have 
to do with a recommendation to legislatively separate our 
marketing and transmission functions. The basic rationale 
behind this recommendation has to do with the fundamental 
conflict that currently exists between the Energy Policy Act 
and the way FERC is appropriately implementing that law and 
Bonneville's organic statutes. The conflict is this: A key 
premise of the Energy Policy Act of 1992 is that major 
transmission owners like Bonneville should not be able to use 
their transmission ownership advantage to manipulate their 
transmission business to advantage their power business and 
disadvantage the power businesses of their competitors, this is 
fundamental to have a competitive, level playing field at the 
wholesale level.
    The problem this presents is such that when the decisions 
relative to this issue gets into my office, all Bonneville's 
organic statutes were written at a time when you have a single 
vertically integrated utility with a single administrator who 
has a number of obligations, principle among which is thou 
shalt make one's Treasury payment. Every September 30 we write 
a check of roughly $800 million that pays off the amount of 
debt, interest, and operating expenses that are due on the dams 
and the transmission system. We have made 13 of those payments 
in a row. We plan on making it 14 this fiscal year, and are 
confident we can do that.
    But the position that leaves you in legally is that if you 
can manipulate as administrator--if you need to and you can 
manipulate your transmission to advantage your power business 
and thereby optimize the chance of you making a Treasury 
payment, you probably have a legal obligation to do that. That 
is so fundamentally in conflict with the Energy Policy Act that 
I think it presents clear political sustainability challenges 
over time, and hopefully working with the administration we can 
get some recognition of that and proceed to address that, 
whether it is through full legal separation or some other 
mechanism.

                         additional challenges

    Finally, in the post-2001 period, Bonneville, in addition 
to implementing the regional review recommendations, is taking 
actions on its own. We have a goal of 2 cents in 2000 for our 
power product. We are at about 2.25 cents now, so we have to 
cut our costs by another 10 percent or so, which we are busily 
engaged in doing. We think 2 cents in 2000 will make our power 
product competitive in most but not all market scenarios. And 
second, we have a goal of flat transmission rates for 10 years, 
so that we are not just shoving costs onto the transmission 
system. We need to keep those rates stable, as well.
    The basic problem that we now have is that the actions I 
have just described have stabilized us for the next 2 to 4 
years, but we have a problem where literally all of our power 
contracts expire on October 1, 2001. On October 1, 2001, 75 
percent of our revenues are up for grabs. We have to take 
actions now, hopefully pursuant to the regional review 
recommendations or some acceptable version of those, that will 
mitigate that 2001 cliff problem.

                           prepared statement

    From my perspective, the sooner we can address these issues 
the better, whether administratively or legislatively. The 
closer to the 2001 cliff we get, the less options we have. So 
the sooner we can take action, the better equipped we will be 
to deal with these issues and the more options we will, in 
fact, have on the table. I am hopeful, Senator, of counting on 
your support and the delegation's support, as well as the 
Governors' and the administration's support, in collectively 
addressing these issues in a unified bipartisan way to achieve 
the results that will stabilize Bonneville to enter into the 
2001 period in an appropriate manner.
    Thank you very much.
    [The statement follows:]

                  Prepared Statement of Randall Hardy

    Mr. Chairman and Members of the Subcommittee, I appreciate this 
opportunity to come before you to discuss past and anticipated 
challenges facing Bonneville and to present an overview of the fiscal 
year 1998 budget for the Bonneville Power Administration.
    Bonneville, like the utility industry in general, is amidst a time 
of great challenge and change. The Subcommittee's attention and support 
continue to be essential as we work to address the challenges we face 
in the Northwest. First, I will discuss the recent market challenges 
and the actions we have taken to meet those challenges. Next I will 
discuss Bonneville's ongoing activities as we look ahead to the 
continuing changes in the industry, and also provide an overview of the 
fiscal year 1998 budget.
                           market challenges
    Bonneville is continuing to respond to the substantial challenges 
from the rapid changes occurring in the industry. The prices of 
alternative sources to Bonneville power have dropped dramatically over 
the past 15 years due to changes in the utility industry, deregulation 
of natural gas, and more recently a power surplus on the West Coast. 
The resulting increase in competition has brought wholesale market 
prices to below Bonneville cost-based rates. As a result, Bonneville 
has lost load as customers have sought other sources of power.
    In 1993, Bonneville set out to respond to competition in wholesale 
power markets. Declining salmon stocks and flings under the Endangered 
Species Act created additional upward pressure on costs and reduced 
hydroelectric production. The Energy Policy Act of 1992 and subsequent 
FERC decisions set the stage for increasing competition at wholesale 
levels. Bonneville was challenged by declining alternative fuel costs, 
increasing competition, and growing environmental responsibilities.
                           meeting the market
    These forces have converged in such a manner that Bonneville has 
had to take steps to reshape Bonneville's marketing, planning and 
organization. After extensive cost cutting, reorganization and 
downsizing, through the use of voluntary separation incentive authority 
provided by the Congress and this subcommittee, Bonneville initiated a 
13 percent rate reduction for its preference customers for the 5 year 
period through fiscal year 2001.
    To achieve the rate reduction, Bonneville produced new, unbundled 
products and negotiated power sales contracts with its Northwest 
preference customers and ten direct service industries. The new 
contracts provide a high degree of assurance that Bonneville can cover 
its costs through fiscal year 2001 while enabling customers that wanted 
to diversify suppliers to do so. A higher proportion of contracts is 
now take-or-pay, reducing the risk of underrecovery of costs. This 
ability to stabilize our customer load will provide Bonneville with 
additional time to meet anticipated future changes in the electric 
power industry and help assure our ability to meet Bonneville's 
Treasury payment obligations. Our goal has been to simultaneously 
become price competitive on a long term basis, to bring enough 
stability to costs and revenues to retain customers, and to revise 
resource and marketing programs to reflect major changes in the 
agency's resource base and environmental obligations.
    As part of its drive to remain competitive, Bonneville has 
continued to implement stringent budget and FTE reductions. Three major 
cost cutting efforts since early 1995 have produced total reductions 
averaging $600 million per year relative to the fiscal year 1995 
Congressional budget.
    Congress and the Administration have helped immensely by 
stabilizing and providing some certainty as to Bonneville's 
contribution to Northwest fish and wildlife restoration and mitigation. 
Bonneville, through an agreement with the Administration, has been able 
to stabilize fish and wildlife costs through fiscal year 2001. Prior to 
the agreement, fish and wildlife costs had been steadily increasing. 
Under the agreement, Bonneville will spend an average of $252 million 
each year for fish and wildlife costs, plus hydro operations called for 
under the 1995 Biological Opinions of the National Marine Fisheries 
Service and the U.S. Fish and Wildlife Service. These hydro operations 
costs for fish are expected to range from $90 to $280 million per year 
depending on water conditions. One of the elements of the 
Administration agreement was the establishment of a Bonneville Fish 
Cost Contingency Fund consisting of credits to be used by Bonneville 
against fish and wildlife costs under certain conditions. Bonneville 
has certified to the Treasury, without objection, that the amount of 
available, unused credits is $325.2 million.
    Bonneville has, in addition to these cost management efforts, 
reinvented its conservation program. Bonneville is transitioning from 
centralized, Bonneville-funded programs. Bonneville is now moving to 
new customer-driven approaches with a focus on market transformation 
activities. Cost effective energy efficiency services are being 
developed to meet the needs of our customers and to create business 
opportunities for the private sector in the Pacific Northwest.
    Congress, in the Energy and Water Development Appropriations Act of 
1996, provided Bonneville with additional flexibility to market excess 
federal power and thus increase revenues and improve its competitive 
position. The authority allows Bonneville to sell ``Excess Federal 
Power'' both in and out of the Pacific Northwest without the 
restrictions that would apply in the absence of this legislation. 
Excess Federal Power is federal power that is made surplus to the needs 
of Bonneville's customers in the Region as a result of the reduction in 
firm purchases by regional customers or by operating the hydrosystem 
for the benefit of fish and wildlife.
    The 1996 Appropriations Act also provided the Bonneville 
Administrator with authority to offer employees voluntary separation 
incentives, or VSI's, not to exceed $25,000, through the year 2000. 
This VSI authority provided the Administrator with additional 
flexibility to control costs and restructure Bonneville to meet 
competitive conditions.
    The Congress also enacted language to maintain the residential 
exchange program through fiscal year 1997 while providing Conference 
Report language stating that, consistent with the Regional Review, 
Bonneville and its customers should work together to gradually phase 
out the residential exchange by October 1, 2001. To date, we have 
reached phase-out agreements with all publicly-owned utilities that 
have participated in the exchange program. In January, 1997, we reached 
a phase-out agreement with one investor-owned utility and we are 
currently in the process of finalizing a phase-out agreement with 
another.
    Bonneville has, through implementation of these measures been able 
to reduce its rates and hold them level through fiscal year 2001. These 
efforts reflect a continuing effort on the part of Bonneville to reduce 
costs to assure competitive electric rates, thereby protecting the 
investment of the Federal taxpayer in the Federal hydroelectric system 
in the Pacific Northwest and to better ensure our ability to deliver 
public benefits to the region.
                       looking toward the future
    Beyond 2001, the market is expected to continue to be highly 
competitive and dynamic. Bonneville will need to be able to meet the 
market and be competitive.
    Fish costs remain uncertain after 2001 when the fish agreement 
ends. Steps will have to be taken to continue to manage these costs in 
an environment that will continue to be competitive and dynamic.
    Bonneville was able to negotiate take or pay power sales contracts 
with many of its public preference and direct service industrial 
customers. These contracts enabled Bonneville to stabilize its revenues 
through fiscal year 2001 while providing some load diversity desired by 
our customers. We were able to do this because we cut our costs and 
reduced our rates to remain competitive.
    These contractual commitments have provided the time needed by the 
region, the Administration, and the Congress to review and take 
appropriate actions to assist Bonneville to meet continuing market 
challenges. We must understand that while we do have some time to 
address these challenges, after fiscal year 2001 over 75 percent of 
Bonneville load will become available to the competitive marketplace as 
power sales contrasts expires.
    Prior to fiscal year 2002, Bonneville will need a successful power 
sales process in conjunction with continued cost management and 
operational efficiencies in order to maintain a commercially successful 
business with stable revenues and a strong ability to meet its Treasury 
payment obligations. Bonneville is working aggressively to control 
costs and achieve our target of wholesale electric power rates of 2 
cents and flat transmission rates in the year 2000.
    The combination of scheduled reductions in Bonneville sales to its 
Northwest customers, pressures to reduce its costs, electricity 
restructuring issues, and fish and wildlife mitigation issues make the 
next five years critical for Bonneville. Decisions about Bonneville 
power and transmission will impact the Pacific Northwest economy, 
funding for environmental protection, and repayment of the Federal 
investment.
          comprehensive review of the northwest energy system
    The Northwest governors, in response to the many changes and 
challenges facing the Northwest, initiated a year-long Comprehensive 
Review of the Northwest Energy System. This Regional Review served as a 
forum for discussion about the restructuring of the electric utility 
industry and what it will mean to the Pacific Northwest.
    A final report was released in December 1996. The report included 
recommendations to: legally separate Bonneville into power marketing 
and transmission agencies; create a FERC-regulated independent grid 
operator that would include transmission facilities owned by 
Bonneville; sell federal power by subscription in tiers of eligibility 
for terms of 5 to 20 years; allow Bonneville to be free to charge a 
market price for its power to the extent regional entities do not 
either purchase power on a long-term basis or pay option fees; continue 
public and regional preference for federal power; allocate to Treasury 
some share of savings when Bonneville power is below market; invest 
approximately $210 million in public benefits; defer to state and local 
levels the determination of how to collect money for public benefits; 
allow retail customers to choose their own electricity supplier by July 
1999; leave implementation of customer choice at the retail level to 
the states, and ask the governors to initiate discussions to resolve 
river governance issues.
    To ensure public accountability, regional acceptance and prompt 
implementation, the governors appointed a transition board that will 
remain in place until the recommendations of the Review are 
implemented, or until the year 2001, whichever is sooner. The board has 
prepared a strategic plan which was submitted to the governors in 
February, 1997. The strategic plan includes recommendations for 
implementing the Regional Review's report.
    Bonneville is working with the governors' representatives, the 
Northwest delegation, and the Administration to assess the feasibility 
of implementing these recommendations. The Administration is currently 
in the process of reviewing the recommendations.
                      bonneville treasury payments
    As a fundamental aspect of Bonneville's efforts to remain 
competitive, Bonneville takes seriously this Committee's direction that 
Bonneville make its planned payments to the U.S. Treasury in full and 
on time. I am pleased to report that last year we made our annual 
payment to the Treasury of more than $800 million on time and in full. 
This is the thirteenth consecutive year that Bonneville has made its 
payments on time and in full. Bonneville's ability to make the Treasury 
payment was ensured, in part, by implementation of stringent cost 
cutting measures and stabilization of Bonneville's fish and wildlife 
costs through the Administration's agreement. In spite of the 
challenges we continue to face, Bonneville anticipates being able to 
make its fiscal year 1997 Treasury payment of $791 million in full and 
on time.
    Since 1937, when it was created, through fiscal year 1996, 
Bonneville has returned $13.3 billion to the U.S. Treasury in interest, 
amortization, and operations and maintenance of the Federal facilities 
of the Federal Columbia River Power System. During fiscal year 1997, we 
anticipate paying $791 million to the Treasury, of which $205 million 
will be applied to repayment of the principal on debt, $454 million 
will be interest, and the balance of $132 million will reimburse the 
Treasury for appropriations provided to the Army Corps of Engineers and 
the Bureau of Reclamation for the power portion of annual hydroelectric 
facilities operation and maintenance expenses and Bureau of Reclamation 
irrigation assistance. Starting in fiscal year 1997, with $41 million, 
Bonneville will directly fund the power portion of Bureau of 
Reclamation power operations and maintenance expenses.
                    fiscal year 1998 budget overview
    Bonneville's fiscal year 1998 budget has been prepared on the basis 
of its three major areas of activity; power, transmission, and 
conservation and energy efficiency services. This new structure 
supports Bonneville's reorganization undertaken to become more 
competitive in the rapid restructuring of the deregulated wholesale 
electric energy market, and evidences its commitment to implement 
FERC's functional separation and standards of conduct requirements.
    This budget incorporates and reflects Bonneville's continuing 
efforts since the fiscal year 1995 Congressional budget submission to 
cut costs, increase efficiencies, realign its operations, and remain 
competitive. The budget is consistent with the rate decisions made by 
the Administrator in July 1996, and approved on an interim basis by the 
Federal Energy Regulatory Commission in September 1996. The budget also 
reflects Bonneville's effort to extend the use of its total borrowing 
authority of $3.75 billion. Under this budget, the total borrowing 
authority limit is not expected to be reached until after fiscal year 
2001.
    Since its activities are funded by sales of power, transmission, 
energy efficiency services, and proceeds of bond sales to the Treasury, 
Bonneville does not request or receive annual appropriations. 
Bonneville's fiscal year 1998 budget estimates total obligations of 
$3,239 million and capital transfers/debt reduction of $228 million. 
Total obligations include $2,986 million in operating expense 
obligations and $253 million in capital obligations.
    The following table provides detail for fiscal years 1996 through 
1998:

                                            [In millions of dollars]                                            
----------------------------------------------------------------------------------------------------------------
                                                                                  Fiscal year                   
                                                              --------------------------------------------------
                                                                 1996 actuals    1997 estimates   1998 estimates
----------------------------------------------------------------------------------------------------------------
Capital investments:                                                                                            
    Power business line......................................              25               20               13 
    Transmission services....................................             115              175              171 
    Conservation and energy efficiency \1\...................             (17)              47               33 
    Fish and wildlife........................................              31               27               27 
    Capital equipment........................................               7                8                9 
                                                              --------------------------------------------------
      Subtotal capital investments...........................             161              277              253 
                                                              ==================================================
Borrowing authority:                                                                                            
    To finance capital obligations...........................             161              277              253 
    To finance other obligations \2\.........................             (87)             (86)             (66)
                                                              --------------------------------------------------
      Total borrowing authority..............................              74              191              187 
                                                              ==================================================
Total operating expenses.....................................           2,902        \3\ 1,989    \4\ \5\ 2,986 
Capital transfers............................................             268              205              228 
                                                              --------------------------------------------------
      Bonneville total.......................................           3,244            2,384            3,401 
----------------------------------------------------------------------------------------------------------------
\1\ In conjunction with the termination of various conservation programs and changes in project workplans,      
  Bonneville has deobligated several conservation projects resuming in a negative obligation balance in fiscal  
  year 1996. During fiscal year 1996, about $39 million was obligated and about $56 million was deobligated     
  resuming in a net balance of $17 million.                                                                     
\2\ Borrowing authority to finance other obligations represents the use of or the building up of deferred       
  borrowing.                                                                                                    
\3\ Fiscal year 1997 Expensed Obligations reflect Energy and Water Development Appropriations Act, Public Law   
  104-46, which establishes residential exchange costs at $145 million. All other fiscal years reflect gross    
  exchange costs that are partially offset by exchange revenues.                                                
\4\ Starting in fiscal year 1998, Bonneville's budget assumes that Bonneville will begin to cover the full      
  unfunded liability of the Civil Service Retirement System and Post-Retirement benefits of both Civil Service  
  and Federal employees. Cost recovery is assumed to be phased in over a ten-year period of time given that     
  wholesale power and transmission rates for Bonneville are contractually frozen until the end of fiscal year   
  2001 in order to meet competitive market pressures. The fiscal year 1998 amount is $2.2 million.              
\5\ The fiscal year 1998 budget estimates that Bonneville will receive a $60 million 4(h)(10)(C) credit against 
  its Treasury repayment responsibilities for fiscal year 1998. This credit is consistent with the              
  Administration's agreement with Bonneville under section 4(h)(10)(C) of the Regional Power Act (Public Law 96-
  501).                                                                                                         

                               conclusion
    Again, Mr. Chairman, we have been faced with substantial 
challenges. I believe we have taken appropriate actions and through 
these efforts we have gained some valuable time to reflect and to be 
able to take future actions to assure that Bonneville remains 
competitive. These actions will help assure that we continue to provide 
competitive electric rates and protect the investment of the Federal 
taxpayer in the Federal hydroelectric system in the Pacific Northwest. 
This budget reflects our continuing efforts to achieve these goals. Mr. 
Chairman, that completes my testimony. I would be happy to answer any 
questions you might have.

                 STATEMENT OF BRIG. GEN. ROBERT GRIFFIN

    Senator Gorton. General Griffin, we are pleased to have you 
here today. You may proceed.
    General Griffin. I am Gen. Robert Griffin. I am the 
Commander of the newly formed Northwestern Division. It came 
into being on the 1st of April of this year as a result of the 
1997 Energy and Water Development Act which directed the Corps 
to reduce the division structure to between six and eight 
divisions. The Northwestern Division combines the North Pacific 
Division, sir, that you are probably most familiar with, you 
and Senator Craig, and the Missouri River Division. What I want 
to let you know is I will operate out of two regional offices, 
one in Portland and one in Omaha. And so we are going to have 
that regional focus both in the Pacific Northwest and in the 
Missouri River region, and that will not be lost. I do lose 
Alaska, but I retain the districts of Walla Walla, Portland, 
Seattle, Omaha, and Kansas City.
    I appreciate the opportunity to appear before you today to 
answer any questions you may have, and, sir, I got your letter 
of March 28, and you had a number of questions in there. I have 
submitted written testimony for the record that hits on every 
one of those points that you raised. What I did want to do, 
though, was highlight a couple of, I believe, the more 
important issues that you probably want to hear in my opening 
statement, and that is the BPA direct funding of Corps 
hydropower activities, and also the drawdown studies on the 
lower Snake River and John Day Reservoir.

                direct funding of hydropower activities

    Sir, regarding the direct funding of hydropower activities, 
the Corps does support direct funding of BPA's hydropower 
mission. That is our bottom line. I think our position is best 
described in the Assistant Secretary of the Army for Civil 
Works, Martin Lancaster, letter to the Deputy Secretary of 
Energy dated the 24th of December, and in it he said we are 
working on an expanded MOA for direct funding, and that MOA 
would cover nonroutine major maintenance and major rehab costs 
which could be in the $40 to $60 million a year range. That is 
what we could be operating at in direct funding.
    The principal concern with the proposed MOA, as given to us 
by Mr. Curtis, the Deputy in DOE, has to do with funding of our 
routine or baseline maintenance. We believe the Army has a need 
to control daily operations of the Corps projects for many 
purposes beyond hydropower that these projects serve. That is 
kind of the bottom line.
    We believe that an adequate source of funding is central to 
the Corps' ability to function, and, therefore, according to 
Mr. Lancaster, it may be appropriate for baseline O&M costs to 
continue as an annual appropriation for which BPA reimburses 
the Treasury.
    Sir, we do understand, however, that increased direct 
funding by BPA could represent discretionary appropriations 
savings in the 1998 Energy and Water appropriations bill, and, 
because of that, we had been waiting on a response to Secretary 
Lancaster's letter with a revised MOA, and just yesterday we 
received a letter from Mr. Curtis, Deputy at DOE, responding to 
our concerns, and the bottom line is this, sir, we are down to 
this one direct funding issue on routine O&M maintenance, and 
with this letter back I believe now that we can start working 
out an agreement.

                   lower snake river drawdown studies

    Sir, on the Snake River feasibility study, as you know, we 
are conducting the drawdown study of four dams on the lower 
Snake River. It is being conducted in accordance with the March 
1995 announced biological opinion on hydropower operation. It 
is a detailed engineering, social, economic, and biological 
analysis. The draft report and the environmental impact 
statement that go with it will be published in draft form in 
the spring of 1999.
    Senator Gorton. Let me just interrupt you there to 
emphasize that this study is not just the study of the impact 
on fish, but it is including as broad a set of social, 
economic, and cultural costs in other respects as is possible 
for you to come up with?
    General Griffin. An emphatic yes, sir.
    Senator Gorton. Go ahead.
    General Griffin. Sir, the final report and EIS are due in 
December 1999. And, sir, we do understand another point that 
you raised was how would we do our regional interface, and 
realizing the importance of this, because of the way we do this 
feasibility study and EIS process, we will be very involved 
with the region. We will hold many public meetings and 
workshops, and they will be conducted for the public interest 
groups, State and Federal agencies, native American tribes, 
and, as important, the scientific groups.
    Sir, we will also communicate through our existing 
workshops that are associated with NMFS regional forum process. 
Sir, I point out one thing, that one of the scientific groups, 
an economic study group that has also been formed that is going 
to feed in economic data and impacts of the drawdown of the 
lower Snake dams.

                      john day reservoir drawdown

    Sir, on the proposed John Day Reservoir drawdown, as you 
may know, we have already done a reconnaissance level study on 
the minimum operating pool, or MOP, for John Day drawdown, and 
I know that was one of the concerns--will we look at MOP any 
further. With the data we have, we will not. We have enough 
data on that.
    Now, the evaluation work that we were doing was suspended 
in accordance with direction provided in the conference report 
accompanying the 1996 appropriations, pending scientific 
justification. NMFS provided that scientific justification in 
December, and Secretary Lancaster transmitted our request, 
then, for funds with the scientific justification on February 
25. The Energy and Water Subcommittees in the House and the 
Senate are presently considering our request to reprogram $1.5 
million this fiscal year, and we are also asking for $3.2 
million for next fiscal year. However, sir, until funding is 
approved, this letter gets approved, a scope and the cost and 
the schedule cannot be defined.
    Sir, and one final point, and I think this is one I know 
you raised and are very concerned about, regarding 
implementations of drawdown in both John Day and the lower 
Snake River. Sir, we believe we do not have authorization to 
proceed without additional statutory authority because of the 
expected significant impacts on the various project purposes. 
So we are going to have to come back for reauthorization to 
implement any study finding that we may have in either 
location.

                           prepared statement

    Senator Gorton. I am delighted to hear that.
    General Griffin. Sir, that concludes my remarks.
    [The statement follows:]

            Prepared Statement of Brig. Gen. Robert Griffin

    Mr. Chairman, Committee members, and distinguished guests, I am 
Robert Griffin, Commander of the recently formed Northwestern Division. 
The Northwestern Division was designated on April 1, 1997, as part of a 
larger division restructuring plan in response to Public Law 104-206, 
Energy and Water Development Act, 1997, which directs the Corps of 
Engineers to reduce the number of its Divisions. The Northwestern 
Division, which retains the districts supporting the Columbia River, 
was formed from the North Pacific Division and the Missouri River 
Division, with headquarters located in Portland, Oregon and Omaha, 
Nebraska.
    I appreciate the opportunity to present the views of the Corps of 
Engineers and the Department of the Army for the record on this hearing 
about Bonneville Power Administration's fiscal year 1998 budget and 
financial status, Corps of Engineers activities, and other issues. This 
statement addresses the topics and specific questions identified in 
your March 28, 1997 letter to me.
                             direct funding
    The Army generally supports, with the qualifications noted below, 
direct funding by the Bonneville Power Administration for power 
operations and investments at Corps dams. As a matter of fact, there is 
in place an agreement between the Army and BPA entered into under the 
authority of Section 2406 of the National Energy Policy Act of 1972, 
providing for BPA funding of capital improvements. We have been working 
very hard to expand the scope of the existing agreement and, in this 
regard, the Assistant Secretary of the Army (Civil Works) wrote a 
letter, on February 24, 1997, to the Department of Energy enclosing a 
proposal for modifying the existing agreement to achieve that end. I am 
attaching a copy of our proposal to the Department of Energy. Before I 
discuss our views on the appropriate scope and context for such an 
agreement, I will review some of the activities we have funded and 
expect to fund under provisions of Section 2406.
    Since January 1995 we have used BPA direct funds to carry out $8.1 
million of non-routine operation and maintenance activities for power 
facilities. These activities include generator repair, studies, turbine 
improvements, and generator exciter replacements. We reached an 
agreement last week with BPA to fund the emergency repair of Ice Harbor 
unit 5. We have also submitted a draft proposal to BPA for direct 
funding of the emergency repair of a program of electrical system 
reliability improvements. The reliability improvements are the 
necessary corrective actions in response to the July 2-3 and August 10, 
1996 West Coast electrical system disturbances. We are also in the 
process of developing a proposal for the direct funding of an enhanced 
non-routine maintenance program at the Ice Harbor project. The purpose 
of the enhanced non-routine maintenance program would be to ensure a 
high level of generator reliability during the fish passage season by 
having pre-positioned parts and contracts available, on-line equipment 
condition monitoring, as well as ``just in time'' maintenance being 
performed. This would differ from the traditional Corps practice of 
preventative maintenance done on a predetermined schedule and repair of 
failures as they occur.
    As I indicated, we are working within the Administration to develop 
an expanded agreement for direct funding. We hope to conclude the 
agreement in the near future which would potentially enable the 
Committee to realize discretionary appropriations savings in the fiscal 
year 1998 Energy and Water Appropriations bill. Without prejudice to 
the on-going discussions, I offer the following information on our 
views of the proposed agreement to give the Committee insight into the 
issues being addressed.
    The Department of the Army is concerned about modeling an agreement 
after the one that the Department of Energy has with the Bureau of 
Reclamation. That agreement with the Bureau is similar to an agreement 
which has been proposed by BPA to the Army. The Army has provided 
comments to the Department of Energy on the proposed Direct Funding 
Agreement for Operations and Maintenance Power Costs between Bonneville 
Power Administration and the Department of the Army. Our principal 
concerns involve the BPA proposal to directly fund all operations and 
maintenance (O&M) costs, a proposal for binding arbitration, and a 
proposal for monetary performance incentives.
    The most important issue for the Army is the need to control the 
daily operations of Corps projects for the many purposes, beyond 
hydropower, that these projects serve. An adequate source of funding is 
central to the Corps' ability to function. Thus, we believe it is 
appropriate for baseline O&M costs to continue as annual appropriations 
for which BPA reimburses the Treasury. Baseline O&M costs are also 
called ``routine'' costs, and they include personnel costs, small 
supplies and materials, custodial contracts, and costs associated with 
the routine, day-to-day operations and maintenance of the reservoir 
systems. While the Army is unprepared, at this point, for BPA to 
directly fund baseline O&M, there are numerous opportunities to use 
direct funding from BPA. For example, costs for major rehabilitation 
projects, and non-routine maintenance are two large categories of 
expenditures that are available for direct funding. Those costs, 
exclusive of the costs of projects currently directly funded under an 
existing BPA-Army agreement, would range from $40 to $60 million 
annually.
    A second concern involves the provision for binding arbitration. 
The draft agreement proposal to subject the agencies to binding 
arbitration in the event of any unresolved disagreement is an 
unnecessary step and may inappropriately limit the Corps' authority to 
maintain and operate its projects as required by law. While the Army 
supports the use of alternate dispute resolution, final resolution of 
agency disputes, where the Corps discretionary authority is not an 
issue, should rest with either the Office of Management and Budget or 
the Department of Justice, as provided in the existing BPA-Army 
agreement, rather than with a non-Federal, private individual.
    Last, the BPA proposal to provide monetary incentives for 
performance is of concern. We share BPA's desire to ensure satisfactory 
hydropower performance, but believe there may be better means of 
achieving this goal.
    We have provided these comments to BPA and have been meeting to 
discuss resolution and presently await BPA's response to our comments 
dated February 24, 1997.
        non-federal party construction on federal hydro projects
    All costs associated with development of hydroelectric power at the 
site of a Corps project are borne, one way or another, by non-Federal 
sponsors. The following remarks are in regard to the status of non-
Federal hydropower development and Corps dams in the Columbia River 
basin.
    Northern Wasco County PUD has developed a hydro-electric project 
through the FERC process at The Dalles Dam. The 8.5 MW project was 
completed in 1993 at a cost of about $15 million. The project generates 
power from flows used as part of the fish bypass facility. The PUD is 
also constructing a FERC licensed 10 MW project at McNary Dam. This 
project is scheduled for completion later in 1997.
    We are aware of some specific proposals for non-Federal development 
of hydropower projects at Corps facilities in the region. Idaho Water 
Resources Board has a FERC license to construct and operate a 2.5 MW 
small hydropower project at Dworshak Dam. The project would generate 
power from releases/flows that are conveyed by pipelines to the 
Clearwater Fish Hatchery and the Dworshak National Fish Hatchery. The 
cost to provide the power is estimated at 21.5 mill/kwh. FERC has 
determined that with appropriate environmental protective measures, 
that the project would not ``significantly affect the quality of the 
human environment''.
    Utah Associated Municipal Power Systems proposes to add generating 
capability onto the existing Corps powerhouse at Dworshak Dam, and 
install one generating unit with a 40 MW capacity. They are working 
through FERC to obtain a preliminary permit. A preliminary permit does 
not authorize construction, but allows for additional studies, such as 
economic, engineering plans, and environmental.
    The Corps of Engineers and Colville Confederated Tribes (CCT) are 
currently conducting feasibility studies to determine the potential 
Federal interest in raising the Chief Joe Dam pool by 2 to 4 feet for 
the purpose of providing additional power generation. In addition, the 
CCT has expressed an interest in upgrading the turbine components of 
the existing units 1-16 to increase generation and capacity. This is 
currently an active study, and no conclusions have been reached in 
regard to environmental effects or energy production costs. There are 
no situations in the region in which Federal facilities have been 
upgraded by non-federal parties.
                   lower snake and john day drawdown
    The Corps, in cooperation with other Federal and regional interests 
and the public, is presently carrying out a feasibility study of 
natural river level drawdown at the four Lower Snake River dams. This 
detailed engineering, biological, social and economic analysis is 
scheduled to be completed in 1999 as called for in the National Marine 
Fisheries Service March 1995 biological opinion on hydropower 
operations and will be the basis for regional, Federal and potentially 
Congressional decisions on whether drawdowns should be implemented. An 
Environmental Impact Statement will be prepared with the feasibility 
study. In fiscal years 1993-95 the Corps was proceeding with advanced 
planning and design to implement mitigation for a drawdown to minimum 
operating pool (MOP) at John Day dam as called for in the biological 
opinion. No evaluations of drawdown below MOP at John Day have been 
conducted to date. In response to Conference Report language (House 
Report No. 104-293) accompanying Public Law 104-46, Energy and Water 
Development Appropriations Act, 1996, this work was suspended pending 
development of further scientific justification of drawdown as a 
recovery measure. This justification with request for concurrence in 
funds reprogramming to begin evaluation of drawdown was sent to the 
Energy and Water Development subcommittees by letter of February 25, 
1997 from Assistant Secretary Lancaster. The subcommittees are 
presently considering our request for concurrence in funds 
reprogramming for the Corps to begin further evaluation in fiscal year 
1997. We have also requested funding to continue this work in fiscal 
year 1998.
    In the Lower Snake River Juvenile Salmon Migration Feasibility 
Study the only drawdown option continuing to be evaluated by the Corps 
is the permanent natural river alternative. Mid-level drawdowns have 
been eliminated from consideration due to biological risk factors for 
salmon and implementation cost. In general, implementation actions for 
natural river would include the total removal of the earthen embankment 
section which exists at each lower Snake River project along with some 
additional channel development and expansion. Under this alternative, 
the existing powerhouses, spillways and navigation locks would remain 
in place and would require some type of protection. Those remaining 
structures would be decommissioned and essentially mothballed. 
Implementation cost for modifications at the four dams is estimated at 
$530 million on a preliminary basis. That cost does not reflect 
mitigation measures along the reservoirs, nor other economic and social 
costs.
Drawdown impacts
    The implementation of drawdown on the lower Snake River will 
radically change or eliminate the current multi-purpose uses of the 
lower Snake River. Those changes have been addressed in previous 
reports such as the System Configuration Study Phase I, the Columbia 
River System Operation Review (SOR), and most recently in the Corps 
Lower Snake River Juvenile Salmon Migration Feasibility Study Interim 
Report published in December 1996, A summary of potential impacts 
follows:
    Irrigation.--A 1991 inventory of the lower Snake River Projects 
identified a total of 31 water withdrawal facilities on the four lower 
Snake River Projects. All of these facilities would be rendered 
unusable without significant modifications.
    Navigation.--All commercial navigation on the lower Snake River 
from its confluence with the Columbia River, to Lewiston, Idaho would 
be eliminated.
    Fish passage.--Qualitative and quantitative information relative to 
anadromous fish benefits associated with a natural river operation is 
very limited. The issue of the effects of juvenile fish transportation 
versus in-river migration is at the very root of the regional debate. 
With this in mind, it is fair to say that a natural river condition 
will provide better in-river conditions than currently exist for both 
juvenile and adult salmon migration. Juvenile travel times will be 
significantly reduced and current dam passage mortality would likely be 
eliminated. Predator prey relationships are not well understood, but a 
reduction in predation may be possible. Not considered in these 
assumptions are the fish impacts that may occur associated with 
construction activities and near-term environmental disruptions 
following construction. What cannot be determined with high confidence 
at this point is the expected increased survival for both juveniles and 
adults out of the Snake River and what contribution that would make to 
the overall salmon recovery effort.
    Power operations.--Power production from the four lower Snake River 
Projects will be eliminated. The four Lower Snake River projects 
produce approximately 10 million megawatt hours of electricity on an 
average annual basis.
    Recreation.--The net impacts on recreation are not clearly 
understood at this point. Obviously the type of recreation experience 
that the projects currently provide and the existing facilities on 
these projects will be significantly changed or eliminated. However, 
these perceived lost opportunities are likely to be replaced by a 
different type of recreation experience. What overall impact that these 
changes will have on total project visitation is unknown at this time 
and are a part of the feasibility analysis.
    Flood control.--The four lower Snake River projects currently 
provide no flood control benefits, thus the implementation of natural 
river drawdown would have no adverse affect from a flood control 
standpoint.
    Other impacts.--Other potential impacts that have been recognized, 
but not clearly understood, include resident fish, water quality and 
cultural resources exposure. Additional analysis on these is under way.
    As part of the ongoing feasibility study, the Corps is engaged in a 
very intensive regional effort to accurately identify the economic 
impacts of the drawdown alternative. At this point, the best available 
information exists in SOR. Although the SOR analyses are being reviewed 
and revised, the following results from an alternative in SOR with the 
four Lower Snake River dams at year-round natural river level is 
provided for information on the relative annual economic effects among 
uses, particularly the relative magnitude of navigation to hydropower 
system impacts. Clearly, the impacts on power are the largest. The 
recreation impact will very likely be revised substantially downward in 
the current analyses. These costs do not include environmental 
mitigation, cultural resource costs or total economic impact costs. SOR 
FEIS alternative 5c economic effects summary:
                                                             Annual Cost
        Feature                                              In millions
Hydro Power.......................................................   132
Recreation........................................................    72
Implementation/Construction.......................................    45
Navigation........................................................    30
Municipal and Industrial Water....................................     4
Irrigation........................................................     4

    Future costs for capital investments and operation and maintenance 
of the dams would be avoided with drawdown. These costs would include 
future powerhouse rehabilitation (approximately $200 million) and the 
annual O&M ($27 million per year) for the existing dams. Future fish 
passage investments at these dams would presumably be avoided with 
drawdown as well.
    No estimates of the impacts associated with drawdown to spillway 
crest at John Day have been made by the Corps of Engineers.
Drawdown evaluation process
    The Corps is currently conducting a Feasibility Study/NEPA process 
for the Lower Snake River. The objective of that study is to document 
the Federal decision for the long term operation and configuration of 
the lower Snake River projects. Integral to any NEPA process is a 
requirement to provide the general public an opportunity to understand 
the issues, alternatives, and environmental impacts, and to have a role 
in the formulation of a final decision. The Corps fully intends to 
honor that requirement throughout the study process. In conjunction 
with this study effort we will be conducting workshops and hearings 
throughout the region. We will also be providing periodic newsletters 
and special reports which will be made available to the public as well.
    Recognizing the critical importance of this issue to the region, 
the Corps will be expanding our effort and will conduct monthly 
feasibility study roundtable/workshops. The purpose of these workshops 
will be to provide technical information and status reports as well as 
to seek public input on a more frequent basis than would be available 
in a more traditional study process. These workshops are intended to be 
very informal in nature and will be conducted primarily as a discussion 
group. The meetings will be open to the general public as well as 
Federal agencies, state agencies, Indian tribes and public interest 
groups.
    Another critical component of our regional coordination commitment 
will be tribal coordination. The Corps will make every effort to keep 
the 14 northwest tribes involved and informed.
    Beyond the efforts described above, we will continue to participate 
in the regional forum addressing salmon recovery established by 
National Marine Fisheries Service. In various committees of the forum 
we provide real time status reports on work in progress as well as 
periodic expenditure information. The forum provides an opportunity for 
virtually any other Federal, state, tribe or special interest group to 
influence the scope of our work as well as the use of information and 
expenditure of funds. Successful completion of this study and the 
regional decisions that will be a product of the effort are dependent 
on close coordination and active involvement of the citizens of the 
northwest as well as the agencies and tribes that represent them.
    The current schedule for this study calls for a Draft Feasibility 
Report and Environmental Impact Statement in the spring of 1999 and a 
Final Report and EIS in December 1999. No schedule has been established 
for John Day at this time.
Legal authority for dam removal
    It is our opinion that the Corps cannot use its existing legal 
authority to remove the lower Snake projects and draw John Day to 
spillway crest. New statutory authority would be required to undertake 
these actions since the proposed actions would eliminate or 
significantly affect specific project purposes provided for in the 
authorizing legislation.
    Congress authorized these projects as part of the Columbia River 
Basin system to achieve region-wide benefits. The projects in the 
system are operated for flood control, navigation, hydroelectric power 
production, irrigation, recreation, water quality and fish and 
wildlife. The Corps constructed and operates these projects to meet 
these multiple uses. Within the authority of each project and 
consistent with the uses of the Columbia River Basin system, the Corps 
may choose to emphasize a certain project use, but it cannot not do so 
in a manner which disregards other authorized project uses. Based upon 
the analysis of the System Operation Review, drawdown of the lower 
Snake River projects would significantly affect and/or degrade the 
majority of authorized project uses. A drawdown of John Day project to 
spillway crest, based upon preliminary observations would also 
significantly affect navigation, irrigation and other project uses. 
However, a more comprehensive study regarding this proposed action is 
necessary before a definitive statement of these effects can be made.
    In addition to changes in authorization or additional 
authorization, the proposed actions would also be subject to additional 
appropriations by Congress.
John Day drawdown reprogramming request
    The reprogramming request dated February 25, 1997 from Assistant 
Secretary Lancaster to the House and Senate Subcommittees on Energy and 
Water Development does not specify the scope of technical studies nor 
drawdown levels that would be evaluated. Rather, it notes that the 
scope will be developed in coordination with the region upon 
concurrence of the committees. In view of the previous analysis of 
drawdown to MOP conducted under the System Configuration Study and 
under advanced planning and design for MOP implementation it is not 
anticipated that additional funding is required for acquiring 
information or conducting analysis of MOP drawdown. We also understand 
that the Northwest Power Planning Council has recently recommended that 
no additional funding be allocated for further review of this 
alternative. This would be consistent with the February 25 letter.
    A cost estimate for a study limited to the social and economic 
impacts of drawing down John Day to spillway crest or natural river 
levels has not been prepared. Estimated costs would primarily be 
related to the scope of ``social and economic'' issues and level of 
detail. A study plan could be prepared in coordination with regional 
parties in approximately three months. The period of the study would 
also depend on the scope and level of detail but could likely be 
completed in one to two years. This study could be used for further 
decisions regarding additional analyses of drawdown and would identify 
future processes for compliance with all statutory requirements such as 
the National Environmental Policy Act and the Endangered Species Act. 
If carried out, the additional analyses identified by such a report 
would provide the basis of a Federal recommendation for Congressional 
authorization for drawdown implementation.
    Mr. Chairman, this concludes my testimony. I will be pleased to 
address any questions.
                                 ______
                                 

                    Letter From H. Martin Lancaster

                            Department of the Army,
            Office of the Assistant Secretary--Civil Works,
                                 Washington, DC, February 24, 1997.
Mr. Charles B. Curtis,
Deputy Secretary of Energy, Department of Energy,
Washington, DC.
    Dear Mr. Curtis: This is in further response to your letter of 
November 16, 1996, concerning your proposal to have the Bonneville 
Power Administration direct fund the cost of the operation and 
maintenance of power facilities operated by the Corps of Engineers in 
the Pacific Northwest.
    As indicated in my letter of December 24, 1996, I have a number of 
concerns with the proposed Direct Funding Agreement you provided for my 
review. As an alternative to your proposal, I am enclosing a 
modification of the existing agreement between the Army and BPA entered 
into under the authority of Section 2406 of the National Energy Policy 
Act of 1992. The existing agreement provides for BPA funding of capital 
improvements. The amended agreement would expand the scope of the 
existing agreement to include BPA funding of non-routine maintenance of 
the Corps hydropower facilities. The Corps would continue to receive 
appropriations for its routine maintenance activities. I have discussed 
the proposal with representatives of the Office of Management and 
Budget. As a result of those discussions, I am confident they will 
support the arrangement I am proposing. Upon signing the proposed 
agreement, I would expect BPA to fund about 60 percent of the Corps 
annual requirements for operations and maintenance of its power 
facilities.
    I look forward to working further with you on this proposal and 
hope we can complete this agreement in time to allow direct funding of 
our fiscal year 1998 requirements.
            Sincerely,
                                       H. Martin Lancaster,
                      Assistant Secretary of the Army--Civil Works.
                                 ______
                                 
Memorandum of Agreement Between the Bonneville Power Administration and 
                       the Department of the Army
                    article i--purpose and authority
    This Memorandum of Agreement (``MOA'') is entered into by and 
between the Department of the Army (``DA'') and the Bonneville Power 
Administration (``BPA'') (``the parties'') for the purpose of 
establishing a mutual framework governing the respective 
responsibilities of the parties regarding the development of direct 
funding for hydropower non-routine maintenance, generation additions, 
improvements, and replacements at U.S. Army Corps of Engineers 
(``USACE'') hydroelectric projects or other projects operated and 
maintained in the Pacific Northwest Region. This MOA is entered into 
pursuant to Section 2406 of the National Energy Policy Act of 1992, 
Public Law 102-486, 16 U.S.C. 839d-1, (``the Act'').
                           article ii--scope
    The DA is responsible for the planning, designing, constructing, 
rehabilitating, and operating and maintenance of twenty-one (21) 
hydroelectric projects in the Pacific Northwest Region. These 
hydroelectric projects are operated and maintained by USACE to meet 
multiple purposes of water resource development in the Pacific 
Northwest Region, including but not limited to flood control, 
navigation, electric power generation, fish and wildlife, water supply 
and water quality. The DA shall identify the funding requirement for 
hydroelectric projects and other projects which it operates and 
maintains in the Pacific Northwest which the DA has determined, 
consistent with good engineering practice, DA policy and the multiple 
uses of water resource projects to be suitable for consideration under 
Sec. 2406 of the Act. The BPA may agree to fund the DA requirement (to 
include the planning, designing, and construction) for non-routine 
maintenance, generation additions, improvements, and/or replacements at 
those projects.
    Pursuant to this MOA, the DA agrees to consult with the BPA 
regarding the priorities for non-routine maintenance, generation 
additions, improvements and replacements under Sec. 2406 of the Act to 
USACE hydroelectric projects and other projects which it operates and 
maintains in the Pacific Northwest Region and to afford to BPA the 
opportunity to review and comment on the DA's plans respecting the 
planning, designing, and constructing of generation additions, 
improvements, and replacements at USACE hydroelectric projects and 
other projects which it operates and maintains in the Pacific Northwest 
Region. The Parties agree to coordinate the development of these 
projects from the earliest possible time, but no later then 120 days 
prior to the beginning of the next fiscal year. Coordination of these 
activities must begin sufficiently in advance to meet the scheduling, 
financial planning, ratemaking, budget and program requirements of each 
Party.
    No item shall be included in the Five Year Plans, or Annual Budgets 
except as agreed to by the Parties. Any item not included in the Five 
Year Plans or Annual Budgets, may be included by the Corps in the 
appropriation portion of its budget. Nothing in this MOA shall be 
construed to require the DA to provide any goods or services to the BPA 
pursuant to Sec. 2406 of the Act, except as may be set forth in the 
Five Year Plans, Annual Budgets and Sub-agreements.
                article iii--interagency communications
    To provide for consistent and effective communication between the 
DA and the BPA, each party shall appoint a Principal Representative to 
serve as its central point of contact on matters relating to this MOA. 
Additional representatives may also be appointed to serve as points of 
contact on Five Year Plans, Annual Budgets and/or Sub-agreements. 
Working groups, mutually agreeable to the Principle Representatives, 
may be established to support the decision making process by the NPD 
Division Commander and BPA Administrator.
      article iv--five year program and annual maintenance budgets
    The DA and the BPA may conclude mutually agreed upon written Five 
Year Plans and Annual Maintenance Budgets pursuant to this MOA, 
respecting DA work the parties agree to direct fund under Sec. 2406 of 
the Act.
    A. Five Year Program--The program identifies the funding 
requirements for Corps hydropower maintenance, additions, improvements, 
and/or replacements for each of the five fiscal years in the Program. 
The initial five period covers the period fiscal year 1999 through 
fiscal year 2004. After the establishment of the initial Five Year 
Program, a revised program will be developed for a sliding five fiscal 
year window. The Five Year Program displays the direct funding level 
for each of the three NPD districts with hydropower. Exhibit A contains 
the initial Five Year Program. In addition to the direct funding 
requirements, Exhibit A also displays the routine O&M and appropriated 
multipurpose project expenses that BPA is responsible for repaying.
    B. Annual Maintenance Budget--The annual budgets identify specific 
work categories for the hydropower maintenance, additions, 
improvements, and/or replacements activities covered by this MOA, that 
are to be accomplished for each fiscal year in the Five Year Plan. 
Hydropower maintenance, additions, improvements, and/or replacements 
work items that have a funding requirement greater than $500,000 will 
be separately identified. These items will be listed as extraordinary 
maintenance, major replacements, or additions. Exhibit B contains the 
initial Annual Budget. Additional justifications may be provided, or 
sub-agreements developed from these budgets.
           article v--sub-agreements for specific work items
    The parties anticipate that there will be direct funding 
opportunities that, for reasons of timing and/or magnitude, may require 
a separate sub-agreement. The DA and the BPA may conclude mutually 
agreed upon written Sub-agreements pursuant to this MOA, respecting DA 
work the parties agree to direct fund under Sec. 2406 of the Act. The 
sub-agreement shall include the following:
  --a detailed scope of work;
  --schedules;
  --the amount of funds required and available to accomplish the scope 
        of work;
  --identification of individual project managers;
  --identification of types of contracts to be used (if known);
  --types and frequencies of reports;
  --identification of which party is to be responsible for government-
        furnished equipment, contract administration, records 
        maintenance, rights to data, software and intellectual 
        property, and contract audits;
  --procedures for amending, modifying or terminating the Sub-
        agreement; and
  --such other particulars as are necessary to describe clearly the 
        obligations of the parties with respect to the portion of the 
        DA's hydroelectric project program which BPA agrees to fund 
        under Sec. 2406 of the Act.
    Goods or services shall be provided under this Article only after 
an appropriate Sub-agreement has been signed by a representative of 
each party authorized to execute that Sub-agreement. In the case of 
conflict between this MOA and a Sub-agreement, this MOA shall control.
              article vi--responsibilities of the parties
    A. Responsibilities of the Department of the Army
                [order of following paragraphs revised]
    The DA shall determine the need for maintenance and construction of 
generation additions, improvements, and/or replacements opportunities 
at any hydroelectric projects and other projects operated and 
maintained by USACE.
    The DA shall notify the BPA of funding requirements for non-routine 
maintenance, additions, improvements, and/or replacements that the DA 
deems appropriate under Sec. 2406 at any hydroelectric projects and 
other projects operated and maintained by the USACE within the Pacific 
Northwest region.
    The DA shall develop draft Five Year Plans, Annual Budgets and Sub-
agreements to include mutually agreed upon scopes of work. The North 
Pacific Division Commander is the authorized signatory for each Five 
Year Plan, Annual Budget and/or Sub-agreement.
    The DA shall plan, design and construct, at BPA expense, such 
maintenance requirements, additions, improvements, and/or replacements 
as the DA and the BPA may agree upon in Five Year Plans, Annual Budgets 
or Sub-agreements. The DA shall construct, operate, and maintain such 
additions, improvements, and/or replacements in accordance with the 
purpose, terms, and conditions of this MOA, consistent with project 
uses of the water resources development projects.
    The DA shall provide detailed periodic progress, financial and 
other reports to the BPA as agreed to in the Five Year Plans, Annual 
Budgets and Sub-agreements. Financial reports shall include information 
on all funds received, obligated, and expended, and on forecast 
obligations and expenditures.
    B. Responsibilities of the Bonneville Power Administration
    The BPA shall pay all costs associated with the DA's provisions of 
goods or services under agreed upon Five Year Plans, Annual Budgets or 
Sub-agreements pursuant to this MOA and shall transfer to the DA, in 
the manner as specified in Article VII, the funds necessary to 
accomplish the Five Year Plans, Annual Budgets or Sub-agreement.
    The BPA shall ensure that only authorized BPA officials sign Five 
Year Plans, Annual Budgets and/or Sub-agreements.
                          article vii--funding
    The BPA shall pay all costs, including overhead charges, on 
maintenance requirements, addition, replacement or improvement work 
pursuant to mutually agreed upon Five Year Program, Annual Budgets and 
Sub-agreements entered into under this MOA. The cost of overhead 
charges shall be determined in accordance with USACE policy and with 
General Accounting Office (``GAO'') principles and standards. The Five 
Year Program, Annual Budgets and Sub-agreements shall establish the 
scope of work to be accomplished and the funding requirements for each 
work item and project agreed to thereunder.
    The BPA shall obligate one-hundred percent (100 percent) of the 
annual funding requirements of each Sub-agreement upon signature of the 
Sub-Agreement and at the beginning of each fiscal year for the Annual 
Budgets. This obligation sets aside funds as budgetary resources for 
the USACE and certifies the availability of funds to the USACE, but 
does not transfer any of BPA's repayment responsibilities to the DA or 
the USACE. By means of each Sub-agreement and Annual Budget, BPA enters 
into a binding agreement that obligates BPA to fund all costs 
associated with the Sub-agreement and Annual Budget and guarantees the 
availability of funds to the USACE for work specified in the Sub-
agreement and Annual Budget, subject only to the provisions of ARTICLE 
XIV if the Sub-agreement is terminated pursuant to that Article.
    The Annual Budgets and any Sub-agreement are the authorizing 
documents which the USACE is authorized to obligate against and 
fulfills the same functions as an SF 1151, Non-Expenditure Transfer 
Authorization. Mutually agreed upon Five Year Plans, Annual Budgets and 
Sub-agreements shall be forwarded to Headquarters, USACE (``HQUSACE''), 
ATTN: CERM-FC, Washington, DC 20314-1000. HQUSACE shall make an 
apportionment to the performing USACE District based on the Annual 
Budgets and Sub-agreement.
    Cash transfers to cover USACE disbursements shall be made from the 
BPA Fund to the USACE. A bill submitted for payment for work 
accomplished pursuant to a Sub-agreement and Annual Budget is not 
subject to audit or certification in advance of payment. The U.S. 
Treasury's On-line Payment and Collection System (``OPAC''), or a 
mutually agreeable alternative, will be used to accomplish the 
necessary cash transfer from the BPA Fund.
    The BPA Fund is established pursuant to 16 U.S.C. Sec. 838i and 
consists of, inter alia, all proceeds derived from the sale of bonds, 
notes and other evidences of indebtedness, all receipts, collections 
and recoveries of the BPA, and any Congressional appropriations made to 
the BPA. The BPA Administrator is authorized to make expenditures out 
of the BPA Fund for authorized purposes, such as funding work proposed 
pursuant to Sec. 2406 of the Act, provided such program expenditures 
have been submitted to Congress in BPA's budget.
    If the USACE forecasts that its actual costs under a Sub-agreement 
or Annual Budget will exceed the amount of funds available for 
obligation under that Sub-agreement or Annual Budget, it shall promptly 
notify the BPA of the amount of additional funds necessary to complete 
the work under that Sub-agreement or Annual Budget. The BPA shall 
either obligate to the amended Sub-Agreement or Annual Budget necessary 
funds, or require that the scope of work be limited to that which can 
be paid for by the then-available funds, or direct termination of the 
work under a Sub-agreement.
    Both parties agree to provide each other all pertinent power 
related financial information, including but not limited to: estimated 
OPAC fund transfers and other financial transactions, accounting 
records, underlying assumptions, methodology, and data as needed to 
assist their respective efforts.
                     article viii--applicable laws
    This MOA and all documents and actions pursuant to it shall be 
governed by the applicable statutes, regulations, directives, and 
procedures of the United States. Unless otherwise required by law, all 
contract work with third parties undertaken by the DA shall be governed 
by DA policies and procedures.
                article ix--contract claims and disputes
    All claims and disputes by contractors arising under or relating to 
contracts awarded by the DA shall be resolved in accordance with 
federal law and the terms of the individual contract. The DA shall have 
dispute resolution authority for these claims. Any contracting 
officer's final decision may be appealed by the contractor pursuant to 
the Contract Disputes Act of 1978 (41 U.S.C. Sec. Sec. 601-613). The 
U.S. Army Corps of Engineers Board of Contract Appeals (``ENG BCA'') is 
designated as the appropriate board of contract appeals. In lieu of 
appealing to the ENG BCA, the contractor may bring an action directly 
to the United States Court of Federal Claims.
    The DA shall be responsible for handling all contractor disputes 
and administrative appeals, and for coordinating with the Department of 
Justice if the dispute goes to Court. The DA shall notify the BPA of 
any such dispute and afford the BPA an opportunity to provide comments 
on any documents prepared regarding the dispute, including pleadings in 
the litigation and any resulting settlement documents. The DA shall 
also provide BPA an opportunity to participate in the dispute and any 
resulting litigation and settlement negotiations.
                     article x--dispute resolution
    The parties agree that, in the event of a dispute between the 
parties under this MOA or a Five Year Plan, Annual Budget or Sub-
agreement made pursuant to this MOA, the BPA and the DA shall use their 
best efforts to resolve that dispute in an informal fashion through 
consultation and communication, or other forms of non-binding 
alternative dispute resolution mutually acceptable to the parties. The 
parties agree that, in the event such measures fail to resolve the 
dispute, they shall refer administrative and policy matters to the 
Office of Management and Budget for resolution and matters of statutory 
interpretation or dispute to the Department of Justice for resolution. 
This provision shall not apply to the decision to enter into Five Year 
Plans, Annual Budgets or a Sub-agreement or the decision to amend or 
terminate this MOA or Five Year Plans, Annual Budgets or a Sub-
agreement.
                     article xi--public information
    Justification and explanation of this MOA and the Sub-agreements or 
an Annual Budget before Congress and other agencies, departments, and 
offices of the federal Executive Branch shall be the responsibility of 
the DA and BPA. The DA and BPA may provide any assistance necessary to 
support each other's justification or explanations of the programs 
conducted under this MOA. Each party shall be responsible for its own 
testimony before Congress. The DA and BPA shall coordinate public 
announcements, except that the DA will respond to all inquiries 
relating to the ordinary procurement and contract award and 
administration process and coordinate with BPA as appropriate. The BPA 
or the DA shall make its best efforts to give the other party advance 
notice before making any public statement regarding work contemplated, 
undertaken, or completed pursuant to Sub-agreements under this MOA.
                           article xii--audit
    The DA shall maintain accounting procedures and practices 
sufficient to reflect properly all costs the DA has incurred in 
performance of work accomplished pursuant to written Sub-agreements or 
Annual Budget entered into in accordance with this MOA.
    Authorized BPA officials and other authorized representatives, 
including internal and external auditors, shall have the right to 
examine the records supporting the costs the DA incurs. This right of 
examination shall include inspection at all reasonable times at the 
DA's facilities used in performing work pursuant to written Sub-
agreements or Annual Budget entered into in accordance with this MOA, 
and at locations where records pertaining to the Sub-agreements or 
Annual Budget are maintained.
                      article xiii--miscellaneous
    A. Other Relationships or Obligations
    This MOA shall not affect any pre-existing or independent 
relationships or obligations between the BPA and the DA.
    B. Survival
    The provisions of this MOA which require performance after the 
expiration of this MOA shall remain in force notwithstanding the 
expiration of this MOA.
    C. Severability
    If any provision of this MOA is determined to be invalid or 
unenforceable, the remaining provisions shall remain in force and 
unaffected to the fullest extent permitted by law and regulation.
         article xiv--amendment, termination, and modification
    This MOA and related Five Year Programs, Annual Budgets or Sub-
agreements may be modified or amended only by written, mutual agreement 
of the parties. Either party may terminate this MOA, Five Year 
Programs, Annual Budgets or Sub-agreements by providing written notice 
to the other party. The termination shall be effective after two full 
fiscal years following notice, unless a later date is set forth. In the 
event of termination, the BPA shall continue to be responsible for all 
costs incurred by the DA under this MOA, Five Year Programs, Annual 
Budgets or Sub-agreements and for the costs of closing out or 
transferring any on-going contracts.
                        article xv--definitions
    A. Non-routine Maintenance
    These are maintenance activities that are not on a repetitive 
schedule. They include repairs and replacements of both expense and 
capital items, that may be accomplished by either hired labor or 
contract. For purposes of this agreement, it will be individual work 
items that cost less than $500,000.
    B. Major Maintenance and Replacements
    The activities in this category are similar to non-routine 
maintenance with the exception of scope and cost. Typically this work 
is of a scope that it is accomplished by contract. For purposes of this 
agreement, it will be individual work items that cost more than 
$500,000.
    C. Major Rehabilitation
    This is a comprehensive program that includes major replacements, 
improvements and additions. In the DA is an activity that is over 
$5,000,000 and requires more extensive economic and environmental 
evaluation.
                       article xv--effective date
    This MOA shall become effective when signed by both the BPA and the 
DA.

Bonneville Power Administration

________________________________________
Administrator, Bonneville
Power Administration
Date:______________________________

Department of the Army

________________________________________
Assistant Secretary of the Army (Civil Works)
Date:______________________________
                                 ______
                                 

                         NORTH PACIFIC DIVISION HYDROPOWER PROGRAM FISCAL YEAR 1999-2002                        
                                            [In thousands of dollars]                                           
----------------------------------------------------------------------------------------------------------------
                                                                              Fiscal year                       
                                                     -----------------------------------------------------------
                                                        1997      1998      1999      2000      2001      2002  
----------------------------------------------------------------------------------------------------------------
Non-Routine Maintenance.............................    33,253    40,880    39,137    39,516    39,844    40,248
Major Rehab.........................................    19,737    23,621    22,593    31,428    32,638    22,198
                                                     -----------------------------------------------------------
      Total BPA direct funded.......................    52,990    64,501    61,730    70,944    72,482    62,446
                                                     ===========================================================
Appropriation Funded Hydropower O&M.................    40,594    41,801    40,018    40,406    40,742    41,155
----------------------------------------------------------------------------------------------------------------


                NORTH PACIFIC DIVISION HYDROPOWER DIRECT FUNDING ANNUAL BUDGET--FISCAL YEAR 1999                
----------------------------------------------------------------------------------------------------------------
                                                          Additions,                                            
                                                         replacements       Major         Total     Appropriated
                                            Maintenance       and      rehabilitation     direct         O&M    
                                                         improvements                                           
----------------------------------------------------------------------------------------------------------------
BONNEVILLE................................  ...........  ............  ..............  ...........  ............
THE DALLES................................  ...........  ............  ..............  ...........  ............
JOHN DAY..................................  ...........  ............  ..............  ...........  ............
DETROIT...................................  ...........  ............  ..............  ...........  ............
BIG CLIFF.................................  ...........  ............  ..............  ...........  ............
GREEN PETER...............................  ...........  ............  ..............  ...........  ............
FOSTER....................................  ...........  ............  ..............  ...........  ............
COUGAR....................................  ...........  ............  ..............  ...........  ............
LOOKOUT POINT.............................  ...........  ............  ..............  ...........  ............
DEXTER....................................  ...........  ............  ..............  ...........  ............
HILLS CREEK...............................  ...........  ............  ..............  ...........  ............
LOST CREEK................................  ...........  ............  ..............  ...........  ............
                                           ---------------------------------------------------------------------
      TOTAL NPP...........................       XXXXXX        YYYYYY         ZZZZZZ         BBBBB      AAAAAAAA
                                           =====================================================================
MCNARY....................................  ...........  ............  ..............  ...........  ............
ICE HARBOR................................  ...........  ............  ..............  ...........  ............
LOWER MONUMENTAL..........................  ...........  ............  ..............  ...........  ............
LITTLE GOOSE..............................  ...........  ............  ..............  ...........  ............
LOWER GRANITE.............................  ...........  ............  ..............  ...........  ............
DWORSHAK..................................  ...........  ............  ..............  ...........  ............
                                           ---------------------------------------------------------------------
      TOTAL NPW...........................       XXXXXX        YYYYYY         ZZZZZZ         BBBBB      AAAAAAAA
                                           =====================================================================
CHIEF JOSEPH..............................  ...........  ............  ..............  ...........  ............
ALBENI FALLS..............................  ...........  ............  ..............  ...........  ............
LIBBY.....................................  ...........  ............  ..............  ...........  ............
                                           ---------------------------------------------------------------------
      TOTAL NPS...........................       XXXXXX        YYYYYY         ZZZZZZ         BBBBB      AAAAAAAA
                                           =====================================================================
NORTH PACIFIC.............................       39,137  ............         22,593        61,730        40,018
----------------------------------------------------------------------------------------------------------------


    General Griffin. I also have with me today Dave Geiger, my 
Pacific Salmon Program Manager, and Mr. John Velehradsky, my 
Director of Engineering and Technical Services. As we get into 
questions, if I get stumped they may have more detail than I.
    Senator Gorton. As we ask questions, we will be delighted 
to have any assistance you can get from the staff of any of you 
here, and I suspect Mr. Hardy is probably not going to have to 
turn around. He has been so accustomed to so many of these 
questions for so long.
    And we now, of course, have been joined by three other 
Northwest Senators, Senator Craig from Idaho and my colleague 
Senator Murray, and Senator Wyden from Oregon, who is not a 
member of the committee, but who has every bit as much interest 
in these issues as do those of us who are, and who is most 
welcome to the hearing.
    I have, as you can imagine, a large number of questions for 
these witnesses. I think with your indulgence I will go through 
my questions to Mr. Hardy on transmission and marketing 
functions of the BPA, and then we can go back and forth on 
questions and we will not impose any time limits.
    Each one of you has a very, very real interest, and to the 
extent that I have not covered questions that are of interest 
to you, you can go ahead and ask them, and I will defer any 
more that I have until the end.
    Some of these questions I think, Mr. Hardy, you have 
answered. I know a number of you have answered them to me 
privately, and some of you answered in your opening formal 
statement. I think I am going to put most of them anyway, 
because some at least will have short answers, and we will have 
a question and answer in the record that we can search through 
easily.

          separation of transmission and marketing operations

    Obviously, you know the region and spent a great deal of 
time discussing the separation of BPA's marketing and 
transmission functions. I understand that BPA has undertaken an 
analysis of the various roadblocks to accomplishing the goal of 
separation. The regional review's transition board for the 
Governors is also looking at the question of what legislation 
separating BPA's two functions would need to cover.
    First, I take it that you do believe that BPA's 
transmission and marketing functions should be split. Is that 
correct?
    Mr. Hardy. That is correct, Senator, with a caveat, as I 
indicated in my opening remarks, that the administration has 
yet to take a formal position, but in terms of my view of this, 
yes, that is correct.
    Senator Gorton. I fully understand.
    Do you have a recommendation with respect to the manner in 
which these two functions should be legislatively separated?
    Mr. Hardy. I would have a process type recommendation. As 
you are well aware, we are proceeding with a series of 
discussions both in the House and the Senate side here, and 
with the Governors' transition board back in the region.
    At this point, these discussions are still in the 
educational phase, but we are about to the phase, or we 
actually are to the phase now where we need to start 
identifying what the issues are associated with, say, 
implementing full legal separation of Bonneville. The next step 
after that would be, in my view, a detailed discussion of what 
options you have to address these various issues and resolve 
them, and then only after that point would we proceed to 
actually drafting legislation to do something.
    My main caution is, or my main counsel would be to avoid 
jumping in right now and trying to start drafting something. I 
think it would be a better consensus-builder if we started from 
issue identification, options for resolution, and then 
proceeded to drafting. I think our probability of building a 
regional consensus both in the region and back here would be 
greater if we approached it in that fashion than in, say, a 
more traditional legislative fashion.

                          indego participation

    Senator Gorton. Have you reached a conclusion, even a 
tentative conclusion yet, Mr. Hardy, as to whether or not BPA 
should become, or part of BPA should become the Bonneville 
Transmission Administration, serving as an independent system 
operator, or should that portion of BPA participate on a non-
Federal, independent system operation such as INDEGO?
    Mr. Hardy. No; I have not reached a conclusion. We are 
actively working with the INDEGO organization to try to resolve 
the various pricing and reliability and other issues that exist 
there. My view of this, Senator--and again, this is a personal 
view as opposed to an administration view--is that any piece of 
separation legislation should be agnostic on those points. It 
should allow Bonneville either to become the grid operator or 
to participate in a non-Federal grid operator.
    Senator Gorton. At its discretion?
    Mr. Hardy. I believe so, but again, I have not moved that 
far down the line in the reasoning. I think if you try to pick 
a course in the legislation, I am not sure that is the wisest 
thing, or that we know enough about that.
    I think that we have a series of obstacles right now for 
full Bonneville participation in INDEGO. One is legislative. We 
need legal authority to transfer the operational control of 
Federal assets, the Federal transmission system, to a non-
Federal party, so that should be removed.
    You have a whole series of other issues, reliability 
issues, pricing issues and whatnot. For example, how are 
Bonneville's environmental responsibilities and cost recovery 
responsibilities going to be treated if the INDEGO tariffs are 
not sufficient to recover our costs.
    We need a good 2 years worth of work in a contractual 
administrative sense, with the INDEGO participants, I think, 
before we can come back and say with confidence, yes, it makes 
sense to join INDEGO, or no, this will not work, and maybe we 
should go another direction.
    All I am seeking to do is to avoid prejudging those issues 
one way or the other, while as part of the legislation, at 
least clearing away the one legal obstacle to participation 
should that be deemed the appropriate choice.
    Senator Gorton. Two years from now, as we sit here 
questioning you, or 2 years from the time we pass legislation 
authorizing you?
    Mr. Hardy. We should be able to have the issues regarding 
INDEGO resolved within a year's time from today's date, if they 
are capable of being resolved at all, and I do not know whether 
that is the case. I am not about to make a judgment today as to 
whether that is the case. We have a lot of work to do, but I 
can assure you I have my best staff people working on this 
issue to try to resolve it in a positive fashion. I think if 
you ask the INDEGO participants, that is the same feedback they 
would give you.
    Senator Gorton. What is the degree of BPA's participation 
in the present discussion with respect to the creation of an 
independent grid operator?
    Mr. Hardy. We are extensively involved at a staff level and 
up to a vice president level in our organization in the various 
discussions and the various INDEGO subcommittees on pricing 
issues, on reliability issues, on other legal issues associated 
with the separation.
    The INDEGO participants want to make a July filing with the 
FERC for their ISO. We have told them we do not think we can be 
a formal part of that filing, but we can make an information 
filing so folks can at least tell if you apply the INDEGO 
tariffs to Bonneville transmission rates what the impacts would 
be, and we will keep working with them even after the filing to 
try to resolve these issues. I would characterize it as a very 
active and high level of participation by Bonneville staff.
    Senator Gorton. But you do not believe, I take it, that you 
have the present legal authority to do it?
    Mr. Hardy. That is correct.
    Senator Gorton. Can you give us either now or in writing 
the specific legal references, statutory references which 
inhibit your joining it?
    [The information follows:]
                                 INDEGO
    Congress has enacted multiple provisions regarding operation of 
transmission facilities by the Bonneville Power Administration. Taken 
together, Bonneville's legal counsel concluded that these legislative 
actions are strong indications of Congress' intent that the 
Administrator may not transfer control of the Pacific Northwest federal 
transmission facilities to a third party. If the Administrator were to 
join the FERC filing for the INDEGO ISO, the Administrator would be 
acquiescing in a transfer of control of the transmission system to the 
INDEGO. See 16 U.S.C. Sec. 838b (Section 4a of the Federal Columbia 
River Transmission System Act of 1974) (Administrator directed to 
operate and maintain federal transmission system within the Pacific 
Northwest), and 16 U.S.C. Sec. 824k(i)(5) (Section 212(i)(5) of the 
Federal Power Act as added by the 1992 Energy Policy Act) (In 
transmission access cases, FERC is prohibited from requiring the 
Administrator to provide transmission service if to do so would impair 
the Administrator's ability to provide transmission service to the 
Administrator's power and transmission customers in the Pacific 
Northwest.) In addition, a section of a 1986 Appropriations Act (The 
Urgent Supplemental Appropriations Act for 1986) (Public Law No. 99-
349, 100 Stat. 749, section 208 (1986) contains bill language that 
states that no appropriated funds or available funds shall be used by 
the Executive Branch for soliciting proposals, preparing or reviewing 
studies or drafting proposals designed to transfer out of Federal 
ownership, management, or control the facilities and functions of the 
Federal Power Marketing Administrations. This legislative language 
could be an issue. The Department of Energy Office of General Counsel 
has not reviewed the issue of BPA's authority to participate in INDEGO 
or any other ISO.

                     separation problems and issues

    Senator Gorton. Now, if we move in the direction of 
separation in either matter, obviously we will inevitably be 
discussing whether or not Bonneville's funds ought to be placed 
in two separate accounts, two separate funds, one transmission 
and one marketing. Do you feel that that is a necessary part of 
separation, and what are the real challenges and problems 
facing you and facing us if we are to make two separate funds?
    Mr. Hardy. I do not know if I would go so far as to say 
that is an absolute prerequisite to separation. I think it is 
probably desirable both in a substantive and in an appearance 
sense, but there are major issues associated with the one fund-
two funds issue.
    Let me highlight a couple of the principal challenges if 
you go to two funds, because if we decide to legislate, you and 
your colleagues will certainly have to grapple with this issue 
and make your own judgments.
    If we go to two funds, you need the same priority of 
payments for each fund as presently exists with the current 
fund. The first priority is to repay the supply system 
bondholders above all other parties, and then the Treasury is 
well down the list in terms of the priorities. If you seek to 
alter those priorities, you potentially undermine the security 
behind the supply system bonds, which is first Bonneville 
revenues and second, arguably, the U.S. taxpayer.
    By terms of the bond resolutions, the security behind the 
bonds cannot be lessened and while if ultimately the revenues 
of the Federal Columbia River Power System stand behind those 
bonds, then you have to be very careful not to affect the 
security of those bonds lest you trigger some predictable and 
probably adverse bondholder reaction to that lessening of 
security. That is one issue, same priority of payments.
    As for the second issue, you probably need an interfund 
loan arrangement between the now-separated power function and 
the transmission function such that if the power function gets 
in trouble it has the ability either to pay off supply system 
bonds or to make a Treasury payment by tapping the revenues in 
the transmission function before you get to the point of having 
problems.
    Senator Gorton. So obviously, because of the nature of the 
supply system debt, you can't have a full divorce between 
marketing and transmission pursuant to which transmission 
carries no responsibility whatsoever for that power system 
debt.
    Mr. Hardy. That is correct. Ultimately, the security behind 
the supply system bonds is a pledge of $2.5 billion a year of 
power revenues on a gross basis and $0.5 billion a year of 
transmission revenues, or a pledge of $1.5 billion a year of 
power revenues net of residential exchange, and a $0.5 billion 
a year of transmission revenues, and it is the collection of 
both of those revenue streams that secures those bonds.
    You cannot just take the transmission revenue stream and 
insulate it without materially affecting the security of the 
bonds. You can separate Bonneville into two agencies with two 
separate administrators who make independent decisions, but 
there has to be an after-the-fact accounting in a financial 
sense, and an ability for the power fund to call on the 
transmission fund to protect that revenue stream. If you are to 
have two funds, we think that is the best way to approach it.
    I should caveat that by saying that is our best judgment as 
to how to do this. This will require extensive discussions with 
the bond fund trustee, with underwriters, and with others as to 
whether we can do this in a way that convinces the bondholders 
and the bond fund trustee that we are not materially lessening 
the security behind the bonds. I simply do not know what the 
answer to those questions are yet, but we think it is doable.
    Senator Gorton. You said that it is highly desirable to 
have two separate funds. If there are not two separate funds, 
if somehow or other we keep a single fund, is there any 
legislation you need under those circumstances in connection 
with an otherwise separation of transmission and marketing?
    Mr. Hardy. Well, I think if the purpose of any legislation 
is to eliminate this conflict of interest, or potential 
conflict that now exists with simple administrative separation, 
that you would still need legislation to separate the 
decisionmaking powers of the head of the transmission 
organization and the head of the power organization. Then you 
would have a single fund administrator, and frankly we have not 
done any work to think of how that would work, other than that 
it would be horrendously complicated.

                      debt to the federal treasury

    Senator Gorton. Answer the same set of questions with 
respect to the debt to the Federal Treasury. Obviously, you are 
not dealing with bondholders or bond attorneys there, but we 
have some of the same problems about the security of the 
Federal debt, do we not?
    Mr. Hardy. Yes, sir; I would make the same analogies 
relative to the Federal taxpayers as I would to the 
bondholders.
    You need to have the same priority of payments. You need to 
have an ability of the power fund to call on the transmission 
fund before deferring a Treasury payment, and you need to have 
the same kinds of mechanisms to assure, I think, taxpayers and 
your colleagues outside the Northwest that the taxpayer at 
least is no worse off than they are today. Hopefully, we can 
construct this in several ways that the regional review 
suggested such that the taxpayer is actually better off.

                        fish and wildlife costs

    Senator Gorton. Now the third big and controversial issue 
that uses a lot of your money is fish and wildlife costs. 
Obviously, this question comes up in connection with any 
separation legislation. There are some, perhaps many, in the 
region who want to use the transmission system as a source for 
fish and wildlife costs.
    You told us that you have a study underway on that subject 
and on when you run out of the ability to have a competitive 
transmission system if too many costs are loaded on it. Would 
you speak to what you are doing in that area, and when we will 
have some answers from you on it?
    Mr. Hardy. Senator, I would like to take that issue and put 
it in a little larger context, if I could, and make it broader 
than just a fish issue. I think we have got a potential cost 
recovery problem post-2001.
    As I explained in my opening statement, we have a goal of 
getting to 2 cents in the year 2000. We think that will make us 
competitive in most, but not all, market circumstances. Our 
intention is to cost cut and market our way out of this issue 
to the maximum extent possible.
    In the event that power prices continue as low as they are 
today, say, in 2001, we will probably have a cost recovery 
problem. At that point, whether you use the transmission system 
as a collection vehicle I think is less specific to a 
particular cause or perceived cause, like whether it is fish 
costs or WPPS's cost or some other cost. As soon as you get 
into cost causation you polarize the debate.

                             stranded costs

    From my perspective, it becomes more difficult to resolve. 
In fact, the FERC way of approaching this is a more traditional 
kind of approach, which simply says, if you have an excess of 
cost over revenues you have a stranded cost recovery problem, 
or a cost recovery problem. It is in that case that you might 
need a vehicle to use the transmission system to collect some 
increment of additional cost if you could not fully recover 
your cost through your power rates.
    There are a number of ways to do that which we are just 
starting to get into with the Governors' transition board, and 
I suspect ultimately with you and other members of the 
delegation.
    One option--not the only one, but one option is to use the 
transmission system as a collection vehicle for some increment 
of those costs. It has both problems and potential virtues in 
different respects.
    The transmission system is at least physically usable for 
that purpose, and even with existing legal authorities we 
probably could put a general transmission charge at or on the 
transmission system and collect costs up to some level. Even 
though that would clearly face a legal challenge, it is 
probably the most readily available vehicle at the wholesale 
level to collect those costs.
    On the other hand, you cannot put too many costs on the 
transmission system without encouraging build-around or 
creating other problems where you're going to price your 
transmission system out of the market. The study we have 
underway, which we intend to take out to the region probably 
next month, is looking at what is the crossover point, or the 
point where you load so many costs on that you encourage 
massive build-around and you lose customers.
    Senator Gorton. But you will inevitably have a demand to 
spend all the money up to that break point, will you not?
    Mr. Hardy. I think that depends on how you structure it, 
and if the market improves post-2001 you may not need to use 
this at all. If the subscription process and the regional 
review are successful you may not need to use it, and again, 
from my view, if you are talking about the cost recovery 
mechanism it probably makes most sense to say, let us try and 
make the subscription process work and solve our problems that 
way. And that probably includes some administrative agreement 
to extend the fish memorandum of agreement, to get some 
certainty in post-2001 fish costs. Then any stranded cost 
charge or cost recovery charge would be--even if you 
legislated--it would be on a contingent basis.
    And if you fully recovered your cost because everybody was 
fully subscribed in 2001 you would not need to use it. 
Therefore, I do not think there is a guarantee that costs 
automatically would flow up to that level. If they did it would 
defeat the very purpose for which you put it on there in the 
first place.

                   corps northwest division location

    Senator Gorton. Thank you. General Griffin, I missed your 
point on the dual headquarters. One is Portland. Where do you 
fly back and forth between?
    General Griffin. Sir, that would be Omaha, the former 
Missouri River Division headquarters.
    Senator Gorton. I want you to tell me simply from your own 
point of view as to whether or not we did a wise job when we 
required that consolidation. Is there anything gained in having 
a single office for both the Missouri River and the Columbia 
River in efficiency, or could they be run better the way they 
were run before?
    General Griffin. Sir, the answer to your question is yes, 
you did help us. While there are no short-term gains, we 
basically have two regional offices. We know that we are going 
to continue to have cuts, and over time we can take advantage 
of some of the efficiencies of having two offices, and sir, the 
other thing is, as you know, the Army is downsizing and we have 
fewer general officers.
    We have colonels commanding divisions now. But the Corps is 
committed to putting one colonel 06 and a Senior Executive 
Service civilian in each location, and so I will have two 
deputies, two regional deputies and two senior civilians to 
work those regional issues and then command both.
    So it is doable, and what it does is put a general officer 
between those two offices and the headquarters to represent 
their issues and weigh in accordingly.
    Senator Gorton. Thank you.
    Senator Craig, you were first here.
    Senator Craig. Mr. Chairman, thank you.
    Of course, I mention fish recovery systems on the Snake and 
fish mitigation, and all of those are part of our budget 
considerations this year. They are going to be important to the 
entire Pacific Northwest. But let me take advantage of the 
gentlemen before us with several questions.
    First of all, let me welcome you to the subcommittee, and 
Randy, you have addressed a series of questions that the 
chairman has been concerned about, and those are of mutual 
concern, I think, to all of us in the Pacific Northwest that 
find you in our service area, and we appreciate it.

                       independent grid operator

    When you talked about independent grid operations for an 
independent grid operator, and Bonneville's role in that and 
the need for possible legislation, is there a constitutional 
question in BPA's participation, and how might that problem be 
addressed? Do you think we can legislate around that?
    Mr. Hardy. Maybe. Before you get to the constitutional 
issues, there is a pure legal issue that has to do with 
transferring operational control to non-Federal owners. That is 
the first threshold that you have to get over.
    Beyond that, at some level are constitutional issues of how 
far down the road can you go with non-Federal officials telling 
Federal officials what to do, and that really depends on what 
the structure of the grid operator is. The stronger the grid 
operator, the more likely it is that you bump into 
constitutional kinds of questions.
    I think you can work around that by ultimately giving the 
Bonneville Administrator the ability to withdraw from the grid 
operator or to veto certain decisions if they cannot be 
consistent with the other statutory mandates.
    Senator Craig. But how do we then get full participation if 
the 500 pounder on the block has that authority? I mean, we are 
going to have some frustration among independent operators, are 
we not?
    Mr. Hardy. That is a potential result, but again it depends 
very much on what the structure of the grid operator is. If you 
have a so-called weak ISO or IGO that, for example, does not 
have authority--and I am not arguing for this. Frankly, I would 
argue the contrary on a generic basis outside of Bonneville's 
issues.
    But if you had a weaker ISO where, for example, that grid 
operator did not have the authority to require a particular 
utility to build new facilities if that ISO judged that they 
were appropriate, so the ISO could not tell Idaho Power, or 
tell Bonneville to build this new transmission line from point 
A to point B, chances are you would have a lot better 
opportunity to avoid the constitutional kinds of issues that I 
just described.
    If, on the other hand, you have a stronger ISO that does 
have that ability to order investment decisions to be made and 
other kinds of decisions, the potential of bumping into that 
conflict is greater. It is there. I cannot tell you whether it 
is way off in the distance or whether it is right up in our 
face right now until we have a structure design for INDEGO that 
specifies what the roles and the responsibilities of the 
various parties are, and I think that most of that problem can 
be legislated around, but I cannot tell you with complete 
assurance that it can all be successfully dealt with.

                             cost recovery

    Senator Craig. In one of your responses to Senator Gorton 
you talked about the amount of cost that you can allow the 
transmission system to bear. Are you suggesting that some of 
the fish cost be borne by transmission, fish cost that you are 
experiencing?
    Mr. Hardy. No; what I am suggesting is that I think the 
best way to handle this problem is not to try to tie it to a 
particular increment of fish cost or a particular increment of 
WPPS cost or assign a causal factor to it. Simply, Bonneville's 
costs are whatever they are. Given the cost cutting that I have 
just described, any revenues are the best you can make them, 
and in 2001, if you have an excess of costs over revenues, you 
have a cost recovery problem.
    And then you have a mechanism, whether it is a transmission 
surcharge or some other mechanism to recover that increment of 
costs both to assure the security behind the supply system 
bonds and to protect the taxpayer. I think that is the logic.
    It seems to me that the best way to approach that issue is 
to deal with it in a general revenue recovery sense, which is 
the way FERC treats it when it identifies stranded costs in its 
order 888 rulemaking. That is procedurally the way that they 
specify it as opposed to trying to go in and identify some 
increment of cost that has a particular label on it which would 
be completely subjective anyway. I think we would be more 
successful using that kind of FERC precedent and then trying to 
apply it to Bonneville's unique circumstances.

             transmission operations and maintenance costs

    Senator Craig. Well, recently you contracted with a private 
consultant to determine that even with adjustment for system 
size and other requirements your transmission O&M costs were 25 
percent higher than other operators, such as some of the 
private investor-owned utilities. Could you discuss the 
findings of this report and provide a copy of that report to 
the subcommittee?
    Mr. Hardy. I certainly can provide a copy of the Bonneville 
summary of the findings provided by the consultant. We did it 
to benchmark our transmission cost against those of other 
providers. I would observe that yes, we are somewhat higher 
than some providers, and we are very much lower than many other 
providers, but there are a number of factors associated with 
that. I would be happy to provide the summary to the committee.
              Bonneville's Summary of Consultant Findings
    In January of 1996, BPA contracted with the consulting firm of 
Putnam, Hayes & Bartlett, Inc. (PHB), to apply their ``statistical 
benchmarking'' method for identifying a utility's potential for 
improving its cost efficiency to BPA's transmission costs from fiscal 
year 1994. Their method relies on FERC Form 1 reported costs and other 
data from U.S. investor-owned utilities to build multiple regression 
models that may be used to predict the expected average cost 
performance for a transmission utility given its unique system 
characteristics; for example, its service territory size, voltage 
levels, and line miles. By comparing a utility's actual costs to its 
predicted costs, they are able to estimate a cost savings potential. 
Then, by ranking utilities on the basis of estimated cost saving 
potential, individual utilities can see their relative performance as 
compared with other transmission-owning utilities across the U.S. or 
within their own geographic area. Statistical benchmarking is intended 
as an internal management tool to promote cost efficiency and is used 
in conjunction with process re-engineering and efforts to identify 
industry best practices.
    The findings presented to BPA only compared cost efficiency 
performance for transmission total cost, capital cost, and O&M cost 
compared to investor-owned utilities in the Western System Coordinating 
Council, or WSCC, region. Since the analysis depended on Federal Energy 
Regulatory Commission (FERC) Form 1 data for investor owned utility 
comparison, only those three categories of costs were available for 
comparison. The findings indicated that BPA would need to reduce its 
transmission total costs by 32 percent, reduce transmission capital 
costs by 32 percent, and reduce transmission O&M costs by 17 percent to 
achieve an average cost efficiency performance for the group of 
investor-owned utilities in the WSCC analyzed by PHB.
    Previous benchmarking studies, that did not control for differences 
in utility system characteristics, portray a BPA transmission utility 
with costs and performance characteristics that were about average or 
better compared to other transmission utilities. Likewise, comparisons 
of BPA's transmission rates with those of other utilities in the WSCC 
reveal better than average price performance for BPA.
    The PHB study adjusted BPA's costs to offset (i.e. seeks to remove) 
the effect of BPA's lower average cost of capital, approximately 7 
percent, which reduces the total cost of capital investments. If BPA 
were to invest in the same piece of equipment as an investor-owned 
utility with an average cost of capital of about 11 percent, BPA's 
costs, including the interest on the capital borrowed to fund the 
purchase and the absence of a return on investment, would be higher. 
BPA's average cost of capital (i.e. money) contributes to lower total 
costs and lower capital costs for the BPA transmission system compared 
to the same system operated as an investor-owned utility. The PHB 
findings remove this cost of money factor.
    The PHB study controls for (i.e. seeks to remove) the economy of 
scale effect in which the effect of higher voltage facilities is an 
economy of scale in which the design of the transmission facilities 
contributes to increased cost efficiency from the ability to transmit 
more power more efficiently and with fewer facilities and, therefore, 
lower cost per megawatt hour transmitted. For example, it takes roughly 
a 200-foot wide right-of-way, or ROW, to build two parallel 115 
kilovolt (kV) transmission lines as compared to constructing a single 
500 kV transmission line requiring a 150-foot ROW. Wider ROW 
requirements mean greater costs of ROW clearing and vegetation 
management.
    Two factors may have played a significant role in offsetting the 
effects of BPA's lower average cost of capital and the economy of scale 
inherent in the BPA transmission system: (1) BPA's traditional 
obligation to develop high-voltage main grid; and, (2) interconnection 
facilities for federal and other Northwest power transmission and BPA's 
determination to provide a high level of system reliability. These 
factors would tend to result in capital investment occurring in 
anticipation of future transmission constraints, causing a lower 
utilization of facilities which means that costs per unit of power 
transmitted would tend to be higher.
    The results of the PHB statistical benchmarking study that show a 
greater potential for efficiency improvement in capital costs as 
compared to transmission operation and maintenance costs appear to 
support the view that BPA's interpretation of its statutory obligation 
to serve load lead to a greater rate of capital investment compared to 
investor-owned utilities in the WSCC. The ability of the federal 
transmission interties to accommodate substantial swings in the amount 
of Northwest hydropower available for export to California supports 
this hypothesis as well. In short, we have historically built a very 
robust transmission system to ensure that the needs of all regional 
utilities, particularly northwest investor owned utilities, were fully 
accommodated.
    The planned level of reliability is another contributing factor to 
a utility's total cost of transmission. The amount of facilities 
developed and the designs of facilities have both cost and reliability 
consequences. BPA's transmission system is more reliable than the 
average reliability of transmission utilities in the WSCC, this may be 
part of the reason that BPA's transmission system is not as cost 
efficient in the findings of the PHB study. Ideally, statistical 
benchmarking would consider differences in system reliability and their 
effects on the cost efficiency of different transmission utilities. 
However, information on transmission reliability is not available and, 
therefore, cannot be used to control for the effects of those 
differences across utilities.
    Nonetheless, BPA has participated in other benchmarking studies in 
which comparisons of system reliability were performed, such as the 
Theodore, Barry & Associates, or TBA, 1995 transmission and 
distribution benchmarking study. In those studies, BPA has compared 
favorably, ranking in the top 10 percent of participating utilities in 
terms of System Average Interruption Duration Index, or SAIDI, and in 
the top 25 percent of System Average Interruption Frequency Index, or 
SAIFI. (Theodore, Barry & Associates, 1995 Electric Transmission and 
Distribution Best Practices Survey.) BPA's transmission reliability 
standards and performance targets may be important contributing factors 
in BPA's higher capital and O&M cost in the PHB benchmarking findings 
because of the reliability for cost-of-service tradeoff. Since the 
identities of participating utilities are kept confidential in the TBA 
benchmarking studies, BPA was not able to incorporate the reliability 
information into the PHB statistical benchmarking study.
    The findings of the PHB statistical benchmarking study were 
transmitted to BPA informally. No formal report was prepared by the 
consultant or BPA on the statistical benchmarking study. The original 
contract price for the study did not include the preparation of a 
formal report by the consultant. Regression equations and tabular 
results were transmitted to BPA in the form of letters and faxes from 
the consultant. BPA requested an estimate from the consultant for 
additional follow-on work and preparation of a formal report of the 
study. Given the price of contracting for a formal report and follow-on 
effort by the consultant and considering that BPA already had the major 
benefit of the cost performance findings to use in its re-engineering 
initiatives, BPA declined to contract for the additional work.

                       residential exchange rates

    Senator Craig. Very good. I understand that you just 
reached an agreement with Pacificorp on residential exchange 
rates. Can you tell us about the settlement and its impact on 
ratepayers?
    Mr. Hardy. I think it will be good news for Idaho 
ratepayers. We worked hard. We settled with PG Power about 2 or 
3 months ago, and we have been negotiating with Pacificorp for 
its southern Idaho loads for the last, I would say, 2 months in 
earnest. Negotiations with both companies have moved along.
    As a result of the 7(b)(2) provision of the regional act, 
we basically, as you know, reduced residential exchange 
benefits to all exchanging IOU's, and we have been working now 
to try to mitigate that rate impact.
    The agreement we reached with Pacificorp was basically a 
split-the-difference kind of arrangement where we paid out or 
had a higher exchange payout than otherwise would have been the 
case, in all likelihood, to Pacificorp to be passed through 
their ratepayers. Pacificorp similarly agreed to work with the 
State of Idaho and others to try to mitigate those rate impacts 
both prospective and, as I understand it in Pacificorp's case, 
to some extent the retroactive impacts.
    Our principle at Bonneville which Pacificorp, and we both 
agreed to, was a sharing of the pain associated with the rate 
impact so you did not have a step function where all of a 
sudden at the end of this fiscal year you had a precipitous 
drop in exchange benefits and a consequent increase in rate 
impacts to irrigators and to other critical loads in Idaho. We 
sought to phase that in over the remaining 4 years of the 
exchange, and that is what we have done.
    Senator Craig. General, you have already responded to the 
chairman on a variety of questions. I think the one that I was 
most interested in was where you felt your authority rested as 
it related to drawdown. You have been clear on that, and I 
appreciate that, because as you prepare to provide us an 
understanding of the studies involved I think we have outlined 
a good number of concerns besides fish as to the kind of impact 
that a drawdown could have.
    When I sit at the upper end of all of those pools we are 
extremely concerned about the economics of losing some of our 
capacity to move freight down river, and seeing how we put all 
of that together consistent with fish mitigation.

                          acquisition of water

    John, it is nice to see you before the committee. We are 
pleased to have you here. I have only one question of you. As 
you know better than anyone else, we are blessed with a unique 
water year in the upper reaches of the greater Columbia River 
basin known as the Snake River watershed, and we are all 
quietly praying for a cool spring to be able to get that past 
Idaho and headed on down the system.
    Be that as it may, with all of this abundance that is going 
to be coming out of the Snake and its tributaries, do you 
anticipate any need to acquire water from upstream right-
holders to meet fish concerns this season?
    Mr. Keyes. Mr. Chairman, Senator Craig, we have to buy the 
water every year to meet the requirements for the 427,000-acre 
feet called for in the biological opinion. That water comes 
from reclamation storage space in the reservoirs and what we 
purchase from willing sellers in the basin. That 427,000-acre 
feet is used after the flood flows are past, to maintain the 
flow levels into the operating season.
    Senator Craig. John, with what appears to be a much more 
extended season this year, when it relates to flood levels, 
certainly not flood levels but spill levels, you still do not 
believe that it will lessen the need for acquisition up to, let 
us say, the 427,000-acre feet?
    Mr. Keyes. Mr. Chairman, Senator Craig, it takes that water 
for a very short time to meet the flow targets, and we 
anticipate needing the whole 427,000-acre feet to extend it 
while there is still fish in the river.
    Senator Craig. Thank you very much, gentlemen.
    Mr. Chairman, thank you.
    Senator Gorton. Senator Murray.

                      privatization of bonneville

    Senator Murray. Thank you, Mr. Chairman.
    Let me change the subject a little bit. We have had at 
least three Dear Colleague letters, including one today, 
advocating privatization, and Mr. Hardy, while you are here, if 
you could take a few minutes to talk to us about the effect of 
privatization on Bonneville, and specifically if you could tell 
me what impact it would have on the WPPS's debt that BPA is 
responsible for.
    Mr. Hardy. Well, I think privatization in its purest form 
faces a major obstacle relative to the WPPS's debt, as I 
described I think, Senator, before you came in.
    Bonneville revenues are the security behind the WPPS's 
debt. Ultimately, because we are a Federal agency, the Federal 
Government stands as a junior creditor behind the repayment of 
WPPS's bondholders. In all likelihood that debt, and the terms 
of the bond resolutions, which passed in the early 1970's, are 
such that the security behind that debt cannot be lessened. 
Therefore, it is hard to see how a private buyer could maintain 
the same security behind the debt unless that buyer also 
essentially defeased all $7 billion of WPPS's funds. Once you 
raise the bar that high, or once he or she has purchased the 
assets, and when the private buyer's revenue-raising capability 
is going to be constrained by the market there will likely be 
an impact on the bond security.
    It is very difficult, in our view, to construct a case 
where the taxpayer is actually better off than if we simply 
continue to make our existing Treasury payments in full and on 
time. Probably the biggest single hurdle associated with any 
privatization is that you have to defease 7 billion dollars' 
worth of WPPS's funds.
    Senator Gorton. Excuse me, Senator Murray. I think that is 
so central a question. Just in plain layman's terms, with all 
of those debts, Bonneville has a negative net worth, or pretty 
darned close to it, does it not? No one is going to take on 
that amount of debt.
    Mr. Hardy. It would entail a fairly optimistic view of what 
our revenue-raising capability is in the near future, Senator.
    Senator Gorton. I am sorry, Senator Murray, but that was 
the heart of the issue.
    Senator Murray. And if you could continue just 1 minute and 
tell me what effect privatization would have on the United 
States-Canada treaty that governs the hydro system.
    Mr. Hardy. It would be problematic from that standpoint as 
well. We have a treaty with Canada that we negotiated and 
signed that was ratified in 1964 that provided for the 
construction of three dams in Canada with substantial 
downstream power benefits in the mid-Columbia facilities, both 
Federal and non-Federal.
    Bonneville is the U.S. entity for administering that 
treaty. I do not think there is any legal ability to have a 
private party be the U.S. entity, and so you immediately raise 
serious questions relative to the administration of the treaty.
    I suppose the Corps is also part of the treaty and that the 
Corps could pick up the issue, but not until we transfer 
basically all of our power marketing people over to the Corps 
to execute that function, so it is hard to see where you have 
gained anything.
    But needless to say, that would raise some substantial 
complications relative to the administration of the Canadian 
treaty.

               direct funding of hydroelectric activities

    Senator Murray. Thank you. I appreciate that. I just wanted 
those comments on the record.
    Mr. Hardy, you and I have had a bit of a chance to talk 
about direct funding for fish and wildlife mitigation efforts, 
and if you could take a few minutes to comment about that and 
how you see it saving money for ratepayers I would appreciate 
it.
    Mr. Hardy. Well, we have engaged in direct funding to some 
extent for fish and wildlife and also probably more extensively 
for basic hydroelectric maintenance.
    We have an agreement with the Bureau that we signed earlier 
this year that provides for full funding for all of the 
Bureau's O&M activities, some $41 million in fiscal year 1997 
that we are funding directly. We are working with General 
Griffin and the Corps to try to get a similar agreement.
    The Corps has, as the general indicated in his opening 
statement, some concerns about certain aspects of the agreement 
we have with the Bureau, but I think we are down to basically 
one issue. The issue is, do we direct fund the entire Corps 
maintenance budget, or do we just fund major rehabs and 
continue to fund the routine O&M in a more traditional 
reimbursable way?
    We have a disagreement about that, but I think we are ready 
to get to the negotiating table and hopefully engage on that 
issue. I could go into greater detail as to what our 
perspective is, and the general can as to what his perspective 
is, but I think the key factor here is, if he and I can get to 
the negotiating table, we can solve this issue.
    Senator Murray. So, basically it works for you with the 
Bureau of Reclamation right now.
    Mr. Hardy. Well, we think it works fine.
    Mr. Keyes. Mr. Chairman, Ms. Murray, the Bureau of 
Reclamation operates 10 powerplants in the Pacific Northwest 
region. Bonneville markets the power from those facilities 
under the direct funding agreement that we signed in December. 
They direct fund the operation and maintenance moneys that we 
use in all of our powerplants.
    Under a previous agreement they funded the work that we did 
on capital outlays, such as rewinds, uprates, rebuilds, and 
that sort of thing. Both of those agreements are working 
outstandingly for us.
    We have been doing the capital improvements for about 5 
years and we have rewound an uprated Hungry Horse powerplant. 
We rebuilt Menadoka powerplant, and we are rewinding and doing 
the turbine runner work at Grand Coulee under that agreement.
    The agreement that we did this December allows them to pay 
us as we spend the money to run the powerplants, the salaries, 
the regular O&M. It is working very well for us. We do not see 
that agreement as the Congress relinquishing any of its control 
over Bonneville or Reclamation. We see it as good business.
    Let me give you an example. Before, if we had a transformer 
that we needed to replace we would put it in our appropriations 
stream and we would have to do it 2 years ahead of time. When 
that 2 years was gone, we got the money to replace the 
transformer. If the transformer was still running, we replaced 
it anyway because we had the money. If we did not use it, we 
lost it.
    Now, we can keep running the transformer until it breaks, 
essentially, and then replace it because they can carry the 
money over and then in some instances we are getting an extra 2 
or 3 years out of transformers, where before we were having to 
replace them before their useful life was done. We think it is 
a good deal. Reclamation highly supports the direct funding 
from Bonneville.
    Senator Murray. General Griffin, tell me why you would 
oppose this for the Corps. What barriers do you see for doing 
the same kind of direct funding with the Corps?
    General Griffin. Well, we support the direct funding on 
nonroutine major maintenance and major rehab. In fact, we have 
just concluded an agreement to repair Ice Harbor Unit 5, that I 
am sure you are well aware of, under an agreement that we have 
right now with BPA.
    It is the routine maintenance, the day-to-day O&M 
maintenance where we have a concern, and specifically is that 
other purposes, not hydropower, would suffer under a change in 
funding mechanisms.
    The best way to illustrate this is--and again, we will try 
to work through this, but it is really a policy issue. But an 
example might be, you might build a road into a multipurpose 
project that we operate not only hydropower but recreation, 
navigation, irrigation, and the reasons that we are authorized 
to operate a project.
    So you might be building a road in, and it will benefit 
navigation and hydropower. Well, it may be a hydropower 
facility that is very, very low down on BPA's priority, and 
they may say no, we do not want to pony up part of the money 
for the road. So, therefore, navigation may suffer, not being 
able to get that new road to the lock and dam that supports not 
only the lock and the hydropower.
    So those are concerns, on our ability to resource the 
multipurpose projects day to day, not the major maintenance and 
rehabilitation, which would be around $40 million to $60 
million.
    Senator Murray. Mr. Hardy, maybe if you could--and not to 
negotiate this right here, but could you just tell me how you 
solve those problems with Bureau of Reclamation?
    Mr. Hardy. I would ask John to comment on this as well. We 
found out that concern simply has not been an issue with us. 
John has every bit as many multipurpose uses in his facilities 
as the General has in his, and what it has forced is put to us 
on a more businesslike relationship where we fix things when 
they break, or on time, or we can plan maintenance with 
stability in an integrated fashion over a 5-year period.
    If you get to the kind of problem the General is describing 
you can spot it early on, and there may be some allowance for 
some small percentage of funds, in our view, that would be 
appropriate to keep on a reimbursable level.
    But simply saying we have $90 million in reimbursable now, 
which is about, I think, where the Corps O&M budget is, and we 
are going to add $50 million on top of that, with only that $50 
million you can fund Bonneville, no, from our perspective that 
does not force the integration that you need and the 
efficiencies that you need in that program. We have simply not 
found that to be an issue with the Bureau.
    Mr. Keyes. We have multiple use facilities all over the 
region. We have been able to allocate those costs and the 
operation, so that is not a problem. We cover our fish and 
wildlife aspects for the rest of the work, our recreation and 
so forth, outside of the power funding, and we have not had 
that problem in all of the time that we have been working under 
these agreements.
    Senator Murray. So I am hearing you say that direct funding 
has allowed you to be more efficient and make longer term 
decisions to fund things in a way that makes more sense for 
taxpayers.
    Mr. Keyes. That is exactly what we have found in 
Reclamation.

                           future fish costs

    Senator Murray. Thank you. One other question. Mr. Hardy, 
you talked a little bit about the post-2001 era that we are 
going to be facing, and that is when the memorandum of 
understanding expires, and you talked a little bit about this, 
but if you could be a little more specific for me on what you 
suggest we do to establish some certainty about fish cost over 
a longer term period, I would appreciate it.
    Mr. Hardy. We are working within the administration to try 
to figure out how to address this issue, and also within the 
region to try to either extend the existing fish MOA or have 
some cost certainty for some period of time post-2001.
    We think, and I think the customers who are potential 
purchasers of our power post-2001 think that such an extension 
to provide certainty on future fish cost is an absolute 
prerequisite to their signing any agreement.
    As I described in my opening statement, Senator, we have a 
big post-2001 cliff problem, where 75 percent of our revenues 
are up for grabs when our contracts expire on October 1, 2001. 
I think it is highly doubtful that customers will sign new 
contracts unless there is some certainty around post-2001 fish 
cost.
    All that being said, I think we should talk not just about 
fish cost, but we also need a forum in the region to talk about 
mitigation measures, and so it is my hope that we can talk not 
just about letting us extend the fish MOA at its roughly $400 
million level, but let us talk about priority tradeoffs within 
that funding level where you can find those different 
mitigation measures, even maybe a down payment on a drawdown.
    I think there are credible ways we can do that, but we need 
to engage that discussion in the region so it is not just a 
cost discussion, but it is a cost and measures discussion. I am 
not pretending that there is any solution out there, but if we 
could identify four or five options, some of which might be 
drawdown options, some of which might be nondrawdown options, 
but have the confidence with that the right kind of priority 
tradeoffs we could finance any one of those options. Then at 
least Bonneville is financially indifferent to the eventual 
outcome and our financial integrity is not at risk depending 
upon what fish strategy is taken.
    That, as we found out 2 years ago when we negotiated the 
original MOA, was the one thing that the administration and the 
delegation could agree on, we need to save the fish and we need 
to keep Bonneville financially healthy. We have to construct a 
circumstance where we get to that same outcome, and if we 
pursue either of those objectives to the exclusion of the 
other, we will not get very far.
    Senator Murray. Thank you very much, Mr. Chairman.
    Senator Gorton. Senator Wyden.
    Senator Wyden. Thank you, Mr. Chairman.
    First I wanted just to say thank you to you, Mr. Chairman, 
for inviting me. As a nonappropriator I find this very helpful, 
and I thank you for your courtesy.
    Senator Gorton. Well, every now and then it turns out that 
something substantive turns up on these bills, Senator Wyden, 
and we want you, if that should happen this year, to be a full 
participant.

                     bonneville-related legislation

    Senator Wyden. Thank you, and I appreciate the chance.
    Let me start with a question about legislative issues if I 
could, Mr. Hardy. If the Northwest delegation chose, for 
example, to pursue a Northwest approach either through a bill 
involving just Bonneville or, in effect, what would amount to a 
Northwest section of a national piece of energy deregulation, 
what do you think ought to be in that bill, other than 
essentially the separation of generation and transmission?
    Mr. Hardy. Let me start by repeating what I have said 
several times in this hearing. The administration has not yet 
taken a position on any bill, and obviously I will be a part of 
the administration whatever they decide to do.
    Clearly, from my perspective I think the best hope of 
implementing something is to take the regional review 
recommendations and try to move those forward. Those clearly 
involve a legislative separation of Bonneville. Whether they 
involve any other legislative issues I think it is too early to 
determine.
    I think there are some issues, some recommendations on the 
subscription side that the regional review made that if you 
literally implemented them would require legislation.
    I think those are second and third order issues. It is my 
view that we can get 95 to 98 percent of the way there without 
legislating, and that the major issues are best dealt with 
administratively. We are engaged in a process now, both with 
congressional staffs back here and with the regional review 
transition board to take a close look at subscription issues 
and the subscription process and make a judgment as to whether 
we can, in fact, do those administratively or whether some 
selected issues require legislation.
    I would be happy to get into the specifics if you have an 
interest, but as a general matter I think we can do these 
things administratively.
    Senator Wyden. Well, getting enough customers to subscribe 
is really the make-or-break issue for Bonneville, and clearly 
we are going to need to know before too long whether Bonneville 
has sufficient authority to go forward with a successful 
subscription process.

                        public purpose concerns

    A second issue that I would like to ask you about are the 
public purposes, the question of conservation, renewable, and 
low-income issues. What is their future in this kind of 
deregulation, go-go kind of environment?
    I have to tell you that I am concerned even with the 3-
percent target figure that the regional review has staked out. 
My sense is that you all will probably be at 60, 65 percent of 
what you are doing now in terms of conservation and renewables 
and services for low income. What is the future of these 
concerns that I think are extraordinarily important to people 
in the Northwest?
    Mr. Hardy. I think they are under substantial pressure to 
be reduced, to the degree they are funded by us. But I have 
been pretty encouraged, actually, that most of the State 
legislatures have stepped right up to the 3 percent limit. In 
most of the legislative activity that has incurred in all the 
Northwest States, Montana may be a slight exception for some 
unique reasons, but particularly in Oregon and Washington, most 
of the bills that have been considered or are moving forward 
have adopted the 3 percent, which I think is a pretty good base 
level of funding for conservation renewables and low-income 
activity.
    I do think that if more needs to be done it is probably 
best handled at the retail level through a nonbypassable kind 
of charge of the type that the regional review envisioned when 
they made the 3 percent recommendations. That has the least 
distorting effect on the competitive market, and it is just 
like a meter's charge or a customer charge that utilities put 
on their bill now. And it seems to me that is the most 
appropriate place to handle it. So whether you are a power 
supplier, if you are Salem Electric or Bonneville or Enron or 
PGE, you have got a nonbypassable charge that collects whatever 
the legislature deems is the appropriate amount to be collected 
to fund those public purposes.
    Senator Wyden. What is your calculation if every 
legislative went to 3 percent, what is your calculation of what 
percentage of current funding we would be able to achieve?
    Mr. Hardy. The regional review calculated that 3 percent 
would yield about $210 million a year regionwide, and I think 
that was some 65 percent of the amount funded. I do not know 
the derivation of that number. The percentage seems a little 
low to me, and I would like to answer that for the record, Mr. 
Wyden, if I could.
    [The information follows:]
                 Funding for Public Purpose Objectives
    The final report of the regional review included a recommendation 
to ensure that cost-effective conservation, renewable resource 
development and low-income weatherization are sustained during the 
transition to competition and beyond, that, by July 1, 1997, 3 percent 
of the revenues from the sale of electricity services in the region be 
dedicated in aggregate over the region to those purposes for a period 
of 10 years. Based on 1995 revenues, this amounts to approximately $210 
million per year. This $210 million is 65 percent of what was spent for 
these purposes in 1995 by the region's utilities and Bonneville.

    Senator Wyden. You see, what I am concerned about, and the 
chairman and I have discussed this a little bit in the 
Northwest meetings that we have been having, is that 
particularly during any transition period, to have such a 
significant cutback might be very difficult for any transition 
period. I think that if you are talking about longer term 
changes, people might well look at other kinds of approaches. 
But I really sense that for those of us who have fought for 
conservation, fought for renewables, and have said low-income 
folks should not be left behind, I think that is quite a hit to 
take, and I am particularly concerned about the ramifications 
during the transition.

                        wpps's debt refinancing

    The third area I wanted to touch on involves the question 
of controlling costs. A couple of my colleagues talked a bit 
about that, as well, and you all, of course, have had 
experience with recent legislation in terms of restructuring 
Bonneville debt, and my question would be do you believe that 
there are any ways, with respect to refinancing the WPPS's debt 
at this point that could be a possibility for reducing future 
costs?
    Mr. Hardy. I do not see any options I regard as realistic 
or prudent. To refinance now you would have to have a 
significant drop in interest rates. We refinanced most of the 
WPPS's bonds in the 1989-96 period for an average interest rate 
of something as I recall in the 6 percent neighborhood, and I 
just do not see that as being in the cards.
    Now, you might be able to make an argument, Senator Wyden, 
if this is where you want to head, that you could refinance 
now, roll all the costs forward into the post-2018 time period, 
when all 7 billion dollars' worth of WPPS's debt is retired, 
and essentially keep our cost low now. I would tell you that we 
have been there, we have done that. In incurring another 
substantial amount of debt to put it into a window when we will 
have less costs, you end up paying a huge amount of debt 
service in the intervening time period which does not go for 
any productive purpose. I would counsel against that.
    We have had experience with that in the past, especially 
with the supply system plants, and inevitably you have concerns 
that come up that are really urgent regional needs. To have a 
chunk of your ability to finance those taken up by pure debt 
service is not the most desirable outcome.

            marketing bonneville power outside the northwest

    Senator Wyden. A question on rates, particularly how we 
stack up in the Northwest at this point versus some of the 
national rates. Now, in your testimony you said, ``Competition 
has brought wholesale market prices to below Bonneville cost-
based rates.'' And you also go on to say that the 1996 Energy 
and Water Appropriations Act allows Bonneville to market excess 
power outside the Northwest, and that is going to increase 
revenues and improve Bonneville's competitive position. So in 
effect, I guess Bonneville makes the argument that the agency 
can continue to make money selling power outside the Northwest, 
even though prices are now above Northwest market prices.
    What kind of data do you have to support what you are 
saying with respect to the market for Bonneville power outside 
the Northwest?
    Mr. Hardy. Well, we have two contracts that we have 
currently signed, one with the Bay Area Rapid Transit Authority 
in California and one with New Energy Ventures Corporations, 
which is an aggregator in California of a variety of loads. My 
recollection is the BART contract has been for something on the 
order of 50 to 60 megawatts. The NEV contract is a contract for 
200 megawatts initially, with an option for another 200. Those 
contracts have been at PF prices, so they have been at the 22 
to 24 mills per kilowatt hour price.
    We know there is at least some market there. How much of an 
additional market we have is not clear. A lot of it depends on 
what happens on the restructuring in California, how the so-
called power exchange is set up down there. I would not want to 
give you the impression that there is an enormous degree of 
additional revenue potential there. We think there is some, but 
this is a west coast market, and we are seeing the same kind of 
low prices in California as we are seeing in the Northwest.
    We are managing to find a few niches in a few places 
principally by looking to go beyond 2001 with some of these 
contracts, so you make up in terms of the length of the 
contract for the real low commodity price today. But there is a 
limit to how much of that you can expect to market.

                 regional rates versus national average

    Senator Wyden. Do you have a new study on prices that 
indicates Northwest electric prices to be about 65 percent of 
the national average, and that would then give Bonneville some 
opportunities to make some sales outside the region at times?
    Mr. Hardy. Yes; it is true that our rates, and not just 
Bonneville rates but all regional rates, are substantially less 
than the national average and substantially less than those in 
California, because California is a fairly high-cost State. But 
that is all embedded cost prices.
    The market we are competing in here is a variable cost 
market. I still think that there are some opportunities in that 
market, but we are marketing against Enron, and against other 
providers, who are marketing a product at variable cost plus 
one-half a mill, and it is pretty much the same product. I 
think that will gradually improve over time as the market 
rebounds as gas prices start to go up. I also think the other 
thing that will give us an advantage is the way the California 
restructuring works.
    Right now, California goes to full retail access on January 
1, 1998, and their three big investor-owned utilities have full 
stranded cost recovery through 2002. But after 2002 they do not 
have any stranded cost recovery.
    Right now there are several major generating plants, 
nuclear and some of the older oil and gas-fired units. The only 
reason they are running in California is because they are 
covered by rates from captive customers who do not yet have 
direct access to the retail market. When you have full retail 
access and you no longer have stranded cost recovery, you will 
have several units that are uneconomic and in our judgment 
cannot continue to run, and they will shut down. And when you 
remove that much supply, and I am talking about several 
thousand megawatts of supply, even in a market that is as big 
as the west coast market, that will tend to drive the price up.
    I cannot tell you whether that is going to happen in 2001 
or 2005 or 2007, but I am pretty sure it is going to happen 
sometime in that timeframe, and at that point the market will 
look pretty good for the kind of cost-based hydropower product 
that we currently have.
    Senator Wyden. That is a helpful answer, and obviously, my 
interest, as with all of our colleagues, is to protect 
ratepayers, and clearly the question is what kind of new tools 
are you going to have. The question about California, the 
question of the 1996 appropriations bill, we want the agency to 
have tools to be able to protect the ratepayers.
    One closing comment, and then a point for you, Mr. Keyes, I 
think, Mr. Hardy, we are moving into a very critical time with 
respect to the deregulation debate. I think we have seen over 
on the House side that they have begun field hearings, for 
example, on the energy deregulation issue, and I think it is 
going to be especially important that we in the Northwest are 
vigilant now over the next few weeks.
    I think that if a major deregulation bill is to go forward, 
I think you are going to see that determined over the upcoming 
weeks, and Senator Gorton has got a group of us in the Senate 
working on these issues from the Northwest perspective, and we 
may need your counsel very quickly, depending on what happens 
on the House side. We thank you for your answers.

                     watershed restoration projects

    Just one point for you, Mr. Keyes. Last year I worked with 
Senator Gorton to provide the Bureau of Land Management the 
authority to work with private land owners on some cooperative 
watershed restoration projects. My understanding is that the 
Bureau of Reclamation would like to look at some of these kinds 
of issues as well, and there has been an interest in the 
Department, is that correct?
    Mr. Keyes. Senator Wyden, we are working with a number of 
watershed councils already. We were looking at an expanded 
authority when we were looking at that Bureau of Land 
Management, and we would certainly welcome that if that could 
happen.
    Senator Wyden. Senator Gorton was very helpful to me. I 
think I had been in the U.S. Senate all of about 2 weeks at 
that point and folks on the Oregon coast were interested in the 
Bureau of Land Management having those powers, and it is not 
directly the subject of today's hearing but, Mr. Chairman, I 
would like to pursue this with you because I think what we 
found at home is industry folks, scientists, environmental 
leaders, have felt that it is particularly helpful to have this 
authority because then they can work the whole watershed, both 
the private land part and the public land part, and I would 
like to be able to pursue that with you.
    Senator Gorton. You are most persuasive, Senator Wyden.
    Is that it?
    Senator Wyden. Yes; thank you.

                   memorandum of agreement extension

    Senator Gorton. Mr. Hardy, would it considerably assist 
your subscription process if the memorandum of agreement were 
ratified by statute and extended, say, for 5 years to the year 
2006?
    Mr. Hardy. I think it would considerably assist the success 
of the subscription process for the agreement to be extended. 
Whether it would help to have the additional imprimatur of some 
statutory recognition of that I do not know. I do not think it 
could hurt, as long as we avoided sufficiency and other kinds 
of issues. But more to the point, having a kind of a unified 
bipartisan expression from the delegation about the criticality 
of having that agreement extended and that expression hopefully 
reflected in the administration and in the region would be the 
most helpful thing, whether that is memorialized in a statute 
or whether that simply is the interest and concern of 
delegation members applied directly to people.
    Senator Gorton. Now, you also stated that you really wanted 
to go beyond just costs, and you wanted to look at results, the 
way in which the money was used. In that connection, to do that 
right, are you not going to require some kind of decisionmaking 
authority that can make a determination as to how the money can 
be spent best, looking at the entire region and all of the 
interests for which that money is to be spent.
    Mr. Hardy. That is true. You need a structure. We have one 
now. There are various views as to how well or poorly it works 
to administer that money, both in terms of the Northwest Power 
Planning Council's program, the direct funding of capital 
improvements that we do principally with the Corps, and the 
various operational measures and how we operate the system that 
is principally driven by the National Marine Fishery Service 
requirements. And I think continuing to perfect that system 
would be helpful.
    Whether broader changes in the form of giver governance are 
required is simply an issue that I do not have good 
recommendations on, Senator. I am frankly trying to stay below 
the flack level on that issue and get to a point where we can 
address the post-2001 fish cost issue now, because we need to 
now, but also be able to talk about measures. So even though 
you have not decided and everybody might have their favorite 
option as to what is going to save the fish, everybody from the 
environmental community to our utility customers would have 
confidence that their favorite option could, in fact, be 
financed, given the requisite tradeoffs under the $400 million 
kind of cost parameter.
    If we could get that far I think that would help the 
regional interests know that they at least had not prejudged 
options by virtue of extending the fish cost MOA by another, 
say, 5 years. What I am worried about is in the absence of that 
folks will think you automatically, by extending that cost cap, 
have taken options off the table. I do not think that is the 
case, and I think we need to engage in a process, a little 
confidence building, that hopefully demonstrates to the various 
interest communities, including the tribes and the State 
fisheries managers, that that does not have to be the case if 
we approach this right. And part of that is also the 
institutional structure of who makes those decisions and how 
they are made.

                        reduction of power rates

    Senator Gorton. As Senator Wyden pointed out, we are in the 
midst now not just of a regional debate, but a national debate 
on competition in the marketing of electric power. Those of us 
from the Pacific Northwest are particularly concerned as a low-
cost area as to whether or not we are going to receive any 
benefit from this overall debate. But let us leave retail 
competition, as vital as it is, aside for one moment. Can you 
tell me whether or not since the Energy Policy Act of 1982 and 
the resultant increase of competition in the wholesale electric 
power market, by how much your rates, Bonneville's power rates, 
have been reduced in the 5 years since that law was passed, and 
whether or not there has been a reduction in other wholesale 
power rates in the Northwest.
    Mr. Hardy. Well, as I indicated in my opening statement, 
our rates have been reduced by 15 percent in the last 3 years. 
That has been the first rate decrease in our entire 60-year 
history. That, I think, gives you a pretty good measure.
    Senator Gorton. So it is actually 15 percent lower plus any 
increment by which it might have gone up in the absence of 
that.
    Mr. Hardy. That is true. To draw the picture a little more 
clearly, go back to 1993, 1 year after deregulation, but before 
this was fully manifested, we had a 15-percent rate increase. 
And then in 1996, almost exclusively because of the 
competition, we had a 13-percent rate decrease.
    As I also described in my opening statement, we are at 22.5 
mills now for a DSI-like customer, and we have a goal of 2 
cents in 2000. It will entail another 10-percent rate decrease 
to meet that goal, which we fully intend to meet, because we 
have to meet it to be competitive. So I would say in the near 
term at the wholesale level competition is having precisely the 
effect that folks had hoped it would have.
    That does not mean, however, to prejudge the larger issue 
about whether it is wholesale competition or ultimately retail 
competition because the low-cost regions get averaged up and 
meet the high-cost regions halfway in the middle. I think you 
could make good arguments on either side of that.
    I do not think that will happen initially, but whether that 
happens over the long term is anyone's guess.
    Senator Gorton. Well, I do not know that there are good 
arguments for that at all. Certainly from our perspective there 
are not. And one of the reasons that the authorizing committee 
has five Northwest Senators is to see to it that this lowering 
of power rates in the rest of the country, which is totally 
appropriate and very much to be desired, does not come at our 
expense.
    We recognize that we cannot get as dramatic a set of 
decreases as the rest of the country has, because we start from 
a lower base. But I do not think that there is the slightest 
degree of interest in our going up in order to meet them on the 
way down.

                           retail competition

    Let me ask you whether or not that 15-percent figure or 
anything like it is also the case with other wholesale 
marketers in the Northwest in the last 5 years. Have you been 
meeting competition, or have you been operating in isolation?
    Mr. Hardy. No; we definitely have been meeting competition. 
The unique aspect of this is that for retail customers, I do 
not think rates have gone up. My perception is also they have 
not gone down very much. That illustrates a very unique aspect 
of this competition, which from my perspective is a pretty 
unlevel playing field.
    We are 100 percent wholesale, so we have to recover all of 
our embedded costs in our rates and still set competitive 
rates. If you are Washington Water Power or Pacificorp you are 
only about 20 percent wholesale. Your other 80 percent of your 
load is covered with captive customers, where embedded costs 
are fully covered in retail rates to captive customers. Thus, 
you can compete on the margin with us and actually undercut us 
because you do not have to charge your rates to your retail 
customers. It has already been approved by the PUC, and you are 
covering your embedded costs in that, and you are free to 
compete with Bonneville on the margin. I do not have that 
luxury, and that has presented us with some pretty unique 
problems.
    Senator Gorton. So retail competition and retail choice 
would not only be an advantage to the retail customer, it would 
be an advantage to Bonneville in its competitive nature, as 
well?
    Mr. Hardy. I think it would be, because it would level the 
playing field. And even though we have made a conscious 
decision not to compete at retail, it would not give other 
investor-owned utilities the luxury to continue operating with 
all of their embedded costs covered with captive customers 
anymore. They would have to compete across the full range of 
their costs.
    Senator Gorton. Well, that does not apply just to our 
users, that applies to publics as well, would it not?
    Mr. Hardy. It would, yes.
    Senator Gorton. How much do you have to reduce your costs 
to be able to reduce your rates by 1 mill? You have talked 
about a 10-percent reduction in the next few years, but just 
per mill, how much in cost reduction does that require?
    Mr. Hardy. Each mill decrease entails about an $80 to $100 
million annual cost reduction.

                       legislation on competition

    Senator Gorton. Our legislature in the State of Washington 
has considered a competition bill, a deregulation bill, this 
year. It is obviously not going to pass this year, but it is my 
impression that there is going to be a serious attempt on the 
part of a broad range of interests to see to it that some kind 
of competition bill does pass our legislature early in 1998. If 
we or any of the other States in the Pacific Northwest were to 
enact legislation opening up that State to competition, how 
would that affect BPA? Have you participated, have you 
testified or given your views to our legislature or the Oregon 
legislature on this subject?
    Mr. Hardy. Yes; we have, Senator. We have participated in 
all four State legislatures. We are supportive of consumer 
choice, and have so indicated to each of the legislatures. If 
you make the effective date of full retail choice some date 
prior to October 1, 2000, that could present a transition 
problem relative to Bonneville, and it manifests itself in this 
way: If you mandate full retail access by, say, July 1999, 
which was the date recommended in the regional review, and do 
not have language protecting the revenue expectations for 
public agency customers under Bonneville's existing contracts, 
we might run into a problem of folks essentially seeking to get 
out of those contracts or avoid those contracts for the 2-year 
period between mid-1999 and late 2001.
    We have worked with the legislatures to say can you help us 
manage this problem, either by putting language in the bill 
saying honor the revenue expectations for this 2-year 
transition period, or make it voluntary in the case of the 
public agency customers so they can elect to solve this problem 
themselves, or give them the ability in their stranded cost 
recovery vehicle to charge for the failure to meet those 
revenue expectations so they could meet our requirements. Any 
of those three options will solve that problem.
    In any event, it is probably a 2- or at most a 3-year 
transition problem, and we have found, I think, fairly 
receptive audiences in each of the State legislatures to try to 
work with us to manage that transition problem so we do not end 
up with some big Federal-State confrontation over something 
that is an eminently resolvable issue in each of the State 
legislatures.

                        stranded cost definition

    Senator Gorton. Describe for the lay person what the term 
stranded cost means, what stranded cost BPA faces, how it 
proposes to deal with them, and whether or not it thinks it has 
any hold on its customers whose contracts expire in the year 
2001, or years after that time, if they do not sign new 
contracts.
    Mr. Hardy. Stranded costs, as FERC has defined it in Order 
888, refers to costs that were incurred prior to, I think it 
was 1994 or 1995, with the reasonable expectation of continued 
service on the part of the utilities. For example, when I was 
with Seattle City Light, I made investments in a generator or a 
transmission upgrade or a distribution upgrade in 1985 or 1990 
expecting that my customers were going to continue to be 
captive customers pretty much forever.
    And all of a sudden the world changed in 1995 or 1996, to 
full retail access, or in Bonneville's case to wholesale 
access. After such a change, customers have the ability to 
choose and leave those investments that were made with the 
``reasonable expectation of continued service'' stranded. That 
is the best example, in lay terms, that I can provide of 
stranded costs.
    FERC has been very specific about how they apply that 
definition in ways that probably do not literally fit the 
Bonneville circumstance. I would tell you post-2001 it is 
probably not appropriate to say that we have a stranded cost 
problem in the way FERC defines it. We have a cost recovery 
problem, and while that may seem like a fine distinction, it is 
pretty important lest we miscommunicate on this issue.
    We have no contractual hold on our customers post-2001. We 
think we have some cost recovery rights post-2001 should we 
choose to exercise those, but our goal, as I stated in my 
opening statement, is not to do that. Our goal is to cut our 
costs and to improve our revenues to get the 2 cents in 2000, 
and we think in most cases that will avoid any cost recovery 
problem.
    If, however, we have a cost recovery problem post-2001, we 
have at least some vehicles, possibly using the transmission 
system to collect some additional revenues. They are not 
vehicles that I want to use if I possibly can avoid it because 
they have a poisonous effect on the very customers that you are 
trying to voluntarily get to sign up for your power, but to 
fulfill our statutory mandates to recover our costs and protect 
the taxpayer, we still may have to exercise those. These 
vehicles will not be immune from substantial and aggressive 
legal challenge if we choose to exercise those.
    For all of those reasons, as part of the separation 
legislation, that is one of the key issues that the transition 
board and the Congress and the delegation are going to have to 
deal with.

                         john day dam drawdown

    Senator Gorton. On another subject, dam removal and John 
Day drawdown. As you know, the subcommittee has received a 
request about 1\1/2\ months ago to study the social and 
economic impacts of a drawdown of John Day Reservoir. By the 
end of this week I hope to have an agreement with all of the 
necessary parties to provide a limited approval of this 
reprogramming to enable the Corps to put together a study plan 
for review by the committees of how it would study the 
biological and social and economic impacts of a drawdown of 
John Day to spillway crest, and a natural river.
    Mr. Hardy, at this point I would like you to comment on the 
implications of proposals either to remove dams on the Snake 
River physically or by bypassing them, and/or lowering the 
level of John Day to spillway crest, or to natural river.
    How much energy would we lose? What percentage of the 
Northwest hydroelectric power do they provide? Has BPA made the 
very analysis that the Corps is asking us for of the power 
costs at least, and environmental impacts of those removals or 
modifications, and we will stop there with those three or four 
questions.
    Mr. Hardy. Yes; we have made at least some preliminary 
analysis which we would intend to provide to the Corps as part 
of their EIS and study process. Let me talk about power supply 
impacts, cost impacts, and rate impacts, in that order.
    The four lower Snake dams are 15 percent of our power 
supply on average. The common mistake in the media, they are 5 
percent of the region's power supply, but they are 15 percent 
of Bonneville's power supply.
    Removal of the lower Snake dams is not a trivial matter in 
a power supply sense. This is not just a navigation problem. It 
is both a substantial power and a navigation problem. It 
represents 15 percent of our power supply. John Day represents 
about 11 to 13 percent of our power supply, depending on 
whether you are talking about energy or capacity.
    The lower Snake projects have a $3.5 billion net present 
value. The John Day projects have a little over $4 billion net 
present value. The levelized NPV per year for the lower Snake 
dams is about $180 million per year.
    Senator Gorton. NPV?
    Mr. Hardy. Net present value, I am sorry. It is $280 
million per year nominal, $180 million per year levelized. The 
levelized is probably a more accurate figure for the cost and 
rate impact in the near term. The net present value cost impact 
is $330 million a year nominal, or $215 million a year 
levelized for John Day, if you take the drawdown all the way to 
the natural river.
    The rate impact, if you take out the four Snake projects is 
a 12- to 15-percent rate hit on top of what we have already. 
Now, recall that our rates are already 15 to 20 percent above 
market, so this is going to add another 12 to 15 percent on top 
of a system that already is substantially above the market 
price.
    John Day at natural river is about 15 percent as well. John 
Day to spillway crest is more on the order of a 10-percent rate 
impact.
    If you do both lower Snake and John Day to spillway crest, 
you are talking about an aggregate 20- to 25-percent rate 
impact, again on top of the 15 to 20 percent that we are 
already above market.
    So those are, as best as I can define it for you, the cost 
in net present value and the rate impacts associated with those 
various options.
    Senator Gorton. With that tremendous negative impact both 
on your competitiveness and on your ability to make your debt 
payments, right?
    Mr. Hardy. Yes; I think there is no other way to describe 
it.

                      alternative sources of power

    Senator Gorton. Can you tell us what the environmental 
impacts, especially the air quality impacts would be of 
alternative sources of power? One assumes that at the present 
time the new generation facilities would presumably be natural 
gas combustion turbines, would they not?
    Mr. Hardy. Correct. I think that is a safe presumption.
    Senator Gorton. If they were in the region, would they have 
an impact on air quality?
    Mr. Hardy. Yes; they would. I think you would have two 
impacts, although I do not have precise numbers for this. I 
think that is something we would have to do substantial 
additional work on, but you would have an air quality impact 
for those resources being constructed within the region, if 
they were constructed at all. That is a serious question in 
today's power market. You would have an air quality impact in 
the L.A. basin because we would not be exporting as much 
hydropower to California that typically displaces oil and gas 
fire generation there.
    Senator Gorton. I may say, just as a comment here on a 
different level, General, I think what the Corps wants to do is 
valuable. I have some constituents who just want to say an 
absolute no right now, and I have great sympathy with them, but 
I do not think we know the details of all of these, other than 
fish impacts of that drawdown, so I am working to give you the 
authority to do that, if only so the people of the Pacific 
Northwest will have a very good way of determining what all of 
the costs of various proposals are.
    So as I say, we are working and we are going to try to come 
up with an answer to you at least for this first stage by the 
end of this week, and then this bill, the bill that is before 
this subcommittee, of course, will almost certainly tell you 
whether you can go on from there.

                amendment on fish and wildlife projects

    I want to get back to you again on my own conflict of 
interest amendment on the $100 million for fish and wildlife 
projects. The design of the amendment was to change the process 
by which the dollars were awarded by making sure that 
independent peer-reviewed science was used in the selection of 
the projects to be funded, and not simply on the basis of the 
fact that an individual applicant was also on the selection 
committee.
    Now, the amendment has not even been law for 1 year yet, 
but I want you to tell me, give me your observations of how it 
is working. Have we made a gain, and should we make any changes 
in it? Can we improve it this year?
    Mr. Hardy. I think it is working well. I think we have made 
gains. It is a little early to make precise judgments. The 
council's scientific board has literally been overwhelmed with 
a number of projects, but they have made some kind of aggregate 
level evaluations and have raised, I think, some substantial 
questions about the types of projects. I think that is good, 
and that will over time build integrity into the process.
    I do not have any specific changes, Senator, that I would 
recommend this year. I think we need at least another year to 
let the process work so that the board can get into a routine 
and can evaluate these things in a more detailed level. They 
simply have not had the time to do that as thoroughly as they 
might like this year.
    I think given another year they can do that, and then they 
can make some pretty good assessments as to whether the process 
needs to be changed or whether the mix of projects is the 
appropriate mix or needs to be changed. I would frankly defer 
to the power planning council and to the board itself, given 
that additional year's experience, to come back to you and to 
the delegation and report to you on how that is going.
    Senator Gorton. Thank you.
    Mr. Keyes, with one exception you have gotten to be an 
interested spectator at this hearing. You did answer a question 
that I also had, I believe, for Senator Murray, but I just 
wonder as we bring this to a close whether you have got any 
other words of wisdom you would like to leave with the 
subcommittee.
    Mr. Keyes. Well, Mr. Chairman, we have benefited from about 
5 years of operation with Bonneville on direct funding of 
capital items. We are in the first year of funding of regular 
O&M. We think that the planning that goes into that and the 
close work with Bonneville will benefit the life of our 
facilities and provide us with the funding stream that will 
allow planning that we were not able to do before.
    I would have to add that that has built a closer and more 
satisfactory working relationship between the organizations, 
and I think the lines of communication are much better than 
they were before. There is a tradeoff there in control. There 
is a certain amount of sharing, of decisionmaking that is 
beneficial that we did not have to do before, but it is well 
worth the effort that it takes to make that work for us.
    Senator Gorton. Thank you, Mr. Keyes.
    General, welcome to the Northwest, at least part-time.
    General Griffin. Thank you, sir.
    Senator Gorton. And thank you for the work you have done 
and for the thoughtfulness of your presentation on issues that 
are of great importance to us.
    Mr. Hardy, I know of few Federal officials who have been 
more willing to speak out and answer questions, even though 
sometimes they have to be conditioned. The help that you give 
us in dealing with these fascinating and extremely complicated 
questions cannot possibly be overestimated, and I greatly 
appreciate it.
    Mr. Hardy. Thank you, Mr. Chairman.

                          subcommittee recess

    Senator Gorton. With that, the hearing is recessed subject 
to call.
    [Whereupon, at 3:55 p.m., Tuesday, April 15, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]



    ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 1998

                              ----------                              


                        TUESDAY, APRIL 22, 1997

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 9:32 a.m., in room SD-124, Dirksen 
Senate Office Building, Hon. Pete V. Domenici (chairman) 
presiding.
    Present: Senators Domenici, Craig, and Reid.
    Also present: Senator Allard.

                          DEPARTMENT OF ENERGY

             Environmental Restoration and Waste Management

STATEMENT OF ALVIN L. ALM, ASSISTANT SECRETARY FOR 
            ENVIRONMENTAL MANAGEMENT

                           OPENING STATEMENT

    Senator Domenici. The hearing of the subcommittee will come 
to order.
    Good morning, everyone. Senator Reid, ranking minority 
member from Nevada, will join us shortly. I am very pleased to 
have him as a member of this subcommittee. He has been very 
busy already, learning the business of the subcommittee, 
visiting laboratories and various places that we spend money, 
to see what we are doing. And I very much appreciate his 
genuine interest.
    Senator Allard from Colorado, is here this morning. He is 
very welcome. And if you have a scheduling conflict and want to 
inquire early, just tell me.
    First of all this morning, the Subcommittee on Energy and 
Water Development will consider the fiscal year 1998 budget 
request for the Department of Energy's environment management 
programs. The Department has requested $7.4 billion for 
environmental management for fiscal year 1998. Of that, $5.69 
billion is for ongoing defense environmental management, an 
increase of about $75 million or $76 million over the current 
year. The Department has requested $684 million for nondefense 
cleanup and $1 billion for defense privatization initiatives. 
We will spend some time today discussing that.
    Our sole witness today is Al Alm, Assistant Secretary of 
Energy for Environmental Management. Since assuming this 
position in May 1996, Mr. Alm has proposed two major management 
initiatives, a 10-year plan for cleaning up most of the DOE 
complex and an effort to privatize much of that effort. Some 
have strongly criticized the 10-year plan. And, incidentally, 
some have gone so far as to call for Mr. Alm's resignation.
    I want to make it very clear that I view the 10-year plan 
as an important management objective. For the first time, the 
Department is setting cleanup goals against which they can be 
evaluated, and formulating a strategy to turn back some of 
these sites and render them clean. I compliment Mr. Alm on his 
leadership in this area. And I do not believe the argument that 
his 10-year plan will do an injustice to our environmental 
laws, such as NEPA or the like. I assume they are consistent 
and should be part of any such 10-year management plan.
    So, Mr. Alm, while I have little to do with the executive 
branch's either appointment of or retention of executive 
officials, I want you to know that I think we must do something 
different in this area, and it just cannot continue as it has 
been. And I thought we were very lucky to get you to come back 
to the Department, and I still feel that way. And I compliment 
you on another initiative--your initiative which some call the 
privatization proposal.
    I appreciate the effort that has gone into trying to 
identify a new approach to DOE contracting. It may be that we 
cannot proceed with this privatization proposal this year, 
either because of some concerns or because we simply do not 
have sufficient subcommittee allocation to provide the $1.006 
billion that you are requesting to start with.
    In any case, it is a serious proposal. And I can assure 
you, from our standpoint, it will be taken seriously. I hope 
you will focus a good deal of your testimony on that proposal 
as you talk with us here today. I know others may be coming, 
but I am going to proceed to let you give your statement.
    Is that all right, Senator Reid?
    Senator Reid. Of course.
    Senator Domenici. Let us go, then.
    Senator Allard, would you like to say anything now?
    Senator Allard. Yes, Mr. Chairman.
    Senator Domenici. Welcome.
    Senator Allard. I would like to just kind of get a feel 
from you on how we are going to proceed this morning. I have a 
statement for the record and some questions I would like to 
have submitted after questioning, and then some other 
questions. And I did not know whether I had a time limit or 
not.
    Senator Domenici. Well, let us go with your opening 
statement first.
    Senator Allard. OK, very good.
    Senator Domenici. There is no time limit on it, other than 
reasonableness, and then we will yield to Harry Reid.

                       STATEMENT OF WAYNE ALLARD

    Senator Allard. Very good. Mr. Chairman, first, I 
appreciate the forbearance of you and the ranking member in 
allowing me to sit in with the subcommittee today so I can ask 
Mr. Alm questions concerning Rocky Flats.
    Mr. Alm, I am sure you are aware that Rocky Flats is a 
former nuclear weapons plant in the upper reaches of a 
watershed that serves 400,000 people, and is upwind of the city 
of Denver. The proximity of the site causes many Coloradans 
great concern. As individuals, potentially, who have to live 
near the Rocky Flats site, they want it cleaned up quickly. And 
as taxpayers, they want it cleaned up efficiently.
    While there have been past management difficulties at Rocky 
Flats, they have been worked out. And the only impediment to a 
speedy cleanup of the flats is the commitment by the Federal 
Government. And in a moment, Mr. Alm, I will be going through a 
chart during the questioning period, outlining several spending 
options with you and directing some questions to you in that 
regard. And these charts will show that if we spend a little 
more money up front, we can close the plant down quicker, 
eliminate any threat to the Denver metro area, and eliminate an 
obligation against DOE.
    Furthermore, if we spend a little extra up front, we can 
save a lot of money on the back end.
    So I just want to thank you, Mr. Chairman, for letting me 
sit in on the meeting this morning.
    Senator Domenici. You are most welcome.
    Senator Reid.

                        STATEMENT OF HARRY REID

    Senator Reid. Thank you, Mr. Chairman. I am glad we have 
the opportunity to look at the environmental management program 
of the Department, given its impact on sites across the United 
States and, consequently, the communities where the sites are 
located.
    I have reviewed the background material and the statement 
given by Assistant Secretary Alm. I think the 10-year planning 
of waste management and environmental restoration is basically 
a good plan. One of the complaints against the environmental 
program--and I think it is justified to some degree--is that 
there are often no deadlines or end in sight. There are many 
who have argued that a cleanup of a site could go on 
indefinitely.
    Obviously, the Government does not have funds for endless 
activity. And the planning of this agency appears to respond to 
the call for certainty of timeframes, closure of activities and 
accountability for the programs, goals and objectives. The 
magnitude of the size of the privatization initiative, which 
has increased over 200 percent, raises concerns about the 
Federal oversight and the public interest in cleaning up the 
sites. So I have some questions about the assurances that the 
Department can give this subcommittee on the efficient use of 
these Federal dollars, especially as it relates to oversight.
    We are all concerned about individual sites, which have an 
impact on our communities. I, of course, have some. I do note, 
however, that funding at most sites decreased in the next 
year's budget. During the course of your remarks, I would hope 
that you would discuss the criteria which you applied in 
increasing or decreasing the funding of waste management and 
environmental restoration at particular sites.
    Thank you, Mr. Chairman.
    Senator Domenici. Thank you.
    I note the attendance in the audience of a large number of 
young people. Are you all from one organization? I note some 
Close-Up badges. Are you all Close-Up people? Give us a show of 
hands, those who are here with Close-Up?
    [A show of hands.]
    Senator Domenici. Well, I do not know whether they told you 
this would be an invaluable hearing or whether they just told 
you this was a mandatory performance and that you come. In any 
event, we welcome you.
    Let me just take a moment, before we get to our witness, 
and tell you what this hearing is about. In the U.S. Senate, we 
have an Appropriations Committee. That committee takes care of 
spending all the money that we spend in the U.S. Government for 
domestic and defense activities, other than the entitlements, 
such as social security and medicare and the like. And we must 
appropriate the money under current law every year.
    For management purposes, the Appropriations Committee is 
divided up into 13 subcommittees. The only way you can run 
business in a legislative arena is to have committees. And when 
a committee has such a big undertaking, the only way it can 
conduct business is to divide into subcommittees. Each 
subcommittee has a chairman and a ranking member. In this case, 
I am the chairman. I am from the State of New Mexico. Senator 
Harry Reid is from Nevada. He is the ranking member.
    This committee, which is given the job of providing all of 
the money that the Department of Energy spends, both for 
domestic energy research purposes and for the defense 
activities that have to do with nuclear weapons--their 
maintenance, their stewardship, their safeguard, and now the 
build-down. In addition, we have a little side job of a few 
billion dollars to provide for the waterways of the country and 
the Corps of Engineers.
    As an example, right now, within the next few days, we will 
appropriate about $400 million in an urgent supplemental to the 
Corps of Engineers. Because of the flooding and the other 
things that are happening, the Corps of Engineers will be 
involved in rebuilding, replenishing and doing some of their 
work.
    But today, we took one little piece of this budget--I 
should not say little; it is getting very, very big--it is the 
fastest growing part of this budget by far, more so than 
nuclear weapons and the like--this is the cleanup of the 
residual effect of our nuclear weapons development. Four or 
five cities in America were the places where we did a lot of 
this work and now we are not doing it anymore. And we have to 
take the nuclear residue, which is radioactive and dangerous, 
and we have to make it, in some way, safe. And it is costing a 
huge amount of money.
    As an example, for just one aspect of it this year, the 
part that will clean up defense waste is $7.4 billion. That is 
a lot of money. To put it in perspective for yourselves as 
young people, we spend about $14 billion for all the research 
we do in all of medical research. And to clean up this residue, 
we are going to have to spend about $7.1 billion. And this one 
is growing dramatically. And so this gentlemen, as part of the 
cabinet of the President, under the Department of Energy, for 
at least 6 or 7 months, almost 1 year, DOE has been in charge 
of trying to give us some new way to solve this very, very 
serious problem.
    OK? And we will not have any questions.
    Senator Reid. Mr. Chairman, my only disappointment is I 
thought these were all press and lobbyists out here. 
[Laughter.]
    Senator Domenici. Senator Reid is running for reelection. 
He would very much like for this to be a room full of press 
people, just with the hope that he might get a little press 
coverage in the State of Nevada.
    Sorry, Harry. Even if you were impressive today, it will 
probably go unnoticed. [Laughter.]
    Mr. Alm, would you proceed, please.

                       statement of alvin l. alm

    Mr. Alm. Mr. Chairman and members of the subcommittee, I 
must say that it is rare that I have been able to draw such a 
crowd at a hearing. [Laughter.]
    I want to thank the chairman for his kind words and also 
indicate that I think the quality of the staff on the committee 
is absolutely first rate, and we really enjoy working with 
them. It is a very professional relationship.

                        fiscal year 1998 budget

    The fiscal year 1998 budget is a transitional one. We are 
shifting from a program that was projected to span many decades 
to one focussing on cleanup of most of the sites within a 
decade. We are implementing strong incentives for performance--
I will get into that in a moment. I am going to cut down the 
prepared statement substantially so we can get to the 
questions. But I want to describe where the program has been 
and where it is going.
    The EM program grew exponentially from 1989 to 1993. 
Funding went from $2.2 billion to over $5 billion. At that 
time, people were projecting a program of $10 billion a year. 
Well, a number of events occurred, including Secretary 
O'Leary's strategic alignment initiative and much more severe 
budgetary pressures. And that meant that the Department had to 
begin to focus on performance and becoming more efficient.
    And from 1993 to 1996, incentive-based contracts were put 
in place, efforts were made to reduce support costs, and more 
work was done in the field, as compared to studies. And that 
has laid the basis for where we are now. And that is an 
opportunity to complete cleanup at most of the DOE sites within 
a decade. That does not mean the large sites, like Hanford or 
Savannah River or Oak Ridge and Idaho, but it means the vast 
majority of the sites can be cleaned, although DOE will 
maintain a stewardship role.

                           program challenges

    The challenges facing this program are formidable, and 
understanding them is central to how we make progress. First of 
all, we are responsible for managing some of the most hazardous 
materials in the world--high-level radioactive waste and 
hundreds of large underground tanks and plutonium inducts and 
other storage mechanisms in our Rocky Flats site, for example.
    Second, we have extremely high fixed costs at some of our 
facilities. And that means that the longer we delay cleanup, 
the more money we spend just paddling water. And third, we must 
comply with numerous----
    Senator Domenici. What does a high fixed cost mean in our 
language?
    Mr. Alm. It means a very high cost for maintenance, for 
security, for safety. In other words, if you can go into a 
building and decontaminate it, your security, your health and 
safety costs, all those costs will go away.
    Senator Domenici. So it is sort of like the landlord costs, 
with us being the landlord of a very dangerous place.
    Mr. Alm. That is right.
    Senator Domenici. OK.
    Mr. Alm. Third, we must comply with numerous, complex 
Federal and State environmental laws, regulations, compliance 
agreements, court orders, and the recommendations of the 
Defense Nuclear Facilities Safety Board. So these basic 
challenges really drive the modus operandi of the environmental 
management program. We are trying to meet these challenges in a 
manner that involves States, tribes and the public in on open 
decisionmaking process.

                             ten-year plan

    To achieve the 10-year goal, three elements are necessary. 
One, stable funding over the period. Stable funding is very 
important if you are going to be able to run a long-term 
management program, so that you can create stability, minimize 
disruptions to the work force, efficiently plan for future 
activities, and optimize the sequencing of work, and, frankly, 
not use all your energies up in the budget game, but rather 
spend your time on management, which I think is very important.
    Second, we need substantial productivity improvements. My 
testimony indicates a number of actions we are taking to reduce 
support costs and to improve the productivity of the complex. I 
have met with the field managers in the EM program, and we have 
been jointly working on two goals--one, a reduction of support 
costs from the present average of roughly 45 percent to 30 
percent. Second of all, we will set annual efficiency targets, 
which means that contractors are going to have to go through a 
period in a contract of continuing improvement, continuing to 
become more efficient.

                             privatization

    The third key element is the privatization initiative. 
Privatization, as we define it, is a form of project financing. 
It is used increasingly around the world to fund water, 
wastewater, and powerplants. We are taking this privatization 
concept and applying it to the DOE program. Under 
privatization, the private sector is responsible for financing, 
designing, building, operating and, finally, disposing of a 
facility. The Government does not pay until the product or 
service is delivered.
    Privatization has a number of advantages. First, it is 
substantially cheaper than the current M&O system. And I think 
it is substantially cheaper for an obvious reason--competition 
always engenders more economic results.
    Second, privatization allows the Government to initiate 
projects earlier, thereby helping to reduce mortgage costs. If 
we cannot do this, and if we have to take these projects and 
push them into the base funding, our ability to pursue mortgage 
reduction will be substantially reduced.
    Third, 75 percent of our 1998 privatization request is 
related to compliance requirements. For example, the tank waste 
remediation system is required under a compliance agreement 
with the State of Washington and the advanced mixed waste 
treatment facility in Idaho is critical to meeting the Idaho 
compliance agreement--upfront funding for these projects is 
extremely important to demonstrate to the financial community 
as well as vendors that the Government is fully committed to 
carrying out the privatization initiative. We are asking 
industry to shoulder more of the inherent risks of our work 
than ever before. And a show of commitment from the Government 
is vital.
    The budget appropriation is an amount that would allow for 
the cost of termination, if termination ever occurred, which we 
hope it never does. The general rule of thumb that we have been 
trying to use is that the amount of budget authority made 
available should be equal to about 1\1/2\ years of operation. 
So you get a little bit of flexibility, although the numbers in 
the budget are not always consistent with that.
    All the elements I have spoken about today, stable funding, 
increases in efficiency, and our privatization initiative, are 
designed to allow us to accelerate the program. Continued 
success in these areas will allow us to invest those funds in 
further mortgage reductions.

                               conclusion

    Let me just conclude by saying that I undertook this job 
with the intention of finding a way to make the program more 
productive and to lay out a long-term vision and plan for 
achievement. And I am convinced that this program is the kind 
of investment the country needs to make. If we do not make 
adequate investments, we are merely going to pay these mortgage 
costs in perpetuity. And that has the effect of leaving a 
larger, not a smaller, long-term obligation on our children and 
grandchildren.
    So I firmly believe that this program is like an 
investment. It is something we need to try and get out of as 
quickly as possible, so that our children and grandchildren 
will be relieved of that obligation and from the risk that 
these facilities pose.
    Thank you very much for this opportunity, and I look 
forward to answering any questions you and the committee may 
have.
    [The statement follows:]

                   Prepared Statement of Alvin L. Alm

    Mr. Chairman and Members of the Subcommittee, I appreciate this 
opportunity to appear before you to discuss the Department of Energy's 
(DOE) Environmental Management (EM) program and its fiscal year 1998 
budget request.
    The fiscal year 1998 budget is a transitional one. We are shifting 
from a program that was projected to span many decades to one designed 
to accelerate cleanup and complete as much work as possible during the 
next ten years. We are implementing strong incentives for contractor 
performance and privatization with a focus on efficiency.
    I have challenged the program managers to develop site Ten-Year 
Plans with a vision of accelerating cleanup schedules to reduce risk 
faster and substantially reduce long-term costs. Large sites such as 
Hanford, the Savannah River Site, Idaho National Engineering and 
Environmental Laboratory and Oak Ridge will take longer than ten years, 
some of them substantially longer, but with the implementation of the 
Ten-Year Plan we can make considerable progress. This vision will drive 
budget decisions, the sequencing of projects, and the management of the 
program.
    Through the first four years of the Clinton Administration, we have 
succeeded in driving down many of the costs of our program while 
increasing productivity. The financial and management changes 
implemented by my predecessor have provided the springboard for the 
program to transition from cleanup to closure in this era of tight 
federal budget resources.
    For the Defense portion of the fiscal year 1998 budget for the 
Environmental Management program, the Department is requesting $5,052 
billion in new budget authority; $1 billion for the privatization 
initiative; and $643 million for the Defense Asset Acquisition Account. 
In the Non-defense portion of the budget, we are requesting $682 
million in new budget authority under our Energy, Supply, Research and 
Development account; $2 million in the Energy Assets Acquisition 
account; and $249 million for the Uranium Enrichment D&D Fund. Although 
the fiscal year 1998 budget was developed prior to the Ten-Year Plan, 
it is being incorporated into the Plan. We are currently reviewing and 
analyzing draft Site Plans submitted to Headquarters on February 28, 
1997, at a summary level. We are exploring opportunities for greater 
productivity, improved sequencing of work, and more efficient 
contracting mechanisms that will reduce the overall cost of the 
program. I have met with the senior field managers and expect the draft 
National Ten-Year Plan to be released for public review and comment 
soon.
    In this testimony, I wish to focus on the following elements of the 
EM program: History; Accomplishments; Challenges; Privatization; and 
Promoting Efficiency through the Ten-Year Plan.
                                history
    Fifty years of manufacturing nuclear weapons in support of World 
War II and the Cold War has left a legacy of environmental 
contamination. The U.S. Department of Energy is comparable to a major 
industrial complex and has been the largest government-owned industry 
in the U.S. The Department's facilities occupy a total area of about 
2.1 million acres--equal in size to the states of Rhode Island and 
Delaware combined. This enormous infrastructure still exists, and is 
largely being maintained and remediated by the Environmental Management 
program, the largest environmental stewardship program in the world.
    The EM program was born in the aftermath of the Cold War. The EM 
budget grew from an initial $1.3 billion in fiscal year 1989 to $6 
billion by fiscal year 1993. At that time, the budget was projected to 
rise to more than $10 billion per year by the year 2000. In fiscal year 
1996, the Department estimated the total cost for stabilizing and 
cleaning up its facilities to be approximately $220 billion over a 70-
year period, depending on the expected future land use and project 
efficiency.
    In June 1996, we set a new goal for cleaning up all but the largest 
contaminated sites within a decade. By establishing the vision of 
completing as much remediation as possible within a decade, we can hope 
to see closure of most sites, and show significant progress on the 
other, larger facilities. Through this strategy, we also believe that 
costs can be substantially reduced by appropriately sequencing 
projects, privatizing activities where appropriate, improving 
efficiency, initiating fixed-price contracts and reducing support 
costs.
                            accomplishments
    The Ten-Year Plan vision is only possible through the financial and 
management improvements made in the program over the last four years. 
Through aggressive management, the program has achieved many milestones 
and made many improvements, including:
  --Replacement of major management and operating contracts with 
        incentive-based contracts at the Idaho National Engineering and 
        Environmental Laboratory, Hanford, Savannah River, and Rocky 
        Flats sites, and a decision to recompete the contracts at Oak 
        Ridge and Mound.
  --Development of completion strategies for Rocky Flats, Fernald, 
        Mound, and Weldon Springs.
  --Reductions in support costs at all sites.
  --Award of major privatization contracts for cleanup of the Hanford 
        high-level waste tanks and for advanced mixed waste treatment 
        at the Idaho National Engineering and Environmental Laboratory.
  --Complete construction and initiation of operation of two 
        vitrification facilities to treat high level wastes--at West 
        Valley, New York and at the Savannah River Site, the largest 
        waste-treatment facility in the world.
  --Completion of the cleanup and transfer of ownership to the private 
        sector of a DOE facility under the Environmental Management 
        program in Pinellas, Florida.
  --Completion of all construction work at the Waste Isolation Pilot 
        Plant at Carlsbad, New Mexico, the first geologic repository 
        for disposal of transuranic wastes, to support operations in 
        fiscal year 1998.
    Overall, we have accelerated the program's activities in the face 
of fewer resources. This has been accomplished through better 
management practices, tailoring the workforce to meet specific needs, 
and innovation by DOE and its contractors.
         challenges facing the environmental management program
    The challenges facing the Environmental Management program are 
enormous, and include:
  --The responsibility to manage extremely hazardous materials, for 
        example, hundreds of large, underground high-level radioactive 
        waste tanks and plutonium throughout some facilities.
  --Extremely high fixed costs to maintain facilities safely and to 
        prevent theft or diversion of nuclear weapons material.
  --The need to comply with numerous, complex requirements under 
        Federal and state environmental laws and regulations; 
        compliance agreements and court orders; Defense Nuclear 
        Facilities Safety Board Recommendations; Departmental orders 
        for worker safety; and International Atomic Energy Agency 
        nuclear nonproliferation safeguards requirements.
    These unique challenges drive the strategies and modus operandi of 
the Environmental Management Program. The Department is meeting these 
challenges in a manner that involves States, Tribes and the public in 
an open decision-making process. To guide these efforts as we move 
toward completion of our work, I have established three strategic 
goals.
Goal I. Reduce the most serious risks first
    Unstable plutonium, spent nuclear fuel and reactor targets, and 
high level waste tanks are the most serious risks at our sites. The 
fiscal year 1998 request addresses these urgent risks directly. The 
budget will also be used to reduce the immediate and long-term storage 
risks associated with the radioactive decay and potential for chemical 
reactions in high-level waste as well as reducing the health and safety 
threat from corroded nuclear materials at a number of our sites, 
including the Savannah River Site, Hanford, the Idaho National 
Engineering and Environmental Laboratory, and Rocky Flats.
    Activities to reduce risks include:
  --Producing up to 200 canisters of vitrified high-level waste at the 
        Savannah River Site and continuing to store the waste in a 
        secure, stable glass form.
  --Removing spent fuel from the K-basin at Hanford.
  --Completing characterization reports for 132 tanks at Hanford which 
        will allow us to move forward with the remediation of the 
        tanks.
  --Reducing the high-level waste inventory at Hanford by evaporating 
        2.2 million gallons of liquid tank waste.
  --Stabilizing 1,350 kilograms (out of 9,800 kilograms) of plutonium 
        metal and oxides at Rocky Flats.
  --Stabilizing 600 canisters of plutonium scrap that could pose a 
        significant danger to workers at the Savannah River Site.
  --Initiating construction of a new plutonium vault at the Savannah 
        River Site for more secure and safe storage.
  --Awarding a contract for a dry spent fuel facility at the Savannah 
        River Site.
  --Completing the calcination of the non-sodium bearing high level 
        waste at the Idaho National Engineering and Environmental 
        Laboratory.
    Subject to authorization from the Environmental Protection Agency 
(EPA) and issuance of a RCRA Part B permit by the New Mexico 
Environment Department, we plan to open the Waste Isolation Pilot Plant 
(WIPP), a geologic repository for transuranic waste in Carlsbad, New 
Mexico. Assuming the required regulatory approvals are obtained, during 
fiscal year 1998, WIPP will receive shipments of transuranic waste from 
the Idaho National Engineering and Environmental Laboratory, the Los 
Alamos National Laboratory in New Mexico, and the Rocky Flats 
Environmental Technology Site in Colorado. Shipments of transuranic 
waste to WIPP will start with two shipments per week, ramping up to 
five shipments each week by the end of fiscal year 1998. Three new 
privatization projects for the transportation and treatment of 
transuranic waste are expected to yield life-cycle cost savings of more 
than $250 million.
Goal II. Reduce mortgage and support costs to achieve cleanup of most 
        sites within a decade
    As landlord and steward for thousands of contaminated buildings, 
facilities, waste streams and land for the Department of Energy, the 
Environmental Management program has enormous costs in simply 
maintaining the complex in its present state. Reducing these huge fixed 
costs is key to both reducing risk and reducing the burden of these 
costs on future generations. We are, however, in an era of decreasing 
federal budget resources. Therefore, it is incumbent upon the 
Department to use existing funding for this monumental task as 
efficiently as possible. EM is taking a number of steps to allocate and 
utilize the taxpayers' dollars in a cost-effective and official manner.
    One important initiative in making the EM program more efficient is 
reducing support costs. Currently support costs are roughly 45 per cent 
of the total costs at EM-managed DOE sites. EM has established a 
``stretch goal'' to reduce support costs to 30 per cent of the total 
costs at EM sites by the year 2000, and to establish an overall 
efficiency target similar to that used in the private sector and invest 
those savings in risk reduction and ``mortgage reduction.''
    The term ``mortgage reduction'' refers to the reduction of fixed 
costs for safely maintaining either a facility or a single project. An 
example of mortgage reduction is the Plutonium Uranium Extraction 
facility (PUREX) at Hanford. A former spent fuel and irradiated target 
reprocessing facility, PUREX was costing $35 million a year to maintain 
in a safe condition. When the facility is completely deactivated in May 
1997, the surveillance and maintenance cost will fall to a little over 
$1 million per year.
    We have used our experiences with PUREX and are applying them to 
the stabilization of the Hanford B-Plant to drive down mortgage costs 
and achieve results. The Hanford B-Plant was the second chemical 
separation canyon built at the Hanford site for the Manhattan Project 
during World War II. In 1995, annual maintenance costs for the B-Plant 
were $18.7 million. We intend to reduce those annual costs to $1 
million or less by complete deactivation of the B-Plant. With a $35 
million investment, the Hanford site expects to avoid $100 million in 
surveillance, maintenance and additional deactivation costs through 
2002.
    Mortgage reduction will occur at all of our sites by speeding up 
cleanup and more efficiently sequencing projects. For example, at Rocky 
Flats, the original life-cycle cost estimate for cleaning up the site 
was $37 billion over a 40 year period. The latest life-cycle cost 
estimate for concluding our work is $6 to $8 billion over a ten-year 
period. There are a number of reasons for the dramatic difference in 
the estimates, including changes in cleanup levels and scope of work. 
However, the acceleration of remediation and sequencing of projects 
results in much of the cost savings.
    Accelerating cleanup at the numerous small sites around the country 
represents another way to reduce fixed costs. We intend to complete 
two-thirds of the small sites, such as the Oxnard Facility in 
California or the Inhalation Toxicology Research Institute and South 
Valley Superfund sites in New Mexico, by the year 2000. By 
expeditiously finishing the small sites, we can avoid significant 
outyear maintenance costs--and turn over more dollars and resources to 
larger, more complex sites.
    Contract reform is also critical to getting more for our dollars. 
Within the Department of Energy, our program is at the forefront of 
contract reform. We believe that increasing competition, using results-
oriented statements of work, improving financial accountability and 
management, increasing the use of fixed-price contracts, and using 
quantitative incentives to motivate the contractors to finish the job 
will help drive down program costs and ensure that we are paying for 
results, not for just ``showing up.'' These kinds of reforms have been 
included in our new performance-based incentive contracts.
    Another important source of cost-savings will be the use of new, 
efficient technologies for treating and cleaning up waste. The 
Environmental Management program is confronted with some of the most 
intractable technical problems in the world. Investing in solutions to 
these problems is crucial to reducing the long-term costs of the 
program. Unlike many hazardous chemical wastes, radioactive waste 
cannot simply be broken down into constituent elements; it requires 
isolation from the environment through treatment and disposal while it 
decays. To continue reducing costs and risks from these wastes, we must 
continue to invest in technology development. But new technologies can 
only be effective if they are deployed in the field. For this reason, 
EM created the Technology Deployment Initiative to promote the rapid 
deployment of innovative technologies currently in the development 
``pipeline,'' as an alternative to using older, less effective 
technologies. This initiative provides incentives for Department 
Operations Offices to use new technologies and innovative approaches to 
expedite site cleanup. The initiative will fund applications of 
``breakthrough'' technologies that meet the needs of multiple sites. By 
reducing and minimizing the financial risk of ``breakthrough'' 
technologies at sites across the complex, cleanups can be accelerated, 
savings can be achieved, and regulatory approval can potentially be 
streamlined by the application of more efficient technologies.
    One other potential for cost savings is through integrating our 
waste treatment and disposal capabilities across the complex. However, 
any such shifts or changes of responsibilities among sites for the 
treatment and disposal of wastes will be controversial. The Department 
cannot make these decisions by itself. We will continue our dialogue 
with the regulators, affected communities and other stakeholders on how 
to achieve an equitable and efficient use of capabilities within the 
complex.
Goal III. Meet regulatory and safety requirements
    DOE will comply with its legal obligations under laws and 
regulations, compliance agreements and with its commitments to the 
Defense Nuclear Facilities Safety Board (DNFSB). As the program 
resources become more limited, innovation and close collaboration with 
regulators and stakeholders will be required to achieve the objective 
of meeting our compliance requirements in the most practical and 
efficient manner possible. We will work closely with regulators and the 
DNFSB to assure that we are able to reach agreement on how to achieve 
this objective.
    The fiscal year 1998 budget funds progress toward the commitments 
we have made under compliance agreements and in response to 
recommendations of the DNFSB. Some of the key highlights in our 
submission include:
  --Demolishing two buildings at the Fernald site.
  --Stabilizing high-level hazardous residues at Rocky Flats.
  --Completing all thorium shipments from the Fernald Site to the 
        Nevada Test Site.
  --Continuing to protect workers and the public by beginning work on 
        upgrading ventilation systems at the Hanford Tank farm.
  --Completing deactivation of B-Plant at Hanford.
    Over the past four years, this Administration has done much to 
involve local communities directly in its Federal programs. DOE has 
established 12 Site Specific Advisory Boards (SSAB's) to advise it on 
the cleanup program and options for meeting its environmental and 
safety obligations. Where cooperation has been closest, this 
``openness'' has reduced costs in some cases. For example, working 
closely with affected communities and regulators has resulted in life-
cycle cost savings of $1 billion at Fernald and $400 million at East 
Fork Poplar Creek at Oak Ridge.
    Ensuring the safety of our workers is a key goal for the Department 
and EM. Historically, the Environmental Management program's safety 
record is better than both the U.S. average and the average for the 
construction industry, but we still have to work harder at 
incorporating safety as a fundamental value in our daily work as the 
cleanup program gathers momentum. We have recently developed a policy 
of ``do work safely or don't do it.'' Environmental Management 
continues to use management practices that incorporate safety and 
health protection as a basic component of all activities.
                             privatization
    Privatization is key to our ability to accelerate the program and 
reduce the mortgage. Under the traditional system, whenever the 
Department needed a product or service, the Management and Operating 
(M&O) contractor at a site would build or procure the needed item or 
service. In effect, the Department would pay for a level of effort plus 
fee. The Department has been increasingly using fixed-price contracts 
and other incentive-based contracting methods to assure the Department 
is obtaining the most effective contracts. Under our privatization 
initiative, contracts are competed with the private sector for the 
product or service, and the government pays for the product or service 
when it is delivered and determined to meet specifications. The 
competitive process alone should sharply reduce the costs of these 
products or services to the Department. This approach should also 
substantially reduce the Department's need to build and maintain its 
own facilities to produce the needed product or service--thus reducing 
the Department's life cycle costs for the project as well as 
potentially reducing near-term outlays. The private sector instead 
provides the funding and assumes many of the risks that were formerly 
borne by the Department.
    The appropriations and authorization requested by the Department 
are necessary for the government to be able to enter into privatization 
contracts. The $1.0 billion budget authority for privatization in this 
year's request is intended to reflect the government's full commitment 
to the privatized projects. Appropriations in the early years for 
privatization projects will primarily cover the costs of the 
government's obligation should it choose to terminate the project prior 
to completion. Actual government outlays would not generally occur 
until the product or service is delivered under the contract as 
specified.
    Some of the major privatization projects we are proposing in fiscal 
year 1998 include:
    Tank Waste Remediation System (TWRS).--DOE has entered into two 
contracts for the treatment of high-level waste in Hanford tanks. In 
fiscal year 1997, Congress enacted $170 million for this activity, 
while the fiscal year 1998 budget requests $427 million. The Hanford 
TWRS project is proceeding consistent with a compliance agreement with 
the Washington Department of Ecology and the EPA.
    Advanced Mixed Waste Treatment Project (AMWTP).--At the Idaho 
National Engineering and Environmental Laboratory, the Department has 
entered into a contract with British Nuclear Fuels Limited, Inc. to 
treat mixed waste. The total estimated cost of this project is $1.18 
billion. Seventy million dollars have been obligated to the contract 
for fiscal year 1998. The cost savings are anticipated to be in the 
hundreds of millions of dollars over the cost-plus approach.
    Spent Nuclear Fuel Transfer and Storage.--At the Savannah River 
Site, an open fixed-price competitive procurement will be used to 
select a contractor to prepare spent nuclear fuel for interim dry 
storage in a ``road-ready'' form for shipping to and disposal at a 
Nuclear Regulatory Commission licensed geologic repository. The 
contractor will also be responsible for the deactivation and clean-out 
of the required facilities.
    Spent Nuclear Fuel Dry Storage.--At the Idaho National Engineering 
and Environmental Laboratory. The Department will be privatizing the 
construction of a spent nuclear fuel dry storage facility. This project 
will provide the capabilities to initiate interim dry modular storage 
of spent nuclear fuel assemblies at the site.
               promoting efficiency in the ten-year plan
    Achievement of the Ten-Year Plan requires the same elements as 
those driving the fiscal year 1998 budget, namely, reducing urgent 
risks, reducing fixed costs, meeting regulatory commitments and working 
collaboratively with regulators and stakeholders. In addition, the Plan 
requires stable funding and substantial productivity improvements. We 
plan to achieve these productivity improvements through the following 
mechanisms:
  --``Projectize'' the entire EM program, i.e., shift from current open 
        ended activities to focused efforts to achieve a specific end 
        result. This is expected to significantly improve efficiency by 
        eliminating work not directly needed to achieve completion of 
        the project.
  --Establish a ``stretch goal'' for EM sites to reduce support costs 
        from 45 percent in 1997 to approximately 30 percent of the 
        total by the year 2000, and to achieve efficiency improvements 
        equal to those of the private sector.
  --Compare EM waste management operations to similar private sector 
        operations in order to streamline EM's waste management 
        business practices and activities.
  --Fund the Army Corps of Engineers to review all baselines to seek 
        opportunities for cost reductions.
  --Review integration opportunities designed to take advantage of 
        inter-site efficiencies and avoid duplication among sites.
  --Benchmark our costs against those of the private sector and other 
        similar government programs.
  --Shift from level of effort to fixed price and incentive contracts.
  --Conduct site ``work-outs'' where we assemble federal and state 
        regulators, site, headquarters, and local advisory board 
        representatives with all the necessary information to break 
        through each of the perceived stumbling blocks to progress and 
        achieve further cost savings.
  --Initiate a joint effort with EPA to look for administrative and 
        regulatory changes to improve efficiency.
    To implement the Ten-Year Plan, EM is establishing a new Integrated 
Planning, Accountability and Budgeting System (IPABS) to establish 
quantitative goals and metrics to track progress. The new integrated 
management system will use projects as the basic measures of progress, 
assuring a focus on completion, rather than on perpetual activities. 
The new system will also eliminate current management and tracking 
systems, reviews, and reports that are duplicative.
      status of headquarters/environmental management redeployment
    The EM Redeployment Initiative is following several courses of 
action to achieve a reduced headquarters workforce that is appropriate 
for the changing mission and the new relationship we will have with the 
field offices. The initiative is consistent with the Department's 
Strategic Alignment Initiative (SAI), and the National Performance 
Review recommendations. First, EM has facilitated the transfer of 
individual EM Headquarters personnel to field offices, when vacancies 
exist, consistent with the need to enhance the federal workforce in the 
field where the work is being done. Second, EM has determined that 
certain national programs could be more effectively conducted in the 
field and has chosen to establish Centers of Excellence in certain 
technical areas as well. EM also is transferring headquarters employees 
to the field to help staff these centers. Finally, EM has aggressively 
pursued job opportunities for its headquarters staff at other Federal 
agencies such as the Environmental Protection Agency and the Nuclear 
Regulatory Commission to further reduce the headquarters workforce. If 
these efforts do not achieve the results desired, EM will initiate a 
reduction in force to bring Headquarters employment down to appropriate 
levels.
                           uncosted balances
    Environmental Management's uncosted balances have declined steadily 
over the past few years. In fiscal year 1996 alone, EM reduced its 
uncosted balances by $535 million. In addition, we carried forward $150 
million in uncosted balances from fiscal year 1996 to fiscal year 1997 
as an offset to our budget authority. However, with the fiscal year 
1998 budget request, EM is discontinuing the practice of offsetting new 
budget authority with uncosted carryover because excess uncosted 
balances are unlikely to be available. Uncosted balances at the end of 
fiscal year 1996 were $1.3 billion and were within reasonable levels 
recognized by the General Accounting Office. We will continue to 
monitor the uncosted balances to ensure that the balances remain as low 
as possible and are tied to essential work scope.
                               conclusion
    The Environmental Management program is setting an ambitious agenda 
for the future. The objective to clean up much of the former weapons 
complex within ten years will involve a strong commitment to cut 
unnecessary costs and improve efficiency. Even with such an effort, a 
substantial amount of work will still need to be undertaken beyond 2006 
at larger DOE sites.
    Failure to reduce the high fixed costs of this program through 
reducing the mortgages will result in much greater long-term costs to 
the taxpayer. Failure also will transfer both the risks and the costs 
of maintaining this deteriorating system to our children and 
grandchildren. Our Environmental Management program meets our 
obligation to provide sound technical and financial investments to 
resolve the environmental legacy of the Cold War. I look forward to 
working with you on these most important challenges.
                                 ______
                                 

                               Appendix A

          status of sites in environmental management program
                                hanford
    The Hanford Site, the nation's first full-sized plutonium 
production operation, encompasses 560 square miles in southeastern 
Washington. The site contains production reactors, processing plants, 
fuel fabrication buildings and laboratories, and many other associated 
facilities. Hanford is the site of some of our most urgent risks--
including hundreds of large, underground high level radioactive waste 
tanks, some of which have leaked, and some of which may pose a danger 
of explosion unless properly managed. The current and future mission of 
the site is to manage the facilities and inventories of special nuclear 
materials and to remedy the environmental contamination caused by 
activities related to plutonium production. The Tri-Party Agreement 
signed between the DOE, the State of Washington, and the Environmental 
Protection Agency in 1989, and amended most recently in 1996, provides 
a schedule for site activities to achieve compliance for major waste 
streams managed at the site. Activities conducted under the Ten-Year 
Plan will dramatically accelerate the pace of the cleanup as well as 
drive down the long-term costs at the site.
Accomplishments through fiscal year 1997
    Completed stabilization of the PUREX reprocessing canyon to a low 
surveillance and maintenance state.
    Completed decontamination of all areas in the C-Reactor complex 
except the fuel basin and Safe Storage and Enclosure Area.
    Began treatment of low-level waste at the Effluent Treatment 
Facility.
    Safely stored 55 million gallons of high level waste.
    Accelerated the Hanford spent nuclear fuel stabilization project 
for a total project cost reduction of $300 million.
    Completed construction of the Environmental Restoration Disposal 
Facility (ERDF) three months ahead of schedule and approximately $20 
million below the original estimated cost.
    Completed deactivation of the remaining 14 facilities at the N-
Reactor in preparation for decommissioning.
    Deployed a new robotic arm (Light Duty Utility Arm) to characterize 
Hanford Tank T-106, demonstrating capability for future 
characterization and retrieval operations.
Fiscal year 1998 major commitments
    Remove 282,000 loose cubic yards of contaminated soil from the 100/
300 Areas and dispose at ERDF.
    Complete stabilization of the B-Plant Canyon Facility to a low 
surveillance and maintenance state with a cost savings of $100 million 
over the fiscal year 1995 baseline.
    Evaporate 2.2 million gallons of liquid tank waste to reduce the 
need for additional tank space and stabilize 5 single-shell tanks.
    Complete Hanford Tank Initiative preparations for ``hot'' 
deployment of technologies to remove hardened waste in tank bottoms.
    Complete removal of spent nuclear fuel from the K-Basin.
    Complete characterization reports on 132 of 177 tanks (75 percent 
completed).
    Award four contracts to private sector vendors to ``cold'' 
demonstrate the ability to remove hardened waste at tank bottom, a 
problem common to tanks across the complex.
    Complete dilution of 230,000 liters of highly enriched uranium 
solution for conversion to low enriched uranium oxide.
    Continue stabilization of plutonium residues in various forms; 
repackage plutonium for safe storage.
    Finalize regulatory disposition of abandoned septic systems.
    Open the Hazardous Materials Management and Emergency Response 
Training (HAMMER) Center.
Privatization for fiscal year 1998
    Tank Waste Remediation System (TWRS)--DOE is privatizing the 
treatment and vitrification of approximately 56 million gallons of 
high-level radioactive waste that is currently stored in 177 tanks at 
the Hanford site. The first phase of the two phase project was 
initiated with the award in 1996 of contracts to British Nuclear Fuels 
Limited, Inc. and Lockheed Martin Advanced Environmental Services. By 
increasing competition and the participation of vendors with diverse 
skills, the Department expects technology innovation that will lead to 
better solutions in hazardous waste management and cleanup problems and 
reduce costs and risks.
Progress expected by 2006
    Urgent risks eliminated.
    Tank waste immobilization underway.
    Spent nuclear fuel removed from near the Columbia River to safer 
storage.
    Complete interim safe storage of four reactors.
    Cleanup along river near completion.
    PUREX and B-Plant deactivated.
        idaho national engineering and environmental laboratory
    The Idaho National Engineering and Environmental Laboratory (INEEL) 
is a multi-purpose DOE laboratory that encompasses 890 square miles in 
southern Idaho. The site manages a large amount of spent nuclear fuel, 
transuranic, and high-level waste. The Laboratory's Environmental 
Management program is driven in large part by a cleanup agreement (the 
Federal Facility Agreement) established under CERCLA and the 1995 
Settlement Agreement between the State of Idaho, the Department of 
Energy (DOE) and the Department of the Navy. The Settlement Agreement 
accelerated waste treatment and disposal of spent nuclear fuel, 
transuranic waste, and high-level waste. The agreement requires the 
Department to begin transuranic waste shipments to WIPP by April 1999, 
and to remove all spent nuclear fuel from the state by fiscal year 
2035. It allows the Navy to resume shipping spent fuel to Idaho to 
enable naval warships to perform their national security mission, and 
provides for essential DOE spent fuel shipments to occur over the next 
several years.
    Other key elements of the settlement agreement include: continuing 
shipments of Naval spent nuclear fuel shipments to INEEL for 
examination and storage; allowing for DOE shipments of spent fuel for 
purposes such as nuclear nonproliferation and national security; 
accelerating waste treatment and cleanup in Idaho; establishing INEEL 
as the DOE complex-wide lead laboratory for spent fuel research and 
development; and provisions for improved (dry) storage of existing 
spent nuclear fuel at INEEL.
Accomplishments through fiscal year 1997
    Began retrieval of TRU waste to prepare for early shipment to WIPP.
    Completed construction and initiated operation of the Vapor Vacuum 
Extraction Treatment System which will accelerate groundwater cleanup.
    Evaporated 330,000 gallons of high-level liquid waste, meeting a 
key settlement agreement milestone.
    Restart new waste calcining facility.
    Decommission Auxiliary Reactors II & III.
    Completed capping of Landfills I, II, & III.
    Awarded contract for Phase I privatization for the Advanced Mixed 
Waste Treatment Facility (AMWTF) to treat transuranic (TRU) and mixed 
low-level waste.
    Completed incineration of mixed-low level waste backlog.
    Signed the first Record of Decision (ROD) for Waste Area Group 2, 
which signifies the end of assessment and beginning of ``on the 
ground'' clean-up.
Fiscal year 1998 major commitments
    Complete calcining of non-sodium-bearing high level liquid waste to 
meet a key Settlement Agreement milestone.
    Subject to obtaining required regulatory approvals, initiate TRU 
shipments to WIPP.
    Operate high-level liquid waste evaporator to reduce Tank Farm 
volume by 330,000 gallons.
    Receive and store foreign research reactor fuel in support of the 
Administration's non-proliferation initiatives.
    Complete removal of all remaining spent nuclear fuel from Idaho's 
CPP-603 (Chemical Processing Plant) fuel storage facility 
(approximately 250 spent fuel assemblies and cans containing pieces of 
assemblies), 1.13 metric tons of heavy metal).
    Complete deactivation of the Advanced Reactor Measurement facility 
which will transfer degrading fuel elements to safer storage.
Privatization for fiscal year 1998
    Low Activity Waste Treatment Facility.--A private contractor will 
design, obtain permits, construct and operate the Low Activity Waste 
Treatment Facility to treat and dispose of seven million gallons of 
liquid low activity mixed waste to meet RCRA land disposal restriction 
requirements.
    Power Burst Facility Deactivation.--The project will take the Power 
Burst Facility, a shut down test reactor, from its shut down and 
defueled condition, to an end point ready for decontamination and 
decommissioning of the facility and surrounding areas.
    Spent Nuclear Fuel Dry Storage.--This project will provide the 
capabilities to initiate interim dry modular storage of spent nuclear 
fuel assemblies at the site.
Progress expected by 2006
    All DOE spent fuel will be transferred from wet storage to dry 
storage, awaiting shipment to a national spent fuel repository except 
for some naval fuel, which will remain in wet storage.
    Fifty percent of the high-level liquid waste will be stabilized. 
Two of eleven high-level waste tanks will be closed.
    Processing of stored transuranic waste will be ongoing with the 
treated product shipped to WIPP.
    Environmental restoration projects will be complete at five of 
eight Waste Area Groups and significant work will be ongoing for 
transuranic waste pits and trenches (WAG 7).
                            nevada test site
    The Nevada Test Site, located on 1,350 square miles in the Nevada 
desert, was the site for many of the country's above ground and 
underground nuclear tests. Since the 1992 weapons testing moratorium, 
the site has focused on remediating inactive sites and facilities 
contaminated during earlier testing activities. Low-level radioactive 
waste that originates from the site and from other DOE sites is 
disposed of on site. The contamination that resulted from historic 
nuclear testing activities poses a significant environmental 
remediation challenge for the site.
Accomplishments through fiscal year 1997
    Signed the Federal Facility Agreement/Consent Order with State of 
Nevada.
    Completed Double Tracks Plutonium soils remediation.
    Completed Underground Test Area (UGTA) Regional Groundwater Flow 
and Transport Model and Regional Risk Assessment--a model indicates 
that tritium may already be offsite to the west of Pahute Mesa and 
above drinking water standards.
    Completed Rulison Mud Pond Voluntary Corrective Action remediation.
    Completed installation of shallow groundwater wells at Salmon Site 
to monitor contamination.
    Removed 9 Underground Storage Tanks; completed closure of one RCRA 
site and characterized two more; remediated two sites on Tonapah Test 
Range.
Fiscal year 1998 major commitments
    Seven assessments, including the Corrective Action Decision 
Document for Clean Slates I and the final Corrective Action 
Implementation Plan for Frenchman Flat.
    Five Remedial Actions, including Closure Reports for five Points 
Landfill and Double Tracks Plutonium soils site.
    Remediation of Clean Slate I, which are contaminated with 
plutonium.
    Remediation of the Area 6 Decontamination Pond.
    Remedial activities at two septic tank/sewage lagoons.
Progress by 2006
    All cleanup sites characterized and significant progress made on 
accomplishing remediation.
    Low-level waste shipped from currently approved generators will be 
disposed.
    Characterization and shipment of all Nevada Test Site legacy TRU 
waste to the WIPP.
               rocky flats environmental technology site
    The Rocky Flats Environmental Technology Site, located 
approximately 16 miles northwest of Denver, comprises approximately 11 
square miles. Until 1989, the site's primary mission was to produce 
nuclear weapons components manufactured from uranium, plutonium and 
other metals. In 1992, the primary mission of the site changed from 
nuclear weapons production to cleanup and restoration. Rocky Flats' 
mission now focuses on waste and nuclear materials management, 
environmental remediation, and deactivation and conversion of 
facilities for disposition or alternative uses. The highest priority at 
Rocky Flats continues to be the protection of workers, the public and 
the environment from exposure to plutonium and other hazardous 
materials, and to safeguard plutonium.
Accomplishments through fiscal year 1997
    Complete installation of the Plutonium Stabilization and Packaging 
Prototype in Building 707.
    Completed draining plutonium solutions from all low-level tanks in 
one of our most urgent risk buildings (14 tanks total have been 
drained), and drained four higher concentration plutonium/uranium 
solution tanks.
    Prepare TRU waste at Rocky Flats for shipment to WIPP.
    Completed work on 8 of the top 20 Individual Hazardous Substance 
Sites, including 3,700 cubic yards of soil, 6 leaking concrete vaults 
and tanks, and shipped 2,500 gallons of solvent-contaminated oil for 
incineration.
    Completed accelerated removal activities for the mound area and 
other release sites to reduce on-site contamination in Operable Unit 2 
and the buffer zone.
    Completed new sanitary landfill.
    Designed and fabricated major upgrade of Plant Fire/Security System 
to meet National Fire Protection standards to ensure the safety of the 
workforce and the public.
Fiscal year 1998 major commitments
    Complete plutonium solution stabilization in Building 771, with 
stabilization of approximately 3,000 liters of solution.
    Stabilize 1,350 kilograms (out of 9,800 kilograms) of plutonium 
metal and oxides.
    Operate Plutonium Stabilization and Packaging Prototype and full 
scale operation of the high-risk residue processing system.
    Complete DNFSB 94-3 upgrades to Building 371 for the interim 
storage of plutonium.
    Initiate shipments of TRU waste to WIPP.
Privatization for fiscal year 1998
    Decontamination and Decommissioning of Buildings 779 and 886--The 
vendors will finance and provide systems for the complete 
decommissioning and dismantlement of the Buildings 779 and 886 
clusters, which were used as a plutonium development laboratory and 
uranyl nitrate processing facility respectively.
Progress by 2006
    The vast majority of site facilities will be demolished, leaving 
only facilities that are in use for the storage of special nuclear 
material, treatment of low-level waste and several office buildings.
    Low-level, mixed low-level, and transuranic waste will be shipped 
offsite.
    All highly enriched uranium will be removed from the site.
    All plutonium stabilization activities will be completed.
    Shipments of pits and weapons component parts offsite will be 
completed.
    Deactivation of most major plutonium facilities will be complete.
    Final environmental restoration activities will be initiated.
                          savannah river site
    The Savannah River Site, located on 310 square miles in south-
central South Carolina, was established to produce special radioactive 
isotopes for nuclear weapons, particularly tritium and plutonium. With 
the end of the Cold War, the mission of the site changed from national 
defense to environmental management. Despite this shift, the Savannah 
River Site remains a major defense installation capable of processing 
and purifying tritium and plutonium. The site also plays an important 
role in support of the nation's nonproliferation policy by storing 
urgent relief foreign research reactor spent nuclear fuel.
Accomplishments through fiscal year 1997
    Began operating the Defense Waste Processing Facility (DWPF) in 
March 1996 and to date, have produced over 100 canisters of vitrified 
waste.
    Completed closure of first high-level waste tank at Savannah River. 
Initiated stabilization of spent nuclear fuel containing 7.3 metric 
tons of heavy metal.
    Completed dissolving spent fuel targets containing 147 metric tons 
of heavy metal helping to place the Department's fuel in a safe 
configuration.
    Began F and H Canyon retention basin groundwater treatment system 
operations to meet regulatory goals of groundwater cleanup to drinking 
water standards.
    Completed construction of Low Level Radioactive Waste Disposal 
Facility (LLRWDF) closure cap at A and D Areas.
    Installed 12 recirculation wells to remediate M Area southern 
sector to remove volatile organic compounds from the groundwater.
    Completed soil capping at burial ground complex (76 acres) as an 
interim closure action to prevent the spread of hazardous constituents.
    Completed early removal action at the R-Reactor seepage basin and 
the Ford Building waste unit for risk reduction of groundwater 
contamination.
    Will reach a decision on utilization of the F and H Canyons.
Fiscal year 1998 major commitments
    Produce 125-200 canisters of vitrified high level waste at DWPF.
    Reduce the high level waste inventory through evaporation.
    Stabilize 600 canisters of plutonium scrap that could pose a 
significant danger to workers.
    Complete large-scale decontamination and decommissioning 
demonstrations started in fiscal year 1996, including the C-Reactor 
Interim Safety Storage demonstration.
    Continue stabilizing plutonium residues in various forms; repackage 
plutonium for safe storage.
    Receive and store foreign research reactor fuel in support of the 
Administration's non-proliferation initiatives.
    Complete remediation of the D and F Area Pits.
    Complete domestic water upgrades project to comply with South 
Carolina drinking water regulations.
    Initiate remediation construction associated with the Old F Area 
Seepage Basin and F/H Retention Basins.
    Complete remediation of sanitary landfill.
Privatization in fiscal year 1998
    Spent Nuclear Fuel Transfer and Storage.--An open fixed-price 
competitive procurement will be used to select a contractor to prepare 
aluminum-clad spent nuclear fuel rods for interim dry storage in a 
``road-ready'' form prior to shipping and disposal at a Nuclear 
Regulatory Commission licensed geologic repository. The contractor will 
also be responsible for the deactivation and clean-out of the required 
facilities.
Progress by 2006
    Cleanup action for all high-risk environmental restoration sites 
will be completed, leaving only 20 medium risk waste sites to be 
remediated.
    Approximately one-third of total high-level waste will be 
vitrified.
    High-level waste from all 24 high-risk tanks will be removed and 75 
percent of the highest risk waste tanks will be closed.
    All of the nuclear materials stabilization and storage will be 
completed.
                fernald environmental management project
    The Fernald Environmental Management Project (FEMP) site, located 
17 miles northwest of Cincinnati, Ohio, covers approximately 1,050 
acres. From 1953 to 1989, the site produced uranium metals and 
compounds for the nation's defense program. The FEMP was placed on the 
National Priorities List in November, 1989. In 1991, operations were 
halted permanently. The site's main mission is to remediate the site 
and any off-site contamination. All interim removal actions have been 
completed to address immediate site risks. Remediation of all the 
operable units will be initiated by the end of fiscal year 1997.
Accomplishments through fiscal year 1997
    Initiate Advanced Waste Water Treatment Expansion to process water 
from the extraction wells, and initiate construction of the 
regeneration system that includes the ion exchange.
    Process and dispose of 400,000 cubic feet of waste.
    Initiate soil remediation in Areas I and II and manage soil 
stockpiles.
    Use a new solvent extraction technology (Terra-KleenTM ) 
to completely eliminate tri-mixed waste stream.
Fiscal year 1998 major commitments
    Process and dispose of 190,000 cubic feet of low-level waste.
    Begin work on Plant 9 and the Thorium package, and complete work on 
the Boiler Plant Complex for D&D.
    Complete stabilization of remaining Thorium over packing material 
at Fernald.
    Begin construction of the volatile organic compound treatment 
system; begin construction of pipeline and complete the Advanced Waste 
Water Treatment expansion; continue construction of the regeneration 
system, and initiate construction of the Sewer Treatment Plant in order 
to provide waste water treatment systems and well field activities in 
the South Field Area.
Privatization in fiscal year 1998
    Waste Pits Remedial Action.--The Department will privatize the 
design and construction of a contractor-owned and operated facility for 
the excavation, processing, treatment, and load out for off-site 
shipment and disposal of approximately 700,000 tons of low-level 
radioactive waste from 8 waste pits.
    Silo 3 Waste Treatment.--This initiative will fund a contractor to 
design, permit, finance, construct and operate treatment facilities. 
The contractor will process, package, ship and dispose of approximately 
5,100 cubic yards of powdery, thorium-bearing residues from Silo 3.
Progress by 2006
    Complete majority of cleanup actions.
    Follow-on work will only require pump-and-treat of groundwater, and 
monitoring in accordance with the Comprehensive Environmental Response, 
Compensation, and Liability Act.
                      waste isolation pilot plant
    The Waste Isolation Pilot Plant (WIPP) is a geologic repository for 
transuranic wastes from nuclear weapons production activities. The site 
is located 26 miles from Carlsbad, New Mexico, and occupies 10,240 
acres. Subject to receiving required regulatory authorization from the 
Environmental Protection Agency and the New Mexico Environment 
Department, disposal operations at WIPP will begin in fiscal year 1998. 
Opening of the WIPP is critical to the success of the EM Ten-Year Plan 
as well as to meeting the commitments of the Idaho Settlement Agreement 
(i.e., requirement to begin shipping transuranic waste from Idaho by 
April 1999, and remove all transuranic waste from Idaho by 2035). 
Shipments of transuranic waste to WIPP will start at a rate of two per 
week, ramping up to five shipments each week by the end of fiscal year 
1998.
Accomplishments through fiscal year 1997
    Submitted WIPP compliance certification application to EPA.
    Continue actinide source term and gas generation tests and analysis 
for performance confirmation.
    Issue final Environmental Impact Statement for the disposal stage.
Fiscal year 1998 major commitments
    Seek EPA certification of WIPP's compliance with disposal 
standards.
    Obtain RCRA permit to operate WIPP
    Secretarial decision on whether to operate WIPP as a disposal 
facility.
    Begin TRU waste disposal operations (two shipments per week to 
start ramping up to five shipments per week by the end of fiscal year 
1998).
Fiscal year 1998 privatization
    Contact-Handled TRU Waste Transportation.--The fixed-price contract 
will be for a private vendor to provide for transportation of TRU waste 
from DOE generator/storage sites across the country to WIPP in Nuclear 
Regulatory Commission-certified containers.
Progress by 2006
    Continued active operation of WIPP.
                         oak ridge reservation
    The Oak Ridge Reservation consists of several major sites in the 
state of Tennessee, and several off-site locations. The three main 
sites include the Y-12 site, which supports manufacturing and 
development engineering associated with the production and fabrication 
of nuclear weapons components; the Oak Ridge National Laboratory 
(ORNL), whose mission is to perform leading-edge nonweapon research and 
development; and the K-25 site, which was built to supply enriched 
uranium for nuclear weapons production. During its 50 years of 
operation, portions of the Oak Ridge Reservation have become 
contaminated with radioactive and hazardous materials. Remediation of 
the sites is now a key mission.
Accomplishments through fiscal year 1997
    Treated 1,200 cubic meters of mixed low-level waste.
    Perform a ``hot'' demonstration of a mobile, modular system for 
removal of cesium from the Melton Valley Storage Tank waste, which is 
also applicable to the high-level waste at the Savannah River Site, 
Hanford, and Idaho National Engineering and Environmental Laboratory.
    Continue decommissioning Molten Salt Reactor Experiment to comply 
with Defense Nuclear Facilities Safety Boards recommendation 94-1 
(requires stabilization of radioactive and hazardous materials as a 
first priority).
    Use a new electro-osmosis process (LASAGNATM ) to 
collect contaminants from the soil at the Paducah Gaseous Diffusion 
Plant in Kentucky.
Fiscal year 1998 major commitments
    Treat approximately 1,000 cubic meters of mixed low-level waste at 
the TSCA incinerator.
    Dispose of 678 cubic meters of low-level waste.
    Complete construction of the on-site disposal cell at Weldon 
Springs and placement of waste.
    Continue remediation activities at Clinch River, Poplar Creek and 
Watts Bar Reservoir.
    Complete decommissioning of 35 facilities.
    Complete removal of liquid and sludge from the Old Hydrofracture 
Facility Tanks.
Privatization for fiscal year 1998
    TRU Waste Treatment.--DOE will transfer remote-handled TRU sludge 
from 13 tanks at ORNL to eight storage tanks that contain the majority 
of the sludge. A private company will be contracted to remove and treat 
transuranic sludge from the tanks, and the Oak Ridge solid TRU waste to 
meet WIPP waste acceptance criteria or Nevada Test Site waste 
acceptance criteria.
    Environmental Management Waste Management Facility.--The Department 
will purchase waste disposal services from a private vendor for the 
site's low-level, hazardous, mixed and Toxic Substances Control Act 
wastes.
Progress by 2006
    Lease all leasable K-25 facilities; decommission the unleasable 
facilities.
    Complete off-site remedial action.
    Complete gunite tanks remedial action.
    Complete nuclear materials and facility stabilization project.
                                 ______
                                 

                               Appendix B

 analysis of the office of environmental management budget by program 
                                  area
    The Environmental Management program is organized into four major 
program offices: Waste Management, Environmental Restoration, Nuclear 
Material and Facility Stabilization, and Science and Technology 
Development, to carry out the core missions of the Environmental 
Management program, with assistance from other Departmental offices. 
Our fiscal year 1998 program commitments are provided in Appendix A.
    The Department is requesting $7,246,635,000 in new budget authority 
for fiscal year 1998. This includes $5,052 billion in new budget 
authority under the Defense account. We are requesting $682 million in 
new budget authority under our Energy, Supply, Research and Development 
account; $1 billion for the privatization initiative; $643 million for 
the Defense Asset Acquisition Account; $2 million in the Energy Assets 
Acquisition account; and $249 million for the Uranium Enrichment D&D 
Fund.
    This budget falls under six separate accounts: the Energy Supply 
Research and Development account (roughly 9 percent of the budget); the 
Defense Environment Restoration and Waste Management portion of the 
Atomic Energy Defense Activities account (roughly 66 percent of the 
budget); and the Uranium Enrichment Decontamination and Decommissioning 
(D&D) Fund account (roughly 3 percent of the budget). Beginning in 
fiscal year 1998, funding is being requested in three new 
appropriations accounts: the Privatization account (roughly 13 percent 
of the budget); the National Defense Assets Acquisition account 
(roughly 8 percent of the budget); the Energy Assets Acquisition 
account (roughly 1 percent of the budget).
                            waste management
    Budget Request: $2,068,798,000 (27 percent of the total 
Environmental Management budget)
    In fiscal year 1998, the Waste Management Program will continue its 
efforts to manage safely and efficiently the storage, treatment, and 
disposal of the Department's wastes. Waste streams managed by the Waste 
Management Program include high-level, low-level, mixed low-level, 
transuranic, and hazardous wastes. With a focus on mission completion 
as defined by the Ten-Year Plan, the Waste Management Program will 
direct its efforts toward moving more waste out of storage and into 
treatment and disposal. Process improvements, including privatization 
and re-engineering, will contribute significantly to achieving the 
program's Ten-Year Vision.
    In fiscal year 1998 more high-level waste and mixed low-level waste 
will be treated than in fiscal year 1997, while the budget for both 
waste streams will be lowered. At the Savannah River Site, the 
production of canisters of vitrified high-level waste will increase as 
the Defense Waste Processing Facility approaches steady-state 
operations. At West Valley, the Phase I Vitrification campaign will be 
completed. The award of a privatization contract through the Oak Ridge 
Operations Office will enhance the Department's access to commercial 
treatment of mixed low-level waste. The Consolidated Incineration 
Facility at the Savannah River Site will also commence operations, 
increasing the Department's capacity for the treatment of mixed low-
level waste. More low-level waste will be disposed in 1998 than in 
1997, and at a lower cost.
    A key element of the program's success for fiscal year 1998 will be 
the start-up of disposal operations at the Waste Isolation Pilot Plant 
(WIPP) is required regulatory approval is obtained. In such case, WIPP 
will receive shipments of transuranic waste from the Idaho National 
Engineering and Environmental Laboratory, the Los Alamos National 
Laboratory in New Mexico, and the Rocky Flats Environmental Technology 
Site in Colorado. Shipments of transuranic waste to WIPP will start 
with two per week, increasing to five shipments each week by the end of 
fiscal year 1998. Three new privatization projects for the 
transportation and treatment of transuranic waste will yield life-cycle 
cost savings of more than $250 million.
    Stabilization of the high-level waste in the Richland underground 
tanks will continue to be a high priority. More than two million 
gallons of liquid tank waste at Richland will be evaporated and five of 
the single-shell tanks will be stabilized. The calcining of non-sodium-
bearing high-level liquid waste at Idaho will be completed.
    A pilot program for the re-engineering of Waste Management's 
treatment, storage, and disposal system will be initiated in fiscal 
year 1998. Approximately $16 million will be transferred to other DOE 
programs that generate waste for the management of their newly 
generated waste. By returning managerial and financial responsibility 
to the mission program, waste generation and overall program cost will 
be reduced. The five pilot programs will include Fermi, Argonne 
National Laboratory-West, the Stanford Linear Accelerator Center, the 
Kansas City Plant, and tritium operations at the Savannah River Site.
                       environmental restoration
    Budget Request: $2,450,986,000 (32 percent of the total 
Environmental Management budget)
    The Office of Environmental Restoration, with the largest 
percentage of the fiscal year 1998 budget request, is responsible for 
the assessment and remediation of facilities and land formerly used for 
nuclear weapons production, as well as other inactive sites. These 
sites include contaminated buildings, and abandoned or inactive waste 
disposal sites. Environmental Restoration (ER) is sometimes referred to 
as the Environmental Management ``cleanup program''.
    The ER program has made considerable progress in continuing to 
increase the amount of funds that are spent on cleanup activities and 
by focusing these funds on achieving near term results. Cleanup 
progress has been realized by completing all ER cleanup 
responsibilities at various geographic sites across the nation and by 
continuing to make progress at individual release sites (discrete areas 
of contamination within a geographical site) and facilities 
(contaminated structures). By the end of fiscal year 1998, 
approximately 4,400 of 10,000 release sites and facilities will be 
completed (approximately 44 percent).
    The Environmental Restoration program is contributing to the 
overall EM effort of moving toward completion and reducing the long-
term mortgage costs in a number of ways. Besides the ongoing large-
scale remediation work at our larger sites (e.g., Hanford or the 
Savannah River Site), Environmental Restoration has had marked success 
with our ``Exit Strategy'' for small sites that includes the Uranium 
Mill Tailings Remedial Act (UMTRA) program and Formerly Utilized Sites 
Remedial Action Programs (FUSRAP). By the end of fiscal year 1998, EM 
will complete cleanup of 45 small sites, leaving only fifty small 
sites. More specifically, out of the 46 total FUSRAP sites, 23 sites 
will have been ``cleaned up'' as of the end of fiscal year 1998. By 
fiscal year 2000, we expect to clean up 5 more sites. Our goal is to 
complete the FUSRAP cleanup by 2002. Accelerating the pace of cleanup 
at these sites and reducing the costs of maintaining them over time 
will free up dollars to be reinvested in the longer-term issues.
    The cleanup program is on track to continue its efforts in the most 
efficient, safe, and effective manner. Performance measures are in 
place to accurately gauge our progress. We believe that our results 
orientation will ensure that our cleanup milestones are met in 
compliance with negotiated agreements and with the support of the 
public and stakeholders.
              nuclear material and facility stabilization
    Budget Request: $1,374,615,000 (18 percent of the total 
Environmental Management budget)
    The mission of the Nuclear Material and Facility Stabilization 
program is to reduce the high-risk conditions associated with unstable 
nuclear and chemical materials stored at former nuclear weapons 
production facilities and to reduce the surveillance and maintenance 
costs associated with surplus buildings waiting for decontamination or 
final disposition. Protection of workers and the environment from 
exposure and contamination, the stabilization of hazardous nuclear and 
chemical materials, deactivation of facilities to attain the lowest 
surveillance and maintenance costs, and transfer of facilities to the 
Office of Environmental Restoration for decontamination and 
decommissioning, are among the myriad activities. This program deals 
with some of the Department's highest risks: plutonium and spent 
nuclear fuel.
    This program is working to address urgent risks to protect the 
health and safety of the Department's workers and the public, through 
implementation of the material stabilization and spent fuel management 
programs. The efforts to stabilize nuclear materials include the 
following activities in fiscal year 1998: dilution of 230,000 liters of 
highly enriched uranium solution for conversion to low enriched uranium 
oxide at Savannah River, stabilization of 240 containers of plutonium 
scrap and 380 containers of plutonium-containing sand, slag and 
crucible material at the Savannah River Site, and stabilization of 253 
kilograms of plutonium solutions and 1,678 kilograms of plutonium in 
residues at Hanford. Although they are funded under the Environmental 
Restoration Program, this program is also responsible for managing 
stabilization activities at the Rocky Flats site which in fiscal year 
1998 will include: draining and solidifying 3,000 liters of plutonium 
solution, and the commencement of full operation of the stabilization 
and packaging system to prepare plutonium metal and oxides at Rocky 
Flats for long-term storage.
    The efforts to stabilize spent nuclear fuel include the following 
activities which the program expects to undertake in fiscal year 1998: 
removal of approximately 250 spent fuel assemblies and cans containing 
pieces of assemblies from Idaho's CPP-603 fuel storage facility to safe 
storage; and begin removal of spent nuclear fuel from the K-Basins near 
the Columbia River at Hanford and placement in Hanford's dry fuel 
canister Storage Facility. In fiscal year 1998, the Department will 
receive foreign research reactor spent nuclear fuel in support of the 
United States' nonproliferation initiatives. There currently are an 
estimated 22,000 spent nuclear fuel elements in 41 countries. Over a 
period of 13 years, more than one hundred shipments of this fuel will 
be received at the Savannah River Site and the Idaho National 
Engineering and Environmental Laboratory. In fiscal year 1998, 
approximately 30 casks (about 1,000 elements) of fuel will be received 
at the Savannah River Site and five casks will be received at Idaho.
    Also, the Department has begun developing alternative technologies 
for the storage and the treatment of spent nuclear fuel to a form 
suitable for future geological disposal. This program, which is focused 
on methods to achieve direct disposal in a geologic repository with 
minimum pretreatment, will continue in fiscal year 1998. For example, 
at the Savannah River Site, this program will include experimental 
projects to establish the feasibility of these alternative approaches 
for aluminum-uranium alloy fuel, as well as development, in 
consultation with the Nuclear Regulatory Commission, of the 
requirements for ultimate disposition of this material in a geologic 
repository. Programs to prepare spent fuel for ultimate disposition are 
also underway for the spent fuel at the Hanford Site and the Idaho 
National Engineering and Environmental Laboratory.
    The program also focuses on ``reducing the mortgage'' by completing 
deactivation projects and related activities. For example, in fiscal 
year 1998, deactivation activities at the B-Plant at Hanford will be 
completed three years ahead of schedule, reducing surveillance and 
maintenance requirements for the facility from approximately $20 
million per year to an estimated $3 million per year. This will save 
nearly $100 million over the life of the facility. Further, 
construction will begin on the Actinide Packaging and Storage Facility 
at the Savannah River Site to consolidate nuclear materials currently 
contained in a number of buildings across the site. When completed, 
this facility will not only safely store and secure the stabilized 
materials, but also will facilitate the deactivation of numerous 
inactive buildings including the canyon processing facilities.
    For the past three years, a major component of the deactivation 
program has been the Fast Flux Test Facility (FFTF) at Hanford. 
Recently, however, the Department has decided to place FFTF in a ``hot 
standby'' status pending a scheduled December 1998 determination on the 
possible role of this reactor as a new tritium supply source in support 
of the Nation's nuclear weapons stockpile. The Department will submit a 
fiscal year 1998 budget amendment to reflect this consideration of FFTF 
for a tritium supply mission.
    In recent years, the utilization of the F- and H-processing canyons 
at the Savannah River Site has been under review. The Department 
conducted a study in 1995 to determine the most cost-effective 
utilization of these aging and costly facilities for stabilization and 
potential material disposition and other future missions. The study 
recommended consolidation to the F-Canyon facilities, reserving H-
Canyon for cold standby. This recommendation was not implemented 
because of concerns that a decision to consolidate was premature due to 
limited progress complex-wide on stabilization activities and the 
uncertainty of other mission needs for these facilities. Because a 
number of changes have occurred since this evaluation and significant 
progress has been made in stabilization activities and future mission 
decisions, the Department has embarked on a new evaluation of 
operational strategies for these facilities. The results of this 
evaluation will be used as the basis for the multi-year plan for these 
facilities required to be submitted to Congress by the fiscal year 1997 
Defense Authorization Act.
                         science and technology
    Budget Request: $307,881,000 (4 percent of the total Environmental 
Management budget)
    The Office of Science and Technology conducts an aggressive 
national program of basic and applied research, development, 
demonstration, testing, and evaluation for environmental cleanup, waste 
management and related missions. These activities are focused on EM's 
major environmental problem areas: mixed waste, radioactive tank waste, 
subsurface contamination, and decontamination and decommissioning. Our 
strategy is to invest in technology development to develop new or 
improved technologies in these areas to reduce risks to workers, the 
public, and the environment, reduce cleanup costs, and provide cleanup 
solutions that do not currently exist. Recognizing ongoing budgetary 
restraints, developing new, effective technologies presents the best 
opportunity to ensure a reduction of risks and costs. For instance, 
there are 3 million cubic meters of radioactive and hazardous buried 
waste in the DOE complex. The landfill caps have breached and pose a 
potential threat to people and the environment. In fiscal year 1998, we 
expect to complete full-scale demonstration of a set of advanced 
landfill capping methods and monitoring techniques to mitigate this 
problem. New technology is critical to achieving the goals of the Ten 
Year Plan--by accelerating cleanup schedule and thereby reducing 
cleanup costs, the savings from which can be applied to other cleanup 
projects. We have recently performed a study of the potential cost 
savings from 37 of our innovative technologies and called upon the Army 
Corps of Engineers to peer review our cost savings analyses. Their 
initial review of these 37 technologies indicates that there is 
sufficient documentation to support potential cost savings in the order 
of magnitude of $20 billion. We are continuing, with the help of the 
Corps' expertise, to conduct a more detailed and expanded cost 
analysis.
    But these technologies must be deployed widespread to fully realize 
their cost savings potential. To facilitate the use of innovative 
technology, our fiscal year 1998 budget request includes $50 million 
for a new Technology Deployment Initiative that will serve as a 
catalyst for the DOE Operations Offices to use new technologies and 
innovative approaches to accelerate site cleanup. The initiative will 
completely fund the first application of a technology meeting a multi-
site performance specification. This will allow the problem(s) to be 
eliminated ahead of schedule and provide user-validated performance 
data and regulatory acceptance for the technology. Cost savings will be 
realized through this initiative by accelerating the cleanup schedule, 
applying more efficient technologies, and reducing the programmatic 
risk of using alternative technologies at other sites through the DOE 
complex.
    In 1996, the Department established a $50 million Environmental 
Management Science Program in partnership between EM's Office of 
Science and Technology and the Department's Office of Energy Research 
to bridge the gap between broad fundamental research that has wide-
ranging applicability with applied technology development. The fiscal 
year 1998 budget request includes $42 million to continue the 
Environmental Management's Science Program, which is aimed at DOE's 
most intractable environmental problems. The research results are 
focused on science areas addressing high-level radioactive waste tanks, 
spent nuclear fuel, mixed radioactive and hazardous waste, waste 
disposal forms, and risk, quantitative methodological, human and 
environmental health analyses.
    The Office of Environmental Management's risk activities are also 
conducted from the Office of Science and Technology. These activities 
support decision making by developing policy and guidance for 
implementing credible and dependable risk assessment, management and 
communication processes to assure that EM funds activities to address 
DOE's most threatening and widespread environmental problems.
                        privatization initiative
    Budget Request: $1,006,000,000 (13 percent of the total 
Environmental Management budget)
    Privatization is a critical component in the Environmental 
Management program's strategy to reduce costs and ``mortgages.'' Under 
the traditional system, whenever the Department needed a product or 
service, the Management and Operating (M&O) contractor at a site would 
build or procure the needed item or service. In effect, the Department 
would pay for a level of effort plus fee. The Department has been 
increasingly using fixed-price contracts and other incentive-based 
contracting methods to assure the Department is obtaining the most 
effective contracts. Under privatization, contracts are competed with 
the private sector for the product or service, and the government pays 
for the product or service when it is delivered and determined to meet 
specifications. The competitive process alone should sharply reduce the 
costs of these products or services to the Department. This approach 
should also substantially reduce the Department's need to build and 
maintain its own facilities to produce the needed product or service 
thus reducing the Department's life cycle costs for the project as well 
as potentially reducing near-term outlays. The private sector instead 
provides the funding and assumes many of the risks that were formerly 
borne by the Department. Appropriations in the early years for 
privatization projects will primarily cover the costs of termination in 
case the government should choose to terminate the project. Actual 
government outlays would not generally occur until the product or 
service is delivered and is determined to meet the previously agreed-
upon specifications.
Privatization initiatives currently underway
    In Washington--Hanford Tank Waste Remediation
    In Idaho--EM recently announced the award of a $1.1 billion 
contract to British Nuclear Fuels Limited to treat mixed waste at the 
Idaho National Engineering and Environmental Laboratory and treat waste 
from across the complex. The cost savings and cost avoidances 
anticipated from this privatization project will be several hundred 
million dollars over the cost-plus approach that was planned under the 
M&O contract.
    Additional privatization initiatives scheduled for contract award 
in fiscal year 1997 include the Oak Ridge Broad Spectrum Low Level 
Mixed Waste project, and the Transuranic Waste.
Privatization initiatives to be begin in fiscal year 1998
    In New Mexico--Privatization of contact-handled transuranic waste 
transportation for the Waste Isolation Pilot Plant. The contract will 
be for a private vendor to provide transportation of transuranic waste 
from generator sites to the Waste Isolation Pilot Plant disposal 
facility using contractor-financed, -owned and -operated tractor 
trailers and nuclear packaging equipment. Initially, waste will be 
shipped from just a few sites. However, eventually waste will be 
shipped from all 25 sites that currently have TRU waste. A standard fee 
will be paid based on quantity shipped and mileage. This is a 
recompetition of M&O subcontractor services.
    In Idaho--Low activity waste treatment project for the Idaho 
National Engineering and Environmental Laboratory. A private contractor 
will be used to finance, design, construct and operate a facility to 
treat seven million gallons of low-level waste from the Idaho Chemical 
Processing Plant, the Advanced Test Reactor, and other sources. The 
contractor will be paid for treated waste meeting contract 
specifications on a dollars per unit cost.
    In Idaho--Power Burst Facility deactivation for the Idaho National 
Engineering and Environmental Laboratory. The Department will hire a 
private contractor to plan, design, and execute the deactivation of the 
Power Burst Facility (a shut down reactor). Payment is projected at the 
completion of deactivation and acceptance by the federal government in 
fiscal year 2000.
    In Idaho--Spent nuclear fuel dry storage at the Idaho National 
Engineering and Environmental Laboratory. The Department will privatize 
capital construction of a dry storage facility capable of transferring 
and storing spent fuel rods. The construction and operation service 
will be provided through an open fixed-price competition, with the 
price including contractor design, licensing and fabrication.
    In Tennessee--Environmental management and waste management 
disposal at Oak Ridge. The Department will purchase waste disposal 
services from a private vendor for low-level, hazardous, Toxic 
Substance Control Act-defined, and mixed wastes generated at Oak Ridge. 
The contractor would be awarded a fixed unit price contract for waste 
disposal services including permitting, construction, and operation of 
the facility.
    In Tennessee--Transuranic solid waste treatment at Oak Ridge. A 
private contractor will design, permit, finance, and construct a 
transuranic (TRU) solid waste treatment facility at Oak Ridge to treat 
contact-handled and remote-handled solid TRU waste for shipment to the 
Waste Isolation Pilot Plant in New Mexico. The project will be procured 
through an open fixed-price competitive bid. DOE will compensate the 
contractor on a per unit basis for waste treated to performance 
specifications.
    In Ohio--Waste pits remedial action at the Fernald Site. The 
Department will privatize design and construction of a contractor owned 
and operated facility for the excavation, processing, treatment, and 
load-out of about 700,000 tons of waste for disposal at a permitted 
commercial disposal facility. The contractor will be paid on a unit 
rate for the quantity of processed waste during the operational phase.
    In Ohio--Silo 3 residue waste treatment at the Fernald Site. This 
initiative will fund a contractor to design, permit, finance, 
construction and operation of necessary treatment facilities. The 
contractor will process, package, ship, and dispose of residues from 
Silo 3, Fernald Operable Unit # 4 remediation. The contractor will be 
required to reprocess off-specification product at their own expense.
    In Colorado--Decommissioning of Buildings 779 and 886 at Rocky 
Flats. The vendors will finance and provide systems for the complete 
decommissioning and dismantlement of the Buildings 779 and 886 clusters 
at Rocky Flats. Payment will be made upon the decommissioning and 
packaging of equipment, and upon complete dismantlement of the building 
clusters.
    In South Carolina--Spent nuclear fuel transfer and storage at the 
Savannah River Site. This initiative is for an open fixed-price 
competitive procurement for the preparation and interim dry storage of 
aluminum-based spent nuclear fuel prior to shipment and disposal at a 
Nuclear Regulatory Commission-licensed geologic repository. Financing, 
design, permitting, construction and operation would be the 
responsibility of the contractor. After shipment of the spent fuel for 
disposal, the contractor would be responsible for the deactivation and 
clean-out of the facility. The contractor would be paid when spent fuel 
rods are prepared and stored in dry storage on a fixed-unit price 
determined at the time of contract award.

            formerly utilized sites remedial action program

    Senator Domenici. Thank you very much, Mr. Alm. Your entire 
statement will be made a part of the record.
    Senator Reid, would you like to proceed first.
    Senator Reid. Thank you, Mr. Chairman.
    Mr. Alm, the President requested $107 million for the 
Formerly Utilized Sites Remedial Action Program; is that true?
    Mr. Alm. The budget request, as I recall, is $182 million.
    Senator Reid. I have $107 million. Anyway, my direction is, 
there is some work that one of the members of the committee 
asked me to ask you some questions about--sites in New Jersey, 
including the Wayne interim storage site. Are you familiar with 
that?
    Mr. Alm. Yes, sir; I am.
    Senator Reid. It is my understanding that the Department 
has committed to completing the cleanup program by the year 
2002; is that true?
    Mr. Alm. That would be our goal, to complete the entire 
FUSRAP Program by 2002.
    Senator Reid. But how can that be done if you have not 
completed a record of decision for that site yet?
    Mr. Alm. Well, we are having discussions with the 
Environmental Protection Agency right now on whether a record 
of decision is necessary. What we are basically doing is 
removing the pile of material. We will be talking and 
continuing our discussions with EPA. It is possible we may do a 
record of decision.
    Senator Reid. But you are saying it may not be necessary?
    Mr. Alm. That is correct.
    Senator Reid. OK. I have a number of other questions that I 
will submit to you in writing. If you would respond to me and 
to the subcommittee as soon you could, that would be 
appreciated.
    Mr. Alm. I would be delighted to.

                        privatization oversight

    Senator Reid. In my opening statement, you heard me mention 
that this work is being done in the private sector, what are we 
doing as far as carrying out our work site responsibilities to 
make sure it is being carried out properly?
    Mr. Alm. The policies for oversight are under development 
right now. As you know, the two major projects, the tank waste 
remediation and the advanced mixed waste treatment system, are 
not in the stage of actual production, so we have a little bit 
of time.
    Let me tell you what I think are the main elements of our 
responsibility. First of all, at the beginning of a project, we 
need to have all of the technical capabilities to draw up a 
firm technical description of what we are buying. Second of 
all, one of the most important parts--in fact, the most 
important part of any project--is the project manager. And we 
intend to pay a great deal of attention to the project manager 
as proposed by the contractors, and really to have some say in 
that decision.
    In my experience in the private sector, good project 
managers almost always make good projects. And, unfortunately, 
vice-versa.
    Senator Reid. Well, what you are saying is, when these 
contracts are negotiated, you will have part of that contract 
being that the Department has some say in who the project 
manager will be?
    Mr. Alm. Absolutely. And then the next step is to 
continually monitor the project. What we really need to do is 
to learn a system where we monitor but do not meddle. The 
reason I say do not meddle, if we get involved with all of the 
details, we can actually become liable for the costs. And one 
of the main advantages of privatization is that the private 
sector takes on that obligation.
    I do think that we ought to have the right, if we feel a 
project is missing schedule or has any kind of other inherent 
problems, to work with the contractor in getting a new contract 
project manager who can perform the functions.

                     Beatty, nv, ground water issue

    Senator Reid. I am concerned about the speculation--and at 
this stage, that is all it is--of infiltration of tritium into 
the ground water around a town in Nevada called Beatty. My 
question is, Have we conducted sufficient ground water tests or 
have we conducted any? And what reports can we expect regarding 
the condition of the ground water in the region around the 
Nevada test site?
    Mr. Alm. Well my understanding is that there is currently 
modeling being done of ground water contamination at the NTS. 
And that modeling, at least preliminarily, indicates that there 
may be levels of tritium in the ground water. I think we need 
to, first of all, calibrate the model, and then begin to think 
about what kind of a potential testing program we might want to 
undertake.
    Senator Reid. I guess the good news is tritium dissolves. 
It has a short life span. Is that not true?
    Mr. Alm. Well, it has about 12 years. That is correct.
    Senator Reid. Well, compared to some of the stuff in the 
ground up there, that is real short.
    Mr. Alm. I understand that.

                    technology deployment initiative

    Senator Reid. Could you describe the goals of the 
technology deployment initiative and the impact on this budget?
    Mr. Alm. The Technology Deployment Program is a $50 million 
program, where we would invite our field offices, working with 
vendors and with nongovernmental groups, et cetera, to come in 
with innovative technology proposals. And the $50 million would 
be used to overcome the normal barriers to the installation of 
new technology.
    Senator, one of the most vexing problems has been the fact 
that there is so little innovative technology for use in the 
field, both in DOE and in the country in general. And this 
deployment fund is really designed for us to be able to harvest 
the large amount of good research and development that has been 
undertaken and get this technology deployed in the field. And 
the idea is not only to be deployed at one site, but we are 
looking for possibilities that could be deployed in many sites. 
And some of these technologies would actually provide an 
opportunity for U.S. exports.
    So we are excited about this program. We will be getting 
proposals in pretty soon. And assuming that they are good 
proposals, we would continue the program. If not, it would have 
been an experiment. But I am fairly optimistic.

                office of environmental management staff

    Senator Reid. Tell me about your staff. What kind of staff 
do you have to carry out your duties?
    Mr. Alm. Well, I have about 600 headquarters staff. And 
then we have a field staff which is over a couple of thousand--
not all devoted to the environmental management program. The 
type of staff--they are very heavily technical people--a lot of 
engineers, some nuclear engineers from the defense program 
base, but also other disciplines.
    Senator Reid. In your written responses to the questions 
that I have submitted, would you, in that response, outline the 
people you have on staff. I do not care about names, but 
numbers, and also where they are located--the field staff 
people, where they are located.
    Mr. Alm. I would be glad to do that.
    Senator Reid. Thank you a lot, Mr. Chairman.
    Senator Domenici. Thank you, Senator Reid.
    Senator Allard.
    Senator Allard. Thank you, Mr. Chairman.
    Senator Domenici. Senator Craig, do you mind if Senator 
Allard proceeds?
    Senator Craig. No, no, they were here first.
    Senator Allard. Thank you, Mr. Chairman. And thank you, 
Senator Craig. Calling from Idaho, I appreciate your allowing 
me to be a part of this hearing today.
    I am going to try in my questioning to make a point to the 
committee and everybody else that we can spend relatively few 
dollars early on in the project, as far as Rocky Flats and 
Colorado is concerned, with a considerable amount of savings in 
the outyears, because of reduction in fixed costs, which you 
referred to in your statement. So I have a number of questions 
I will submit to the staff for them to give to you. If you 
would respond to those in a timely manner, I would appreciate 
that, as soon as possible.
    [The information follows:]
                        Total Employed EM Staff
    At the end of March 1997, there were 3,077 Federal Environmental 
Management employees. Almost 80 percent of these employees are located 
at the field offices. Here is the breakout of our workforce:

Washington, DC (Headquarters).....................................   605
Albuquerque, NM...................................................   221
Chicago, IL.......................................................    79
Idaho Falls, ID...................................................   255
Las Vegas, NV.....................................................    60
Fernald, OH.......................................................   230
Oakland, CA.......................................................    71
Oak Ridge, TN.....................................................   150
Richland, WA......................................................   528
Rocky Flats, CO...................................................   293
Savannah River, SC................................................   536
Morgantown, WV....................................................    17
Pittsburgh, PA....................................................    32
                        -----------------------------------------------------------------
                        ________________________________________________
      Total....................................................... 3,077

    The employees in Pittsburgh are part of the 527 transfers from the 
Bureau of Mines to the Department of Energy. The majority of that 
workforce has been assigned to the Fossil Energy program, but 
Environmental Management is paying the salary and benefits of 29 former 
Bureau of Mines employees.

                        rocky flats 10-year plan

    Senator Allard. Now, to get to it, if you would raise that 
chart up there just a little bit.
    We have got on the chart here three case scenarios as far 
as Rocky Flats and Colorado is concerned. And we have case one 
which shows fewer dollars spent up front, and then, closure and 
expenditures go clear out to 2028. We have case two, where we 
are on track now--I believe, on the case two--where it shows 
that we spend a little more up front, and then we get closure 
and considerable savings when we come down to 2015. And then, 
if we even put up early here about $165 million, we can come up 
with a total savings of $1.7 billion and actually have closure 
by 2010. That is what we are trying to show on the chart.
    And so I have several questions I want to direct to you in 
regard to this chart. Does Rocky Flats meet all the criteria 
for accelerated closure projects set forth in section 3143 of 
the National Defense Authorization Act of Fiscal Year 1997.
    Mr. Alm. Yes, sir; it does.
    Senator Allard. Is the chart behind me--you see the three 
funding curves that we talked about--and you should have a copy 
of it in front of you, by the way--do you agree with me that 
the least costly scenario, which is case five, would cost DOE 
about $165 million more during the next 4 fiscal years than the 
original stable budget scenario that headquarters decided to 
use, which is case No. 2 on the chart?
    Mr. Alm. I agree that that is what this chart indicates. I 
have a somewhat different understanding, but it makes the same 
point. On working on the 10-year plan for Rocky Flats, it was 
clear that the flat allocation would not achieve the completion 
and would not achieve our cost-effectiveness goal. And so we 
are actually proposing, in the draft 10-year plan that will 
come out, an increase of $50 million a year for 3 years for 
Rocky Flats, over the normal allocation of where they are now.
    Senator Allard. So you are proposing $150 million over 3 
years, where this scenario had a $165 million increase over 4 
years?
    Mr. Alm. Yes.
    Senator Allard. OK.
    Mr. Alm. We also have efficiencies that we are getting the 
site to commit to. And it is our hope that we can complete 
Rocky Flats by the year 2006.
    Senator Allard. We are all for you on that, if we can 
probably get that to happen. And that is the point I want to 
make. You know, early expenditures here, early on, will save 
more than tenfold on costs over the life of the project. Then 
you do agree that case five would ultimately save about $1.7 
billion in total project costs, going from $9 billion, down to 
$7.3 billion?
    Mr. Alm. That is correct. That is what this chart shows.
    Senator Allard. And that then allows completion much 
earlier?
    Mr. Alm. Right.
    Senator Allard. Now, would you explain how DOE prioritized 
its environmental management budget between sites?
    Mr. Alm. We have to consider three factors. First is 
compliance, and we are firmly committed to compliance. Second 
is risk. We obviously have to finance the riskiest projects in 
early stages. And third is mortgage reduction.
    Now, Rocky Flats strongly meets two of the three. The 
compliance agreements are a little more nebulous than some of 
our other sites. But Rocky Flats is very, very high in terms of 
priority for risk, since the site deals with plutonium 
materials, and is close to population centers, and the 
opportunities for mortgage reduction are really very, very 
substantial, as these charts--I have seen so many different 
charts from the contractor--illustrate the point.
    If you can get into these buildings, decontaminate them, 
then you save a lot of money in terms of security and safety 
costs. And you can plow that money into the cleanup of other 
buildings. And so, in a sense, if you sequence projects 
correctly, you actually can create an investment fund to clean 
up more sites.

                   risk concerns and the 10-year plan

    Senator Allard. OK. I guess the next question I have is, 
you do--it replies to a risk, and obviously we are very 
concerned about the risk, because it is a high-population area 
and a major watershed, even downstream, out of Colorado.
    Now, what does the Department of Energy intend to do? Can 
you give us some more specifics on your 10-year plan? In other 
words, you are trying to move this along as fast as possible? 
You are not going to really endorse even the case five. You 
would like to have it cleaned up by 2006. Can you give a little 
more specifics on how you are going to reach that goal?
    Because what we have done here, we have really compressed 
these plateaus. If you look on the chart, there are two 
plateaus. We have really compressed those down. And those, I 
assume, are related to buildings. And then, once you clean up 
those buildings, then all your security--you destroy the 
buildings, all your maintenance operations dry up.
    So to get this done in 2006, for example, give us a little 
more specifics on how you are going to do that.
    Mr. Alm. Well, the Rocky Flats plan is really built around 
the various buildings. And what we are doing now is draining a 
lot of plutonium liquids, which are unstable. We are working in 
some of the major buildings. I think there are 79 buildings 
that we are working in. Those are just a bunch of numbers. But 
the idea really is to go through and stabilize first. Then, 
when you have stabilized everything, then you can come back 
later and do the decommissioning. Also, later on, you can do 
some of the environmental restoration projects.
    Senator Allard. And you think, in consultation with the 
private contractor in this case, you both agree that this is a 
very doable goal by 2006?
    Mr. Alm. I think it is doable but it is going to require 
that this contractor and all of our contractors become 
increasingly more productive. If you take a look at the total 
10-year submissions from the field, they were not adequate to 
meet all of our compliance and completion goals.
    Senator Allard. Yes.
    Mr. Alm. And we thought about various alternatives. And, 
really, the one that makes the most sense is to push 
efficiency. And we have found in the past in this program, when 
we have had to become more efficient because of the lack of 
funds we have been able to do it. And so, by setting efficiency 
goals, we hope, year by year, to keep the pressure on for 
improving performance.
    Senator Allard. Let me move along. I have two more 
questions, Mr. Chairman.
    Which accounts do you anticipate funding the project from?
    Mr. Alm. The Defense account.
    Senator Allard. OK. And then you are very comfortable 
working with the contractor, with your goals now? Now, the 
contractor did get some--I think I read in the paper where he 
did get a few penalties, because he did not meet some of his 
goals. Is that correct?
    Mr. Alm. That is correct.
    Senator Allard. And so now you are even moving this up to 
2006. And that is why I asked this question, between the 
contractor and yourself, have you set down and sort of feel 
that both of you feel that this is a reachable goal? We want to 
get it cleaned up as soon as possible, but I also want to make 
sure it is a realistic goal.
    Mr. Alm. I have talked to both the field manager and the 
contractor. And it is clearly a reasonable goal. But it will 
take some stretch.
    Senator Allard. OK.
    Thank you, Mr. Chairman.
    Senator Domenici. Well, I will tell you, if that is 
achieved by 2006 and you can lay claim for doing something to 
have put us in that position, that will be a very significant 
achievement all by itself. It seems that this is among the kind 
of projects we have got that just never end, and we are very 
hopeful this new approach will succeed. I am not trying to 
hurry up things and violate any safety and health rules, but, 
clearly, some of these projects have to come to an end.
    Senator, I have not inquired, but I would like you to. I am 
going to have to step out and talk to Senator Lott on the phone 
for 1 minute, and if you are inquiring, that would be fine.

                      waste isolation pilot plant

    Senator Craig. Mr. Chairman, thank you.
    And, Mr. Alm, thank you for being with us today. I think 
what the chairman has just said reflects a frustration of all 
of us--that our nuclear legacy in the area of defense is a very 
long term, costly cleanup, through the environmental management 
program that we are looking at today. All of us sense a degree 
of urgency that it be done in a timely fashion, because the 
costs are horrendous. There is no question about it.
    I must say that improper management, inefficiencies that 
stretch this out, bluntly put, become gold mines for those who 
are doing the work, but become a mine shaft, if you will, for 
the taxpayers who are footing the bill. You are in the middle 
of that. Obviously, your ability to manage and to cause a sense 
of urgency and responsibility and timeliness is critical to all 
of this. I think that all of us who are looking at finite 
dollars and want to make sure that all of the proper funding 
goes forward, we have got to turn to our colleagues on the 
floor of the Senate and make justification for these very large 
sums of money that are involved here.
    My colleague from Colorado is concerned about Rocky Flats, 
as am I, along with a lot of other locations. Of course, as you 
know, Al, this is directly tied, in some instances, to our 
ability to open the waste isolation pilot plant in Carlsbad. I 
guess I am growing increasingly frustrated. As I expressed to 
you the other day, the Department of Energy settlement 
agreement with our State, with our Governor, mandates that the 
INEEL begin shipping transuranic waste out of Idaho for 
disposal at the WIPP facility in Carlsbad by 1999.
    It is so necessary, therefore, that this facility be open 
to accommodate not only our concerns in Idaho, but the concerns 
in Colorado and elsewhere around the country. The concerns in 
Idaho are tied to a Federal court-ordered agreement. The 
Governor of Idaho has substantial leverage on a failure-to-
perform relationship with the Department of Energy, and that 
substantial concern and leverage is to shut Idaho's border.
    To shut our border potentially drydocks a tremendous amount 
of the nuclear naval vessels at sea. It is one of those things 
that has extensions of responsibility well beyond just opening 
the doors down at Carlsbad. It has implications for your 
nuclear Navy, and we want to make sure WIPP opens in a timely 
fashion.
    My question to you--and what I am doing for the record is, 
instead of giving an opening statement, Al, I am kind of 
combining comment with question, so that the record 
demonstrates the urgency I think that many of us sense with a 
variety of projects and programs that you have under your 
supervision.
    What are the Department's plans for dealing with the State 
of Idaho if the WIPP facility is delayed beyond the time line 
within the agreement?
    Mr. Alm. Well, with respect to the transuranic shipments, I 
think we would continue with the program of the advanced mixed 
waste treatment facility. We would have to look at the material 
that is just currently being stored and not slated for 
treatment. But I say, Senator, that the frustration you have is 
certainly shared. It is shared by me and Secretary Pena. We 
want to get the WIPP open as soon as possible.

               epa's review of doe's compliance documents

    Senator Craig. Well, I am looking at long-term concerns 
based on current records of performance and the struggle we 
have had with this, because I have got to start thinking ahead. 
Already, EPA is pushing a time line that you are frustrated by, 
that I am frustrated by, and that the Secretary is frustrated 
by. What are the near-term actions that DOE plans to take as it 
relates to EPA's review of DOE compliance documents?
    Mr. Alm. Senator, we meet weekly with EPA and go over all 
the details of their requirements. One thing we have done 
recently--and this gets very technical--but there is something 
called the performance assessment. And the EPA has indicated 
that because of disagreement with some parameters, they want it 
to run again. One thing we have been able to do is--for 
statistical purposes, they said we might have to do it three 
times--but rather than take a chance, we have bought some extra 
computers, and we will run it all simultaneously. That could 
save 60 days. And that is one of the actions. And it is the 
kind of thing we are trying to do to reduce the timeframe.
    The Secretary has met with Carol Browner. And he has a 
commitment from her, and we have a commitment from the staff, 
to do everything we can to hurry this project and get the 
certification approved as quickly as possible. One dilemma is 
we want to make sure that, in moving ahead, we have a legally 
supportable record. Because nothing would be worse than to have 
this hung up in the courts for a long period of time.
    Senator Craig. Well, I think we all agree with that. But 
one of the concerns that the chairman and I got involved in 
some years ago that brought EPA into this was to make sure that 
we did create an environment in which it was legally 
supportable, and that we had covered all of the bases. But, 
last year, we also expressed our desire to make sure that we 
dual-tracked here and got it done in a timely way, and not that 
EPA was allowed to recreate the process. I think that is our 
greater concern now, because of what most of us believe to be a 
very safe facility by all current indications. So, if you are 
able to duplicate in the fashion you have just expressed, I 
think that is going to be tremendously helpful.
    Mr. Alm. Senator, let me assure you that I will do 
everything possible to keep our current schedule going. I will 
say that, certainly, the Office Director at EPA, who is working 
on this, has been very helpful. And she is committed to opening 
WIPP.
    Senator Craig. Well, I am pleased to hear you say that. I 
am also pleased that the Secretary has been out there and is 
concerned, and obviously has made this, by all appearance of 
action, at least, a priority. It is a priority to all of us 
because, as you know, so much, not just in Idaho, but 
elsewhere, is tied to the ability to have a facility like that 
open and actually receiving transuranic waste.
    Mr. Alm. Well, I certainly share that. Because the WIPP is 
integral to not only the Idaho situation, but Rocky Flats, Los 
Alamos, and other facilities.
    Senator Craig. If nothing else, we need to prove to 
ourselves we can finally do something in the area of a final 
destination for this waste. I understand that we are pioneering 
in certain areas as it relates to geologic repositories 
compared to the rest of the world. But when we choose this 
route and the world chooses other routes, and they appear to be 
successful and responsible and environmentally sound and we 
just cannot get the job done, it is really a very dramatic and 
poor testimony to our ability as a country.
    Senator Allard. Would the Senator from Idaho yield?
    Senator Craig. I would be happy to.

              opening of the waste isolation pilot project

    Senator Allard. I would like to pile in on top of you here 
just a little bit on the importance of opening the WIPP site. 
Because I just finished a tour myself of Rocky Flats. And there 
are a lot of barrels that are packed and ready to go down 
there. And if we are going to stay on schedule with even the 
more modest schedule plans, we have got to get that out of 
there. So I thank the Senator from Idaho for yielding on that 
point.
    Senator Craig. I appreciate the Senator from Colorado's 
concerns, because we have a mountain of barrels in Idaho that 
came from Colorado, and he also has a similar mountain of 
barrels, all of them slated to go to Carlsbad.
    Al, let me commend your efforts and those of your staff in 
preparing 10-year plans for the Department of Energy sites. 
Your stated goal in this process is to complete cleanup at most 
sites within a decade. That is an ambitious plan but, again, a 
plan that I think all of us want to work with you on. You go on 
to state that a longer delay will simply cost more. And I 
think, whether it is the expression of the chairman or the 
Senator from Colorado, that is all very clearly demonstrated.
    You start running these plans out there and, as you have 
mentioned, the term mortgage reduction is clearly a reality. 
The reality is that we no longer will have to baby sit sites, 
by your expression, if we can deal with this. My question is, 
would you agree that true mortgage reduction for the DOE 
complex requires opening disposal sites both at the WIPP in New 
Mexico and at Yucca Mountain in Nevada, otherwise you have 
nowhere to send the waste or the spent fuel?
    Mr. Alm. Well, we have a waste program, which, in Savannah 
River, we are now vitrifying high-level waste; likewise, we are 
vitrifying high-level waste in West Valley. And we have the 
Hanford privatization project. That means that we will be 
vitrifying these wastes and then storing them on site. So, 
until Yucca Mountain is open, we are simply storing them. And 
that is obviously true, from our discussion before, on WIPP. 
WIPP is finished. It is costing us a lot of money to operate 
the facility and we should really begin moving waste into it.

                         pit 9 cleanup problems

    Senator Craig. Well, I appreciate that. I think you have 
already expressed the second part of my question, which was 
going to deal with what you are doing as it relates to reducing 
this mortgage profile by getting disposal sites open. Of 
course, we understand the frustration with Yucca Mountain and 
the time line on that facility. But Yucca Mountain is also 
extremely key to Idaho and to the rest of the country as it 
relates to resolving disposal of high-level waste and spent 
fuel.
    Congressional concerns about Pit 9 continue as it relates 
to the cost and the discussion of overall DOE privatization 
efforts. To what factor do you attribute the problems at Pit 9 
in Idaho?
    Mr. Alm. Well, there are a number of characteristics at the 
Pit 9 project that you do not normally see on a project like 
this. One, during the course of this project, you had two 
companies merging creating uncertain management and chains of 
command for periods of time. We have had four project managers. 
And so there are unusual situations.
    I think that Pit 9 really indicates the importance of 
stability and having project managers who have conducted 
projects of similar magnitude, who you have real confidence can 
do the work. I am not suggesting that the project managers 
could not do the work, but clearly when you find project 
managers of high caliber, who have got the requisite 
experience, you have a very good chance of the project 
succeeding.
    Senator Craig. Well, what do you think the impact of the 
Pit 9 experience will be on privatization projects such as the 
advanced mixed waste treatment project that DOE is currently 
planning?
    Mr. Alm. Well, Senator, my personal opinion is that Pit 9 
and the situation surrounding it will actually make the 
probability of another problem of that kind less likely. I 
think that contractors undertaking privatization projects with 
DOE will, first of all, go through internal procedures in their 
company to fully understand the risks and the contingencies. I 
think that the companies will select project managers who they 
feel can succeed, since they are going to be putting a lot of 
their own money in.
    From DOE's point of view, I think we have learned some 
things about how we need to pay attention to project managers, 
to develop a system of monitoring without meddling, and 
understanding the dimensions of these kind of projects at the 
very beginning. I mentioned earlier that it is very important 
that you clearly specify and understand what the product is and 
have some sense of how it will be achieved.
    Senator Craig. Well, I hope, out of this, maybe it will get 
called the Pit 9 approach or the Pit 9 doctrine. We had better 
be learning some lessons from this. They are expensive. They 
are expensive to the private participants. What will the cost 
to the Government be--or, I should say, will the cost to the 
Government be driven up as a result of Pit 9?
    Mr. Alm. Well, the situation right now with Pit 9 is that 
Lockheed-Martin LeMays, which is the subcontractor, entered 
into a fixed-price contract. At this point in time, the 
Government has no further obligations. We are evaluating a 
request for equitable adjustments. And once we make a 
determination, then there may be some payment, and there may 
not be. But those discussions are underway right now.
    Senator Craig. What about long-term costs ultimately, based 
on time lines and successes on a project like Pit 9, to succeed 
in being able to exhume waste and do the kinds of things we 
want to do with old waste stored underground; that has got to 
have some cost factor to it, has it not?
    Mr. Alm. Oh, no doubt it will. And certainly a delay 
factor. I mean the project is already substantially delayed. 
So, if it goes forward, it will be considerably behind 
schedule.

                    technology deployment initiative

    Senator Craig. The Department's fiscal year 1998 budget 
requests $50 million for the technology deployment initiative. 
What is the importance of this funding request, and how much of 
the funding might be allocated to the INEEL programs?
    Mr. Alm. The $50 million deployment fund was designed to 
create incentives to bring on innovative technology. We have 
spent billions of dollars in our technology development 
programs over the years. And, unfortunately, you do not see 
anywhere near as much actual deployment of the technologies, 
despite the fact that many have successfully gone through the 
demonstration phase.
    The idea of the $50 million is to create funds that will 
help overcome some of the obstacles of applying an innovative 
technology. Those are regulatory obstacles and inertial 
obstacles. If this experiment is successful, we may be able to 
bring on a lot of technologies that currently are merely 
sitting at the demonstration scale. And I would be more than 
happy, once we get proposals, to brief you and any other member 
on what kind of response we are getting and whether or not this 
really will be a way to jump start the use of innovative 
technology.
    Senator Craig. Well, I think all of us who have these 
marvelous laboratories in our States are extremely concerned 
about the ability to diversify them and for the labs, in part, 
to stand on their own, with their talent and their technology. 
This technology deployment becomes an important part of that.
    Mr. Alm. Well, I am certain that the INEEL will be 
interested and will come up with some good proposals.

                advanced mixed waste treatment facility

    Senator Craig. Al, the consent order settlement agreement 
between DOE and the State of Idaho requires the Department to 
commence as soon as practical the procurement of a waste 
treatment facility at the INEEL for transuranic and low-level 
waste. Facility construction is to be completed no later than 
December 21, 2002. I do not think I need to remind you that 
this settlement is legally enforceable.
    I mean I know this Governor and any future Governor is 
going to insist that that agreement be met to the letter of the 
agreement. I suspect, given the time lines on it, that any 
Federal judge reviewing it at that time--failure to meet it, 
would suggest that DOE had adequate time to respond.
    I think all of us take the terms of the agreement very 
seriously. I certainly do. This agreement could be a bellwether 
for DOE's new culture. Does DOE take the commitment seriously?
    Mr. Alm. Yes; we do, Senator. As you are probably aware, 
the advanced mixed waste treatment facility is a privatization 
proposal. Congress made $70 million available last year. There 
is no need for budget authority this year, but there will be in 
the future.
    Senator Craig. How is the work proceeding on that 
initiative?
    Mr. Alm. My understanding is that right now the business at 
hand is getting a permit and a conceptual design. And I forget 
when next year, but next year they will actually make a 
proposal for moving ahead on the cleanup. That is an 
interesting project, because we had originally had an M&O 
estimate that it would cost $2.5 billion. The winning bid under 
the privatization was $1.1 billion. So we have had tremendous 
savings by going the privatization route in this case.

                            idaho agreement

    Senator Craig. Mr. Chairman, one last question. And I 
appreciate your leniency here.
    The consent order settlement agreement between DOE and the 
State of Idaho requires that by December 31, 1999, DOE shall 
commence negotiating a schedule with the State of Idaho for the 
transfer of all spent fuel at the INEEL out of wet storage 
facilities into dry storage. Three Mile Island spent fuel is 
required to be transferred to dry storage by June 1 of the year 
2001.
    Could you describe what dry storage initiatives are funded 
at the INEEL in the fiscal year 1998 budget request?
    Mr. Alm. Yes, sir.
    Senator Craig. Are you satisfied that your current plans 
will put you on course to achieve the 2001 milestone?
    Mr. Alm. Yes, sir, Senator. We have a proposal for $108 
million, under the privatization program, to build a spent 
nuclear fuel dry storage facility. And I think that is a very, 
very important initiative. I think that some of the riskier 
activities we have in DOE are these pools of fuel and the 
like--that is, the fuel rods. Many of the pools are leaking. So 
the faster you can get into dry storage, the better. And this 
proposal is aimed at achieving that.
    Senator Craig. Well, Al, thank you very much. I appreciate 
your forthrightness and your direct approach toward these 
issues and the way you answer them.
    Mr. Chairman, thank you.

             technology deployment and regulatory structure

    Senator Domenici. Thank you very much, Senator.
    Mr. Alm, let me first make sure that we understand, while 
this committee has not been opposed to, and has actually funded 
rather adequately, the new technology efforts, I think we 
should know that it has been rather abysmal in its record thus 
far. My understanding is that we funded 1,370 different 
technology projects--and this is not your fault; I mean you 
have not been around here long enough for this mess--1,370 
different technology projects; 50 of them have been deployed or 
used, another 12 have been selected, and perhaps 100 more may 
be deployed.
    The total amount of savings that can be traced to this 
program is $309 million from a multi, multi, multi-billion-
dollar investment. The total expenditure in this program is $2 
billion. That is a pretty healthy effort.
    You know, I suspect, that our industrial sector and our 
inventors and the genius of entrepreneurs is better than that. 
I think there is something about the way we have structured 
these projects, the way we have layered them, that is making it 
very difficult for inventors and people with new ideas and new 
technologies to see any daylight. I do not think this kind of 
failure is directly a product of it being too hard to find 
solutions. I think it is a failure because it is too hard to 
find solutions the way we have structured the program and the 
way we have regulated it, sometime terribly inconsistent, and 
the way we have failed to define an end product in many cases.
    We do not know whether we want to clean it up so you could 
sit out there and drink clean water off the ground or whether 
we want to do something else. We have not even made those kind 
of decisions yet. So I think how you put enterprising people to 
find new ways to do it--I imagine many of these are just little 
changes in the way we are currently doing things, which is 
really a big project of moving waste around from one pile to 
another, and moving it someplace, which is a big earth-moving 
project, most of this cleanup.
    I also want to state for the record that this Environmental 
Management Program, even though projected in the outyears to 
cost much, much more, is already becoming an enormously big 
component of the defense spending in the whole nuclear weapons/
nuclear cleanup area. My recollection is--and, staff, you tell 
me if I am wrong--but the new nuclear program science-based 
stewardship program to maintain our entire weapon systems in a 
reputable, safe and trustworthy manner is about $4.1 billion. 
Just imagine that. That is for the entire arsenal. And this 
budget has $7.4 billion for the environmental management 
program, and going up. I do not know where we are going to get 
the money for either of the two at this rate.
    I want to proceed to ask a general question. And if you do 
not feel like answering it, I understand. You have looked at 
this now, and you have tried desperately to find ways to get on 
with this work. We understand it is tough work. It is 
hazardous. Do you believe that we might serve the Nation well 
if we were to actually take a look at the entire regulatory 
structure for cleanup and see if we could not modify it, to 
streamline it, and yet provide for health and safety?
    Mr. Alm. Well, Mr. Chairman, a few years ago, I think that 
the number of regulatory obstacles were such that I might have 
answered affirmatively. But in the last couple of years, the 
regulators, I think, have worked very closely with us in 
virtually all cases. I can give you one personal example. When 
the funds were obviously going to be reduced, and Hanford would 
not have enough money to move ahead with some major regulatory 
commitments, a meeting was held in St. Louis with the 
contractor, the DOE field office, and the regulators. And the 
regulators left the room at one point in time, came back with a 
series of proposals--a single regulator for projects and ways 
of streamlining activities.
    I would think, in general, our regulatory relationships 
with the sites are pretty good. They get testy now and then.
    Senator Domenici. But maybe there has to be testing, I 
understand.
    Mr. Alm. Yes.

                   compliance and rolling milestones

    Senator Domenici. Now, let me ask you this. There is 
another set of relationships that are intriguing. And I guess 
if you are in the Hanford area and in that State, you look at 
it maybe differently than I do. And I understand that. But, 
obviously, it is pretty hard for that region to think of this 
program being reduced dramatically and ultimately to have no 
dollars assigned to that area.
    It is a very, very big employer of people. While they want 
to clean up, they have a very big interest in making sure that 
all this money continues to flow. I hope nobody takes offense 
to that. It is just a reality. It is a very, very large number 
of people employed and money going into the area.
    We entered into some early on agreements between the 
Federal and local government as to what we would do and what 
they would let us do. Are they in need of some modification 
that would enhance the work we could do in your efforts to get 
this done more expeditiously?
    Mr. Alm. Well, Mr. Chairman, in most situations, we are now 
in the position of having rolling milestones, so they are 
renegotiated. For example, we were talking about Colorado. 
Colorado completely changed its compliance agreement over the 
last year or so. And I had the pleasure, last summer, of 
signing the compliance agreement, which is consistent with the 
10-year plan. So some of them are negotiated. I should indicate 
that the agreement with Idaho was not negotiable, but that was 
made under unusual circumstances. But, in many of our sites, we 
do have rolling milestones.
    Senator Domenici. Would it be difficult for you to go 
through with your staff and give us a summary of these, and 
tell us how the milestones have affected your ability to get 
things done more expeditiously? And, I think, equally or more 
important, we would like to know whether there are some 
milestones that are stuck in the mud, that we cannot get them 
changed and they ought to be changed. Can you do that?
    Mr. Alm. Yes, sir; I would be more than happy to.
    [The information follows:]
                         Enforceable Milestones
    The attached list summarizes EM's milestones; the milestones are 
categorized by site, operations office, and provide cost and 
enforceable dates. The Department believes that legally enforceable 
commitments can serve the useful purpose of encouraging real progress 
towards completion of clean-up tasks, provided the milestones are set 
with appropriate attention to budget constraints, ``on the ground'' 
work and risk. Over the past few years, the Department has worked 
closely with its regulators to improve its environmental cleanup and 
compliance agreements to ensure that enforceable milestones are set 
with these considerations in mind. For example, the Department recently 
concluded negotiations on a new cleanup agreement for the Rocky Flats 
Environmental Technology Site that contains many improvements over its 
previous agreement. As we have been doing at Hanford, Rocky Flats will 
now use a ``single regulator, single process'' approach to cleanups in 
order to reduce duplicative paperwork requirements and the potential 
for inconsistent direction from regulatory agencies. An accompanying 
Memorandum of Understanding among the States, Environmental Protection 
Agency, Defense Nuclear Facilities Safety Board, and DOE also will help 
to improve coordination and minimize conflict among the agencies 
responsible for overseeing activities at the site, including 
deactivation and decommissioning activities. The new agreement also 
focuses more on accomplishing ``on the ground'' work than on paperwork 
milestones, and includes a process for prioritizing work across the 
site to ensure that higher risk activities and safety concerns are 
addressed first.
    Another significant improvement in the new Rocky Flats agreement is 
the incorporation of a ``rolling milestone'' framework, which 
coordinates the establishment of milestones with the federal budget 
process and better recognizes the uncertainties of federal funding 
availability. Under this approach, near-term activities within the 
Department's three-year budget execution and planning window are 
designated as enforceable milestones subject to penalties if the 
Department fails to meet these milestones. Out year activities beyond 
the budget planning window are generally designated as non-enforceable 
deadlines, recognizing the greater technical and funding uncertainties 
associated with these dates. Each year, the existing milestones are 
reevaluated in concert with the budget process to determine if changes 
are warranted based on funding availability, new priorities, or other 
factors. While regulators are not bound to keep milestones within 
appropriated funding levels, they have agreed to consider these levels 
in good faith in establishing and reviewing milestones. The agreement 
also contains a limited number of out year enforceable milestones 
designed to provide accountability for key cleanup commitments and 
ensure adequate progress at the site. Just as at Hanford, DOE will be 
working with the Rocky Flats regulators to continue to identify 
opportunities for cost savings and productivity improvements at the 
site.
    The Department is requesting that regulators agree to use the 
``rolling milestone'' approach in all new cleanup and compliance 
agreements that contain long-term milestones with significant funding 
commitments. In the past few years, the Department negotiated twenty-
nine (29) new mixed waste treatment orders under the requirements of 
the Federal Facility Compliance Act. It is encouraging to note that in 
most of these orders, regulators agreed to use a ``rolling milestone'' 
approach and demonstrated a willingness to try to work with DOE to 
address funding concerns. DOE intends to work collaboratively with 
regulators and other stakeholders to determine appropriate priorities 
and, as necessary, propose modifications to certain compliance 
activities to reflect those priorities and reflect funding levels. 
Successful implementation of this collaborative approach should prevent 
milestones from being ``stuck in the mud.''
[GRAPHIC] [TIFF OMITTED] T10AP22.014

[GRAPHIC] [TIFF OMITTED] T10AP22.015

[GRAPHIC] [TIFF OMITTED] T10AP22.016

[GRAPHIC] [TIFF OMITTED] T10AP22.017

[GRAPHIC] [TIFF OMITTED] T10AP22.018

[GRAPHIC] [TIFF OMITTED] T10AP22.019

[GRAPHIC] [TIFF OMITTED] T10AP22.020

[GRAPHIC] [TIFF OMITTED] T10AP22.021

[GRAPHIC] [TIFF OMITTED] T10AP22.022

[GRAPHIC] [TIFF OMITTED] T10AP22.023

[GRAPHIC] [TIFF OMITTED] T10AP22.024

[GRAPHIC] [TIFF OMITTED] T10AP22.025

[GRAPHIC] [TIFF OMITTED] T10AP22.026

[GRAPHIC] [TIFF OMITTED] T10AP22.027

[GRAPHIC] [TIFF OMITTED] T10AP22.028

[GRAPHIC] [TIFF OMITTED] T10AP22.029

[GRAPHIC] [TIFF OMITTED] T10AP22.030

[GRAPHIC] [TIFF OMITTED] T10AP22.031

[GRAPHIC] [TIFF OMITTED] T10AP22.032

[GRAPHIC] [TIFF OMITTED] T10AP22.033

[GRAPHIC] [TIFF OMITTED] T10AP22.034

[GRAPHIC] [TIFF OMITTED] T10AP22.035

[GRAPHIC] [TIFF OMITTED] T10AP22.036

[GRAPHIC] [TIFF OMITTED] T10AP22.037

[GRAPHIC] [TIFF OMITTED] T10AP22.038

[GRAPHIC] [TIFF OMITTED] T10AP22.039

[GRAPHIC] [TIFF OMITTED] T10AP22.040

[GRAPHIC] [TIFF OMITTED] T10AP22.041

[GRAPHIC] [TIFF OMITTED] T10AP22.042

[GRAPHIC] [TIFF OMITTED] T10AP22.043

[GRAPHIC] [TIFF OMITTED] T10AP22.044

[GRAPHIC] [TIFF OMITTED] T10AP22.045

               privatization budget and cleanup progress

    Senator Domenici. Would you explain one more time for me 
how we would use the billion-plus dollars in privatization. And 
try to use an example that we might understand, if you would. 
First of all, let me ask, how many sites do we have that we 
want to clean up in the United States--big, little, long term, 
short term?
    Mr. Alm. I am responsible for 130 sites, and there are 81 
to be cleaned up.
    Senator Domenici. OK. The other ones are not to be cleaned 
up?
    Mr. Alm. Fifty have been cleaned up.
    Senator Domenici. Oh, they are done.
    Mr. Alm. And these are smaller sites.
    Senator Domenici. OK. Of the 80 plus, how many are 
extremely large sites and difficult?
    Mr. Alm. Well, we can almost count them on your hands--
Savannah River, Oak Ridge, Idaho, Rocky Flats--although I think 
Rocky Flats can be done much quicker--and Hanford. Clearly, 
those four--taking Rocky Flats out--will not achieve a 10-year 
window at all.
    Senator Domenici. OK. Of the total amount of money we plan 
to spend, how much goes to those five?
    Mr. Alm. Let me see. Hanford is about 1.7, I believe, with 
the privatization. Rocky Flats is----
    Senator Domenici. $1.7 billion?
    Mr. Alm. Yes.
    Senator Domenici. OK, per year, with part of it being 
privatization.
    Mr. Alm. There is an unusually high amount because of the 
privatization level.
    Senator Domenici. Can you pull the privatization out of 
that for me? If you want to bring your budget man up, that is 
fine with me.
    [Pause.]
    Senator Domenici. Do you have to wait and do it for the 
record?
    Mr. Alm. Savannah River is, I think, close to $1.2 billion. 
Oak Ridge is, I believe, $600 million and some, but they are 
getting the information.
    Senator Domenici. OK.
    [Pause.]
    Mr. Alm. Yes; that is right. The number for Hanford is $1.7 
billion. For Savannah River, the regular budget is $1.2 
billion, and then there is $191 million in the privatization 
amount. And then there is forward funding construction, which 
is fully funding some of the construction activities, for $227 
billion. So the total is $1.6 billion.
    Senator Domenici. Maybe I can help you and you can just 
confirm this. I now have the percentage of the total as 66 
percent going to the big five.
    Mr. Alm. That sounds about right.
    Senator Domenici. OK. Now, tell me about the remaining 
ones. Just in general, speak to us about them. Are some of 
those going to be done quickly? Do you have special plans for 
the smaller ones, to get them out of the way and get them done?
    Mr. Alm. Well, first of all, you have two relatively good-
sized projects, Fernald and Mound, in Ohio, plus West Valley in 
New York. And the idea is all three of those projects would be 
done by 2006. Fernald is a fairly significant project.
    Then you have the FUSRAP Program, the Formerly Utilized 
Remedial Action Program. And these are a small number of sites 
across the country. And we are asking for an additional $100 
million to try and finish all those sites by the year 2002.
    Then we have a number of sites--they almost go State by 
State--you have got Lawrence Berkeley, Livermore, Los Alamos, 
Sandia--that are substantial but not our larger sites. And then 
you have the uranium mill tailing sites, which are a large 
number where we are dealing with ground water contamination.
    Senator Domenici. Could you give us, or maybe you did and I 
do not have it, but give us all of those in a response to this 
question of how much you estimate each one will cost and what 
your timeframe is.
    Mr. Alm. I would be glad to do that.
    [The information follows:]
                           Cleaning up Sites
    The Environmental Management (EM) program has cleanup 
responsibility for 132 geographic sites in 31 states and one U.S. 
territory. As of the end of fiscal year 1996, cleanup had been 
completed at 52 of the 132 geographic sites, leaving 80 sites which 
require some form of action.
    I would like to provide for the record a table listing all of the 
132 geographic sites, those completed, and those to be completed in 
fiscal year 1997 and beyond. The information included in this table is 
consistent with the fiscal year 1998 Congressional Budget Request and 
does not incorporate probable increase in efficiency and resulting 
acceleration of work as a result of the EM 2006 Plan currently being 
developed by EM staff across the country.
    In some cases, funding amounts are provided for multiple geographic 
sites due to the nature of the budget formulation process at given 
Operations Offices.
    The definition used for cleanup of a geographic site is ``A 
geographic site is considered complete when physical remediation or 
decommissioning has been finished and the appropriate documentation has 
been submitted to regulators.'' Several exceptions exist to this 
definition.
    For purposes of groundwater remediation projects, sites are 
considered completed once groundwater remediation construction has been 
completed and operation started. In addition, this definition excludes 
long term surveillance and maintenance requirements.
    This may result in a site being designated as complete even though 
there are still pump and treat requirements for groundwater as well as 
surveillance and maintenance requirements.
    The Uranium Mill Tailings Remedial Action Program (UMTRA) is 
comprised of 24 geographic sites, however, it is managed as two 
programs--the UMTRA Surface Remediation Program and the UMTRA 
Groundwater Remediation Program. The attached table provides completion 
dates and funding associated with both programs associated with these 
24 UMTRA sites.
    The information I would like to provide for the record follows:
    [GRAPHIC] [TIFF OMITTED] T10AP22.046
    
    [GRAPHIC] [TIFF OMITTED] T10AP22.047
    
    [GRAPHIC] [TIFF OMITTED] T10AP22.048
    
    [GRAPHIC] [TIFF OMITTED] T10AP22.049
    
    [GRAPHIC] [TIFF OMITTED] T10AP22.050
    
    [GRAPHIC] [TIFF OMITTED] T10AP22.051
    
    [GRAPHIC] [TIFF OMITTED] T10AP22.052
    
    [GRAPHIC] [TIFF OMITTED] T10AP22.053
    
    [GRAPHIC] [TIFF OMITTED] T10AP22.054
    
    [GRAPHIC] [TIFF OMITTED] T10AP22.055
    
    [GRAPHIC] [TIFF OMITTED] T10AP22.056
    
    [GRAPHIC] [TIFF OMITTED] T10AP22.057
    
    [GRAPHIC] [TIFF OMITTED] T10AP22.058
    
    [GRAPHIC] [TIFF OMITTED] T10AP22.059
    
    [GRAPHIC] [TIFF OMITTED] T10AP22.060
    
    [GRAPHIC] [TIFF OMITTED] T10AP22.061
    
    [GRAPHIC] [TIFF OMITTED] T10AP22.062
    
    [GRAPHIC] [TIFF OMITTED] T10AP22.063
    
    [GRAPHIC] [TIFF OMITTED] T10AP22.064
    
    [GRAPHIC] [TIFF OMITTED] T10AP22.065
    
    [GRAPHIC] [TIFF OMITTED] T10AP22.066
    
    [GRAPHIC] [TIFF OMITTED] T10AP22.067
    
    [GRAPHIC] [TIFF OMITTED] T10AP22.068
    
    [GRAPHIC] [TIFF OMITTED] T10AP22.069
    
                             privatization

    Senator Domenici. I think that would be good to have.
    Now, take your privatization project idea and pick some 
site or some piece of a site and tell us how it would work.
    Mr. Alm. Well, let us take the advanced mixed waste 
treatment facility. In that particular situation, we have let 
the contracts. One contractor was British Nuclear Fuels 
Limited, which is an American subsidiary of a British 
reprocessing operation. They will build a process to segregate 
the waste. And some of the waste, as I recall--I forget exactly 
how they are going to treat it. I think they will be 
incinerated. Some of the waste that is very low in radio 
activity would also be vitrified. The waste would then be sent 
to the WIPP.
    The project would take the waste that is currently stored 
on the Idaho site, and they would be retrieved--they would be 
retrieved by the contractor, which is an important point. So 
they do not have to depend on the Government providing the 
material. So this is a large project.
    Now, we have two projects, as we discussed before, for 
spent fuel storage. These projects are much less complex. They 
really involve constructing a building, plus certain associated 
equipment characteristics to handle the waste.
    So that sort of spans the----
    Senator Domenici. Do they give you a turnkey job under the 
contract?
    Mr. Alm. Well, we do not have a contract. We have one in 
the advanced waste treatment facility. And the answer is yes. 
And we have a contract, where we agree to pay for the waste at 
a unit cost. And the BNFL will put up their own money and will 
build, own, operate, and ultimately decommission this building.
    Senator Domenici. And that approach, you can see a way to 
make it work in a number of areas in the country?
    Mr. Alm. I think so, Senator. Privatization of this kind 
for project finance has become very pervasive worldwide. Many 
sewage treatment plants, water treatment plants, powerplants, 
and cogeneration plants are built under these project financing 
arrangements. So they are not a new phenomenon. It is just that 
we are applying them to the DOE program in a substantial way.
    Senator Craig. Mr. Chairman.
    Senator Domenici. Please.
    Senator Craig. On the example that Al has just used with 
British Nuclear Fuels Limited, they currently do something very 
similar to this. I mean they have a track record in Europe, do 
they not, of being able to design, operate, and manage this 
type of facility?
    Mr. Alm. Yes; at the Sellafield facility in northern Great 
Britain, they have vitrifiers. And they vitrify their high-
level waste from the reprocessing. The vitrifier they are using 
here, I believe, is a Duratek vitrifier, which is somewhat 
different. But they do have a lot of experience.

                             vitrification

    Senator Domenici. Well, I just wanted to make sure that 
what I understand is correct about vitrification. I understand 
vitrification, as a general proposition applied in a broad way, 
has not been proven that it is very, very precise as to what 
kind of waste it has worked on and that it is not large, large 
quantities. Is that correct or not?
    Mr. Alm. Well, vitrification can be a tricky technology. 
There is no doubt about that. But I would think that BNFL, with 
the experience they have had and their technical expertise, 
really believe that they will be able to handle this project. 
They had bugs that they encountered when they first put in 
their facilities at Sellafield, and worked them out.
    Senator Domenici. Well, a site like Hanford is vested with 
many problems that make vitrification almost an impossibility. 
We do not even know what is in those tanks until we start 
taking it out, is that right? They have dumped all kinds of 
things there. So there is no homogeneous stream anywhere.
    Mr. Alm. No; there is not. What would have to be done--we 
are characterizing the waste at Hanford, and will continue to 
do so for a substantial period of time. The plan at Hanford is 
to extract the waste. These wastes, you know, we have 
evaporated most of the liquid. So the wastes you have are 
either salt cake or very heavy sludge, some of it, like 
concrete. So we would have to sluice the waste to get them out 
of the tank, put them into a tank for the contractor. The 
contractor would then have to separate the waste. And there are 
various separation techniques, like ion exchange.
    The low-level fraction would be treated by one vitrifier. 
And that material would be stored on site. The high level, the 
separated material, would be vitrified separately and would be, 
obviously, stored on site until a repository was opened, at 
which time it would be sent to the repository.
    Senator Craig. Mr. Chairman, one last question.
    Senator Domenici. Sure.
    Senator Craig. As it relates to the advanced mixed waste 
treatment facility, how much waste is there out there that this 
facility could service--assuming the technology works and that 
we get it there--that serves as a qualifier, if you will, 
headed to the waste isolation pilot plant?
    Mr. Alm. The number 63,000 metric tons sticks in my head, 
but I will provide it for the record.
    [The information follows:]
             Advanced Mixed Waste Treatment Project (AMWTP)
    Under the contract with British Nuclear Fuel Limited, Inc. (BNFL), 
65,000 cubic meters of waste from the Idaho National Engineering and 
Environmental Laboratory (INEEL) will be processed. This is the amount 
of post-1970 retrievably stored transuranic waste and alpha-
contaminated waste at the INEEL. The contractor's overall schedule for 
processing this waste must support the Consent Order/Settlement 
Agreement requirement to ship all of this waste out of the State of 
Idaho by a target date of December 2015 and a deadline of December 
2018. In addition, the contract with BNFL provides DOE with an option 
to direct the contractor to process up to 120,000 cubic meters of 
additional waste from the INEEL and other DOE sites. Based on our 
current estimates, there are approximately 5,000-10,000 cubic meters of 
existing alpha contaminated waste from other DOE sites that could be 
processed at the AMWTP, as well as future waste generated as a result 
of environmental restoration and D&D activities across the complex.

    Mr. Alm. The wastes that the contract is designed to deal 
with right now are the wastes that are stored in buildings. And 
that is a finite amount.
    Senator Craig. Right.
    Mr. Alm. Whether or not this technology might be used for 
further pits and trenches is a decision in the future.
    Senator Craig. OK. Thank you.
    Senator Domenici. Senator Allard, did you have any 
additional questions?
    Senator Allard. No; thank you, Mr. Chairman.
    Senator Domenici. Well, frankly, I was unaware, Senator, of 
the change in the compliance relationship that your State has 
entered into. From what I am hearing, it is probably good for 
Colorado and good for the U.S. Government that it becomes a 
more reasonable schedule as to how we get things done, with 
compliance being more reasonably stated. And I compliment the 
State of Colorado. We want to get these jobs done, but 
sometimes the States are making it very, very difficult for us 
to get them done. There is just no doubt about it.
    Senator Allard. Thank you.
    Senator Domenici. And your understanding is as he said 
about that situation?
    Senator Allard. Yes; I just toured the Rocky Flats within 
the last 30 days. And they are obviously moving ahead. And you 
can see there is cleanup occurring. And I am very hopeful that 
we will proceed along in a very timely fashion. And I was 
encouraged by what I saw.
    Senator Domenici. Well, I just recently visited Oak Ridge. 
I have not had a chance to get to your site or to Senator 
Craig's. But I will try before the year is out to see if I can 
see two or three more. I would like to take a look for myself. 
I know a little bit about some of the facilities.
    Senator Allard. Well, if we can facilitate your visit at 
all, let us know.

                    general accounting office report

    Senator Domenici. Well, we would go with you.
    Have you seen the General Accounting Office Department of 
Energy contract management critique?
    Mr. Alm. Yes, sir; I have.
    Senator Domenici. I do not know that I want to go through 
all of the suggested shortcomings, but might I just ask you, 
did you take seriously some of the analysis and conclusions 
that they have come up with?
    Mr. Alm. I did, indeed. As a matter of fact, I meet from 
time to time with Vic Rezendes, who is in charge of that part 
of GAO. And this is one of the topics I wanted to talk to him 
about--our followup. We take all GAO reports very seriously.
    Senator Domenici. OK. Well, I think we do everything we can 
to be helpful. And we do everything we can to inquire as 
astutely as we can. But when they put some pretty good people 
on it--which they have not always done, but I think this is a 
good group--do you agree with that?
    Mr. Alm. Yes, sir; it is a very capable group.
    Senator Domenici. Then clearly we have to insist that you 
give us answers on it, or we will find this being used against 
anything we are trying to do somewhere. So, if you take that 
seriously, that will be helpful to us.
    Mr. Alm. I will be glad to send you a letter, just telling 
you about what our followup is.
    Senator Domenici. That would be very helpful.
    [The information follows:]
   General Accounting Office Report on Department of Energy Contract 
                               Management
    The General Accounting Office (GAO) report is an update of a 
December 1992 report which identified contract management as a ``high 
risk'' area within the Department of Energy (DOE). The thrust of this 
update is that DOE has made a number of significant improvements to its 
contract management, but sustained management focus is needed to ensure 
that improvements will continue. The DOE considers the management 
issues raised by the General Accounting Office to be significant and 
fully recognizes the need to take prompt, definitive action to improve 
the management of its contracts. We agree with the GAO's conclusion 
that contract reform must remain a high priority within DOE and that 
``start-up'' problems should be addressed during our implementation 
phase. Accordingly, I assure you that I, along with the senior 
management of the Department, am fully committed to improving contract 
management within DOE.
    The Department already has taken a number of aggressive actions 
that address the concerns raised by the GAO. I would like to highlight 
several recent key initiatives that underscore the Department's 
commitment to improving its contract management activities.
    The Contract Reform Project Office, under the auspices of the 
Deputy Secretary, will be continued to assure a high-level commitment 
of the Department's management to contract reform. This office is 
nearing completion of its Contract Reform Self-Assessment. The Self-
Assessment will identify lessons learned in implementing performance-
based contracting and specific recommendations to improve the 
effectiveness of DOE's reform efforts.
    The Office of Procurement and Assistance Management will soon issue 
final regulations to implement significant policy recommendations of 
the Contract Reform initiative. Key changes to its procurement policies 
include: implementation of performance-based contracting; restrictions 
on reimbursement of costs for fines, penalties, third-party liabilities 
and property loss or damage; requirements for contractor make-or-buy 
plans; and increased protection of the environment, safety and health. 
The rulemaking, which has already undergone public review and comment 
pursuant to a Notice of Proposed Rulemaking, now is undergoing final 
Departmental coordination.
    The Office of Environmental Management (EM) has developed draft 
guidelines for developing performance criteria and incentives for 
contracts supporting EM programs. The guidelines now are undergoing 
internal Departmental review and coordination.
    The Office of Policy (PO) has initiated important changes to the 
Department's management systems to ensure that the Department's 
strategic goals and objectives cascade to programmatic strategic goals 
and objectives and are reflected in contract performance objectives. 
Such initiatives include: development and institutionalization of the 
Department of Energy Strategic Management System, and development of a 
new Departmental policy on Performance-Based Management in its 
operations, including contractor performance. The policy currently is 
undergoing internal review and approval.
    In addition, I want to reiterate that the Department considers 
contract reform an on-going management initiative, and that we have 
begun a second phase of actions. Several of the key initiatives of this 
phase include the following:
  --The Office of Procurement and Assistance Management is developing 
        new policies governing the establishment and payment of fees 
        and incentives under performance-based management contracts. 
        The new policies, which will amend the Department of Energy 
        Acquisition Regulations, are undergoing final Departmental 
        review and concurrence prior to publication in the Federal 
        Register as a Notice of Proposed Rulemaking for public comment.
  --On March 19, 1997, I initiated a comprehensive review of the 
        Department's contracts for the management and operation of its 
        major sites and facilities. The focus of the review is to 
        assess whether the performance objectives and incentives under 
        these contracts are well-defined, rational, and appropriate. 
        This review, which is under the direction of the Deputy 
        Assistant Secretary for Procurement and Assistance Management, 
        is a high-priority initiative and has already begun. We 
        anticipate that the review will be completed in August 1997. 
        Concurrently, I directed that future contracts be reviewed by 
        Headquarters to ensure that performance objectives and 
        incentives reflect lessons learned.
  --The Office of Procurement and Assistance Management is undertaking 
        several important studies and workshops relating to the 
        administration of its site and facility management contracts. 
        The objective of these studies is to identify key policy and 
        practical issues that have emerged as a result of the 
        Department's aggressive move to performance-based contracting. 
        In addition, a study is underway to assess the appropriateness 
        of the Department's Federally Funded Research and Development 
        Centers.

            formerly utilized sites remedial action program

    Senator Domenici. Senator Bennett asked me to submit four 
questions to you. Would you answer them as soon as you can? I 
do not think I am going to ask them here. These are regarding 
the Formerly Utilized Site Remedial Action Program. And I think 
you would will answer those as quickly as you can, will you?
    Mr. Alm. I certainly will.
    Senator Domenici. Senator Craig, did you have any other 
questions?
    Senator Craig. No; only to close by thanking you, Mr. 
Chairman; and, Al, thanking you again. I enjoy working with 
you. As I mentioned, I appreciate your forthrightness. The 
projects we have at hand at the INEEL are critical, not just to 
Idaho but nationally, to try to bring environmental management 
into perspective and into reality and online and in cost. So I 
will look forward to working with you now and in the future.
    Thank you.
    Mr. Alm. Thank you, Senator.

                      waste isolation pilot plant

    Senator Domenici. I guess, before I close the meeting up, I 
want to thank you, Senator, for your participation. It is good 
to have you on board on this subcommittee.
    I do want to say, every time we look at how we are going to 
accomplish this cleanup, it ends up with substantial, of the 
transuranic waste at least--low-level transuranic--ending up at 
WIPP, the waste isolation pilot project. And I think it is kind 
of a unique situation, in that you have an overwhelming 
percentage of the people of the State supporting it, and the 
certainly overwhelming proportion of the people in the region 
supporting it.
    Great expenditures have been made by the Federal 
Government, and I have been somewhat critical of the delays in 
this last application for licensing between the Environmental 
Protection Agency and you all. And I have signed a letter 
indicating my concern. I do not intend to talk about the 
Environmental Protection Agency with them not being here. If I 
want to talk to them about what I think they ought to be doing 
under the statute, I will bring them up here.
    I would like to submit for the record, however--and we do 
not have it here, but we will get it--the letter which we sent 
to both your Secretary and EPA, and put it in this record.
    [The information follows:]

                    Letter From Members of Congress

                             Congress of the Unites States,
                                    Washington, DC, April 16, 1997.
The Honorable Carol M. Browner,
Administrator, Environmental Protection Agency,
Washington, DC.
The Honorable Federico Pena,
Secretary, Department of Energy,
Washington, DC.
    Dear Secretary Pena and Administrator Browner: It has recently come 
to our attention that contrary to the WIPP Land Withdrawal Act 
Amendments, legislation signed into law last year, that WIPP will not 
open in November 1997. The situation has become increasingly disturbing 
and does not reflect well on either DOE's or EPA's ability to perform 
the job as mandated by Congress. In addition to not meeting a clearly 
expressed deadline, it appears the lack of achievement reflects the 
internal inefficiency, lack of clarity, and poor policy decisions which 
have plagued both agencies, handling of the WIPP project. The fact that 
EPA and DOE cannot efficiently handle a project of such national 
importance, in many ways the symbol of both agencies' environmental 
management abilities, makes the present delays difficult to understand 
at times.
    In addition, and contrary to the will of Congress, EPA has yet to 
formally notify the Congress that the WlPP time lines will not be met. 
EPA and DOE have known since late last year that the Agency would not 
complete its certification activities on time, which again could be 
construed as a direct rebuttal of Congressional authority.
    A delay in the scheduled opening of WIPP dramatically increases the 
cost of cleaning up the nation's TRU waste sites. In addition, it 
establishes a highly undesirable precedent directly impacting on other 
national nuclear waste clean-up and disposal programs. It is 
frustrating the most technically and scientifically advanced nuclear 
waste disposal facility in the world, in which the construction and 
preparation has been substantially finished since 1992, has yet to 
open. Finally, a delay jeopardizes disposal agreements between DOE and 
various states such as Idaho, whose Governor recently wrote the 
President to express his grave concerns on this matter.
    A fundamental problem appears to be EPA's inability to follow its 
own guidelines. Primarily, 40 CFR 191 and 194 contain guidelines for 
the regulatory process requiring EPA to evaluate the DOE Compliance 
Certification Application based on ``reasonable expectations'', not the 
worst case standards currently being employed. EPA's decision to not 
follow its own guidelines has had serious ramifications on the review 
process while causing DOE to meet standards of proof far exceeding 
those contemplated in the original EPA guidelines.
    When the WIPP Land Withdrawal Act Amendments were drafted, at EPA's 
suggestion, Congress distinguished between issuance of the 
application's completeness and the need for additional technical or 
clarifying information that might arise during the year-long review of 
the application. Specifically, Congress provided only 45 days from the 
date of submission of the complete application (October 29, 1996) for 
EPA to seek additional information from the DOE for completeness. 
Requests after that deadline were specifically allowed through a 
provision allowing the EPA ``to request at any time additional 
information from the Secretary (of Energy) to certify, pursuant to 
subparagraph (B), whether the WIPP facility would comply with the final 
disposal regulations.'' Even though EPA suggested the language that 
draws the distinction, EPA has refused to separate the two issues, 
insisting that its requests for technical and clarifying information 
are indicative of an incomplete application. We believe this is a 
stalling tactic intended to delay a certification decision regarding 
the WIPP.
    A particularly glaring case of EPA's failure to use the reasonable 
expectation standard while combining the completeness and technical 
sufficiency issues is vividly clear in the request for additional 
materials dealing with parameter evaluations, parameter variance 
determinations, and confirmatory performance assessments. In essence, 
EPA appears to be preparing to duplicate and rerun all of the computer 
codes which Sandia National Laboratories developed and perfected over 
the years. It is doubtful that EPA can complete the process in a 
reasonable time frame. In fact, duplication of DOE's previously 
completed work does not add to the body of knowledge which contently 
exists. However, it does bring to light the following question: Is EPA 
overfunded to the degree that it can arbitrarily expend time and 
resources to duplicate DOE's previously completed jobs?
    We propose that the EPA evaluate the views of the National Academy 
of Sciences and also seek valuable insights from the Nuclear Regulatory 
Commission's process of making similar regulatory decisions. We 
strongly suggest that the two agencies clearly differentiate between 
completeness and technical sufficiency in any further requests for the 
information needed for a completeness determination. In addition, EPA 
must follow the Congressional mandate and begin the interactive review 
process leading to a regulatory decision. We see no scientific, legal, 
or technical reasons for EPA to duplicate DOE's computer codes. We do 
find strong and compelling reasons to follow ``reasonable expectation'' 
guidelines issued in 40 CFR 191 and 194 in reviewing the protection of 
human health and safety guidelines. Finally, we would ask both agencies 
to report to Congress the timetable for completion of the regulatory 
process, recognizing that it is already five months behind schedule.
    We can no longer accept the ambiguous and arbitrary nature of DOE's 
or EPA's handling of the WIPP, particularly in light of Congress's 
clear intent with the WIPP Land Withdrawal Act Amendments signed into 
law last year. We strongly encourage both agencies to redouble your 
efforts to complete those activities necessary to begin receiving waste 
in this important disposal facility.
    Sincerely,
                                   Joe Skeen,
                                   Dan Schaefer,
                                   Joe McDade,
                                   Jerry Lewis,
                                   Duncan Hunter,
                                   Mike Crapo,
                                   Lindsey Graham,
                                   Doc Hastings,
                                   Zach Wamp,
                                   Helen Chenowith,
                                               Members of Congress.
                                   Pete Domenici,
                                   Strom Thurmond,
                                   Frank Murkowski,
                                   Larry Craig,
                                   Dirk Kempthorne,
                                                     U.S. Senators.

    Senator Domenici. I think the administration, in the past, 
through the Secretary of Energy, has committed to this project 
and said they support it. So what concerns me is that we ought 
to have those who work for the President trying to get the job 
done. And I am not suggesting so far that EPA is not trying to. 
They had indicated a great degree of cooperation, and I think 
it worked out very well in setting new standards, which have 
been challenged. And the hearing is going to take place today, 
I think, in one of the courts here in Washington, DC. I think 
three court judges are going to hear that today.
    Hopefully they have been as careful as men and women can 
be, and DOE will prevail, and our Environmental Protection 
Agency. But I may, before I go to markup on this, have to get 
both the Department and the Environmental Protection Agency up 
here together and just ask them where we are going.
    How much money have we spent on the WIPP, does anybody 
remember? For more than 10 years, $250 million or $300 million 
a year. It is a pretty good project. We ought to have some 
pretty good engineering from what I can tell.
    Did you have anything else you wanted to add?
    Mr. Alm. No; I just wanted to say that I appreciated this 
opportunity and I appreciate, really, the support that this 
committee has given me. My job is a very challenging and an 
awesome job. And I really feel that the expenditure of these 
funds--and they are a large amount of money--and it is very, 
very important that these funds are spent in the most 
productive way possible. And I certainly commit to that end.

                     Additional committee questions

    Senator Domenici. Well, I think you have exhibited that and 
indicated that. You saw me, for those young people, indicate 
just some relative expenditures. But for cleanup now, we are 
going to spend about one-half of what we are going to spend for 
all of the medical and science research on health in the whole 
of our country. That is a $12.5 billion to $13 billion 
enterprise. And we are going to spend $7.5 billion, almost $8 
billion, on this cleanup. So it is very important, in terms of 
making sure we have money for other things by getting this job 
done sooner rather than later.
    Thank you very much.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]

                 Question Submitted by Senator Domenici

                    fiscal year 1998 budget request
    Question. Does the budget request for fiscal year 1998, exclusive 
of the privatization initiative, meet DOE's legal and regulatory 
compliance requirements?
    Answer. The EM budget request for fiscal year 1998 is expected to 
provide sufficient financial resources to meet the Department's legal 
and regulatory compliance requirements, and commitments to the Defense 
Nuclear Facilities Safety Board. As the program resources become more 
limited, innovation and close collaboration with regulators and 
stakeholders will be required to achieve the objective of meeting our 
compliance requirements in the most practical and efficient manner 
possible. We will work closely with regulators and the DNFSB to assure 
that we are able to reach agreement on how to achieve this objective.
                             privatization
    Question. It appears that there are three elements central to DOE's 
ability to be successful in the privatization initiative: (1) DOE must 
be able to accurately characterize the waste stream being delivered to 
the private contractor for processing, (2) DOE must be able to prepare 
tight, well-defined construction and procurement contracts and provide 
firm management oversight in order to limit Federal liability, (3) DOE 
must provide a stable, predictable regulatory environment. Could you 
discuss what DOE has done or plans to do to ensure success in each of 
these areas.
    Answer. First, each privatization contract will define the waste to 
be processed. DOE will develop these definitions in such a way that 
there is sufficient specificity to allow a contractor to price the work 
to be done while also allowing DOE an appropriate level of flexibility. 
During processing, DOE will verify that the waste being provided to the 
contractors is consistent with the requirements of the specific 
contract. An example of this approach is the waste ``envelopes'' 
identified in the Hanford Tank Waste Remediation System (TWRS) 
privatization contracts. These envelopes were developed using existing 
characterization information for the wastes to be processed and thus 
provide assurance that DOE will be able to provide the contractors with 
waste that meets the specifications set forth in the contracts. In 
implementing this approach on TWRS, DOE will provide waste that is 
within these limits. Prior to providing a batch of waste to the 
contractor(s), DOE will verify that the composition of the batch is 
within the appropriate envelope and, if needed, make any adjustments 
required to bring the waste into specification.
    Second, DOE is developing tight, well-defined construction and 
treatment contracts. These contracts will be specific about interfaces 
with the Department, including any materials (e.g., waste) or services 
(e.g., effluent treatment) that the Department will be providing. The 
contracts also will clearly define the respective responsibilities of 
the Department and the contractor with respect to safety, health and 
environmental requirements (e.g., who is responsible for obtaining any 
required permits) and business/finance issues (e.g., specifying the 
timing/basis for paying the contractor for the goods or services called 
for in the contract).
    Third, DOE's primary strategy for achieving a stable regulatory 
environment is to transition, to the extent practicable, to external 
regulation of contractor activities. These external regulators include 
the Occupational Safety and Health Administration, Environmental 
Protection Agency, Nuclear Regulatory Commission, as well as state 
agencies such as the Washington State Department of Ecology. Where 
regulatory oversight continues to be provided by the Department, 
systems will be put in place that will help ensure that the 
requirements placed on the contractor are well-defined and appropriate 
for the work to be performed by the contractor.
    An example of the approach is the Regulatory Unit that will report 
to the Manager of the Richland Operations Office, and will provide 
nuclear, radiological, and process safety regulatory oversight of the 
Hanford Tank Waste Remediation System privatization contractor(s). This 
unit is working closely with the Nuclear Regulatory Commission to 
assure that the requirements developed parallel those of NRC.
    Question. How long will it take the Department to have experienced 
personnel in place to oversee and manage specific contract performance?
    Answer. DOE has experienced personnel in the line organizations to 
manage and oversee privatization projects. There are certain skills, 
such as finance and insurance, in short supply among Federal staff. 
However, this problem has been addressed by procuring outside services. 
For example, with respect to the Hanford Tank Waste Remediation System 
contract, the Department has procured financial advice from a firm with 
broad experience in worldwide project finance. In addition, the 
Department must address increasing workloads in areas such as workforce 
transition, cost estimation, and legal counsel.
    In an effort to augment the management capability of the 
privatization program, the Secretary also intends to appoint a senior 
individual to guide and coordinate the implementation of the 
Department's privatization initiatives. This individual will report 
directly to the Deputy Secretary/Chief Operating Officer. Further, the 
Office of Environmental Management, in coordination with other 
appropriate DOE offices, will strengthen training programs for DOE 
personnel involved in privatization initiatives, enhance DOE cost 
estimating capabilities, and expand and supplement DOE expertise in 
reviewing privatization solicitations and contracts.
                     project management activities
    Question. Has any thought been given to having another government 
agency, such as the U.S. Army Corps of Engineers, perform project 
management activities? If not, why?
    Answer. No. The Office of Environmental Management does not see the 
need at this time to employ the services of another governmental agency 
to perform project management activities at our sites. We believe that 
our current federal and contractor personnel provide us with the 
experience needed to manage these activities. The Department has a very 
good project management training program to supplement the staff's 
existing profit management expertise as well as train entry level 
employees through our senior-level project management staff. A recent 
independent assessment of Office of Environmental Management field 
sites by the Corps of Engineers found the quality of the baseline 
technical scope, estimate documentation, project schedules, and the 
relationships between the technical scope and cost estimates to be 
good. As we continue to projectize the Environmental Management program 
our staff will continue to improve these aspects of our project 
management.
                           future use project
    Question. A significant factor in reducing cleanup costs is the 
ultimate use of the area in question. What progress has been made in 
injecting a sense of reality into the land use issue? What are the 
potential savings if more realistic land use assumptions were used?
    Answer. Given the importance of land use to DOE's work, the 
Department has undertaken a number of planning efforts to ensure that 
land use considerations are properly weighed in its decisions. The 
Future Use Project represents the Department's most comprehensive 
effort to evaluate future use options at DOE sites. As part of the 
Future Use Project, twenty DOE sites worked with affected governments 
and communities to develop future use recommendations that could guide 
environmental management as well as reuse decisions.
    The Project culminated in the release of Charting the Course, a 
report that delineates future use recommendations and provides site 
maps. The recommendations designate parcels according to six land use 
categories: agricultural; residential; recreational; industrial/
commercial; open space; and storage and disposal. At the time of 
publication, sixteen DOE sites had completed future use plans and 
corresponding site maps. In total, the recommendations called for open 
space and industrial/commercial uses for the vast majority of land 
considered. Less than one percent of the land evaluated was selected 
for residential and agricultural uses, which require more stringent 
cleanup levels. (Furthermore, in all cases, recommendations only called 
for residential use in non-contaminated areas.)
    The Baseline Environmental Management Report analysis validates 
that DOE's current land use goals are realistic and do not call for 
``cadillac'' cleanups. Furthermore, the Future Use Project 
recommendations were generated with significant public input and 
demonstrate that affected communities support realistic land use 
standards.
                             privatization
    Question. The fiscal year 1997 budget included $330 million for 
privatization projects and the fiscal year 1998 budget requests $1.006 
billion for privatization. What are DOE's plans for this program in 
future years?
    Answer. The Department's fiscal year 1997 budget and fiscal year 
1998 budget request include twelve privatization projects. The 
President's fiscal year 1998 budget request is for $1.006 billion for 
the privatization program. For the outyears, the President's budget 
includes $800 million for the program in fiscal year 1999; $600 million 
in fiscal year 2000; $600 million in fiscal year 2001; and $0 in fiscal 
year 2002. Of the $600 million expected to be requested in fiscal year 
2000 and fiscal year 2001, $64 million in fiscal year 2000 and $464 
million in fiscal year 2001 is set aside as a reserve. Whether new 
projects are undertaken from this reserve, or whether additional budget 
authority will be requested, will depend on the amount previously 
appropriated for existing privatization projects.
    Question. Tell the committee how DOE determined that the financing 
initiative which is proposed in the 1998 budget was the best approach?
    Answer. To improve the cost effectiveness and schedule for the work 
of the Environmental Management program, the Department has been 
considering alternatives to the traditional Management and Operating 
(M&O) contracting method. Increasingly, the Department has been using 
fixed-price contracts and other incentive-based contracting methods to 
reduce its costs and obtain the most effective contracts. The 
Department believes that privatization will, in appropriate 
circumstances, be very effective in reducing costs and accelerating 
schedules. In effect, the private sector will provide the funding and 
assume many of the risks that were formerly borne by the Department. 
The competitive process alone should sharply reduce the costs to the 
Department of the contracted products or services. This approach should 
also substantially reduce the Department's need to build and maintain 
its own facilities to produce the needed product or service. The effect 
will be to reduce the Department's life-cycle costs for the project and 
place the performance risk on the contractors. Several small 
privatization projects conducted to date have demonstrated that 
significant savings can be realized through this approach. 
Additionally, several studies and project analyses have been conducted 
that indicate a benefit to the Government from privatization. For these 
reasons, we have made privatization a key element in our plans to 
accelerate cleanup of the DOE complex.
    Question. Isn't this the kind of work that the Federal government 
should undertake, and not shift risk and responsibility to the private 
sector?
    Answer. Under privatization, the Department remains responsible and 
accountable to the public for successful cleanup activities. However, 
DOE is seeking ways to partner with private industry with demonstrated 
expertise in similar projects to more efficiently and cost effectively 
accomplish our environmental projects. Increased performance risk on 
the contractor is expected to spur improvements in cost, quality, and 
schedule. Similar privatization approaches have been used with success 
by the Department of Defense.

                    ESTIMATED SAVINGS FROM CANDIDATE FISCAL YEAR 1998 PRIVATIZATION PROJECTS                    
                                              [Millions of dollars]                                             
----------------------------------------------------------------------------------------------------------------
                                                                          Preliminary life cycle                
                                                                            cost estimates \1\                  
                                                              Fiscal    (escalated at 2.7 percent   Preliminary 
            Project name                      Site           year 1998          annually)           cost savings
                                                              funding  --------------------------- estimates \1\
                                                                            M&O     Privatization               
----------------------------------------------------------------------------------------------------------------
TRU waste treatment................  OR...................          77         585           455            130 
TWRS phase 1.......................  RL...................         427       5,450         3,954          1,496 
TRU transportation services........  CAO..................          29         854           758             96 
INEL lAW treatment.................  ID...................           3         500           404             96 
Power burst facility deactivation..  ID...................           8          11             8              3 
Spent nuclear fuel dry/store.......  ID...................         108         166           133             33 
EM waste disposal..................  OR...................          85         298           170            128 
Waste pits remedial action (OU-1)..  OH...................          30         170           160             10 
FEMP silo 3 waste treat............  OH...................          11          26            24              2 
Building 779 decon. and decomm.....  RF...................          23          47            25              2 
Decommission building 886..........  RF...................          13          40            14             26 
Spent nuclear fuel dry/store.......  SR...................         192       1,415         1,262            153 
                                    ----------------------------------------------------------------------------
      Total........................  .....................       1,006       9,562         7,367          2,195 
----------------------------------------------------------------------------------------------------------------
\1\ Cost estimates include both capital and operating data.                                                     

    Question. What other privatization approaches were considered?
    Answer. In working to improve the cost effectiveness and schedule 
for the work of the Environmental Management program, the Department 
generally considered several different basic contracting approaches. 
DOE and its predecessors have always relied on private sector 
contractors to carry out a significant portion of the Department's 
work. The traditional model was the Management and Operating (M&O) cost 
plus fee approach. Other models DOE has used include the M&O plus 
performance fee; the Management and Integrating (M&I) approach, fixed.
    Studies and analyses that indicate that privatization of specific 
projects should prove to be cost effective include the following:
  --Three independent feasibility studies completed for the DOE Idaho 
        Operations Office all determined that the Advanced Mixed Waste 
        Treatment Facility was a feasible and cost-effective project to 
        be completed by the private sector.
  --A Systematic Look at TWRS Privatization, prepared by Pacific 
        Northwest Laboratory, Richland, Washington, January 1995. This 
        was the preliminary feasibility study for TWRS privatization 
        and took a first look at issues surrounding: a workable project 
        scope, site interfaces, and regulatory drivers. A conclusion 
        from the study was that the TWRS project scope should be 
        segregated into manageable phases and that Phase I, the 
        pretreatment and immobilization function, could in principle be 
        privatized.
  --Argonne National Laboratory report, ``Estimating the Impact of Key 
        Programmatic Risk Allocation Decisions on Phase I Bids and DOE 
        Cost'' was developed to facilitate the TWRS contract 
        negotiations and analyzed the allocation of major privatization 
        risks between DOE and vendors. The conclusions supported DOE 
        negotiations with a clearer understanding of the connection 
        between risk sharing and the availability of reasonable 
        financing. A key conclusion of the analysis was that shifting 
        the technical and performance risk from the contractor(s) to 
        DOE (essentially what progress payments would do) would 
        increase DOE's total costs substantially.
  --Cost effectiveness analyses also were performed, in accordance with 
        OMB Circular A-94, on privatization projects. These analyses 
        specifically compared the estimated costs of privatization to 
        accomplishing the same work under the traditional Management 
        and Operating contractor approach.
    Question. What evidence, e.g., studies or analysis, supports the 
approach presented in the budget request? What evidence, e.g., studies 
or analysis, supports the conclusion that using private sector 
financing will cost the government less than if the government financed 
the fixed-price contracts through progress payments?
    Answer. As discussed below, numerous studies indicate projected 
cost savings from privatization of specific projects. Although private 
sector financing is generally more expensive than government financing, 
the privatization approach is intended to obtain improvements in 
technical, cost, and schedule performance that outweigh the increased 
financing costs. A key element of EM privatization is that a contractor 
is generally paid only for successfully completed services or products 
that meet the requirements specified in a contract.
    Although progress payments under fixed-price contracts may be 
acceptable in certain circumstances, such progress payments 
significantly weaken pressures for strong performance. Progress 
payments prior to completed services or products, increase the 
government's risk because such payments do not necessarily provide 
payment for satisfactory performance of waste treatment services, for 
example. Instead, they provide payment for what may be acceptable 
interim deliverables that may or may not result in a system capable of 
providing the product or service being procured. Once progress payments 
have been made for what may ultimately be an nonviable service/product, 
there is little likelihood of recovering the payments without invoking 
a Termination for Default. And if the service/product is provided by a 
limited liability corporation (LLC) without parent corporation or other 
appropriate financial guarantees, the Department's recourse in the 
event of a Termination for Default is limited to the total assets of 
the LLC. These assets may be extremely limited. Thus, progress payments 
can result in a major (disproportionate) shift of performance risk and 
costs from the contractors to the DOE.
    Also, when a substantial portion of the project financing is 
contractor-provided equity, the contractor is most motivated to be a 
diligent steward of those funds and to make correct, enabling decisions 
and efficiencies in order to obtain return of that capital. The 
pressures of rewards for satisfactory performance coupled with the 
harsh penalties for unsatisfactory performance encourage participants 
at all levels to strive for the former. Under private financing for the 
contractor, the financing group serves as an interested third party for 
review and judgement of the project from its start through completion. 
If the contractor gets into difficulty, his financial backers usually 
will have the option and certainly will have the motivation to take 
effective corrective action, even to the extent of taking over the 
facility and installing an alternate/new manager to run the operations.
    Studies and analyses that indicate that privatization of specific 
projects should prove to be cost effective include the following:
  --Three independent feasibility studies completed for the DOE Idaho 
        Operations Office all determined that the Advanced Mixed Waste 
        Treatment Facility was a feasible and cost-effective project to 
        be completed by the private sector.
  --A Systematic Look at TWRS Privatization, prepared by Pacific 
        Northwest Laboratory, Richland, Washington, January 1995. This 
        was the preliminary feasibility study for TWRS privatization 
        and took a first look at issues surrounding: a workable project 
        scope, site interfaces, and regulatory drivers. A conclusion 
        from the study was that the TWRS project scope should be 
        segregated into manageable phases and that Phase I, the 
        pretreatment and immobilization function, could in principle be 
        privatized.
  --Argonne National Laboratory report, ``Estimating the Impact of Key 
        Programmatic Risk Allocation Decisions on Phase I Bids and DOE 
        Cost'' was developed to facilitate the TWRS contract 
        negotiations and analyzed the allocation of major privatization 
        risks between DOE and vendors. The conclusions supported DOE 
        negotiations with a clearer understanding of the connection 
        between risk sharing and the availability of reasonable 
        financing. A key conclusion of the analysis was that shifting 
        the technical and performance risk from the contractor(s) to 
        DOE (essentially what progress payments would do) would 
        increase DOE's total costs substantially.
  --Cost effectiveness analyses also were performed, in accordance with 
        OMB Circular A-94, on privatization projects. These analyses 
        specifically compared the estimated costs of privatization to 
        accomplishing the same work under the traditional Management 
        and Operating contractor approach.
    Question. What savings are expected to be realized from the 
privatization approach and what is the basis of the estimate?
    Answer. Privatizing projects is expected to be much more cost 
effective than pursuing a traditional Management and Operating (M&O) 
contract approach. Significant savings should be realized from the 
competitive process alone. The savings expected for each privatization 
project approach are shown in the attached tables.
    Many of these estimates are based on comparison of privatization 
bids to detailed cost estimates by Management and Operating 
contractors. Most estimates are based on detailed estimates, 
feasibility studies, or comparative estimates based on analogous costs 
from other sites. In some cases, the estimates include cost factors 
based on professional cost engineering judgement.
    Question. How did DOE establish baseline costs for individual 
projects in order to determine anticipated savings?
    Answer. Baseline costs were developed through a variety of methods, 
as shown in the attached table.

                                                BASE OF ESTIMATE                                                
----------------------------------------------------------------------------------------------------------------
                                                                 Basis of estimate                              
              Project                     Field office      ---------------------------   Comments/explanation  
                                                                 M&O     Privatization                          
----------------------------------------------------------------------------------------------------------------
Prefiscal year 1997 privatization                                                                               
 projects:                                                                                                      
    Lundry.........................  ID....................           2             1   Fixed price contract    
    Pit 9..........................  ID....................           3             1   Privatization Contract  
                                                                                         awarded in October     
                                                                                         1994. Independent cost 
                                                                                         estimate performed by  
                                                                                         ERM Inc.               
    Laundry........................  RL....................           4             1   Life Cycle Cost Analysis
                                                                                         verified privatization 
                                                                                         savings in May 1992.   
                                                                                         Privatization Contract 
                                                                                         awarded in August 1992.
    Thermal treatment..............  RL....................           5             1   M&O Estimate based on   
                                                                                         different waste streams
                                                                                         so direct comparison of
                                                                                         savings is not         
                                                                                         appropriate.           
    M-area mixed waste.............  SR....................           4             1   Vendor: GTS Duratek.    
Fiscal year 1997 EM privatization                                                                               
 projects:                                                                                                      
    Advanced mixed waste...........  ID....................           4             1   M&O detailed estimate;  
                                                                                         privatization fixed    
                                                                                         price contract.        
    TRU sludge waste treatment.....  OR....................           3             3   Independent Cost        
                                                                                         Estimate performed for 
                                                                                         both M&O and           
                                                                                         Privatization (Jacobs  
                                                                                         Engineering).          
    Broad spectrum LLMW............  OR....................           4             4   Parametric cost         
                                                                                         estimates; using       
                                                                                         private sector         
                                                                                         estimates and costs for
                                                                                         M&O onsite operations. 
    Tank waste remediation system--  RL....................           5             1   Developed using M&O     
     Phase 1.                                                                            costs for same         
                                                                                         facility.              
Fiscal year 1998 EM privatization                                                                               
 projects:                                                                                                      
    TRU transportation.............  CAO...................           2             4   M&O contract awarded to 
                                                                                         Westinghouse in fiscal 
                                                                                         year 1995.             
                                                                                         Privatization estimate 
                                                                                         developed by DOE       
                                                                                         project managers       
                                                                                         (Independent estimate  
                                                                                         by CTAC to be completed
                                                                                         mid April).            
    Low activity waste treatment...  ID....................           4             6   Feasibility study/cost  
                                                                                         estimate by October    
                                                                                         1997.                  
    Power burst facility             ID....................           5             6   Draft REP by December   
     deactivation.                                                                       1997.                  
    Spent nuclear fuel dry/store...  ID....................           5             6   Detailed estimate in    
                                                                                         process. Draft REP by  
                                                                                         September 1997.        
    Silo 3 (OU-4)..................  OH....................           5             6   M&O to level 4 by       
                                                                                         November 1997.         
                                                                                         Privatization to level 
                                                                                         1 by Febnuary 1998.    
    Waste pits remedial action (OU-  OH....................           5             5   Privatization estimate  
     1).                                                                                 to Level 1 by July     
                                                                                         1997.                  
    EM waste disposal..............  OR....................           5             4   Peer review done on     
                                                                                         feasibility study.     
    TRU solid waste treatment......  OR....................           3             3   Independent cost        
                                                                                         estimate performed for 
                                                                                         M&O and privatization  
                                                                                         (Jacobs Engineering).  
    Tank waste remediation system--  RL....................           5             1   Developed using M&O     
     Phase 1.                                                                            costs for same         
                                                                                         facility. Currently not-
                                                                                         to-exceed contract     
                                                                                         price with firm fixed  
                                                                                         prices by January 1998.
    Building 779 D&D...............  RF....................           4             4   Bottoms-up cost estimate
                                                                                         by the M&I            
                                                                                         privatization assumed  
                                                                                         to be percentage of    
                                                                                         M&I.                   
    Decommission building 886......  RF....................           4             4   Bottoms-up cost estimate
                                                                                         by the M&I            
                                                                                         privatization assumed  
                                                                                         to be percentage of    
                                                                                         M&I.                   
    Spent nuclear fuel dry/store...  SR....................           5             6   M&O and privatization   
                                                                                         based on generic spent 
                                                                                         fuel facility estimates
                                                                                         from ID, modified to   
                                                                                         reflect a concept      
                                                                                         recommended by the     
                                                                                         Research Reactor Task  
                                                                                         Team Report.           
----------------------------------------------------------------------------------------------------------------
Note: Key-Basis of cost estimates                                                                               
  1=Firm fixed price contract.                                                                                  
  2=Cost reimbursement contract with contractually binding performance incentives.                              
  3=Validated bottoms-up estimate/independent cost estimates/peer review.                                       
  4=Detailed estimate.                                                                                          
  5=Budgetary estimate/conceptual estimate/feasibility study.                                                   
  6=Best professional judgement.                                                                                

    Question. Rather than asking for $1.006 billion to conduct a large 
privatization experiment that is estimated to cost the taxpayer over $8 
billion, wouldn't it be more prudent to use a smaller, more well-
defined set of projects on which to test the privatization concept?
    Answer. The Department has been experimenting with privatization 
since 1993. The initial projects such as the Hanford laundry and the 
Idaho laundry were smaller and have realized significant savings 
compared to the Management and Operating (M&O) contractor approach.
    The privatization projects included in the Department's fiscal year 
1998 budget request range from small, straight-forward projects to 
large, technically complex projects such as the Tank Waste Remediation 
System. In all cases, the Department has defined the product or service 
to be delivered by the project. We believe the advantages of the 
selected privatization projects outweigh the risks since the taxpayer 
will only pay for these products or services upon successful 
performance by the contractor. If these projects were conducted using 
the traditional M&O approach, funds would be expended for essentially 
all costs incurred, whether the project is successful or not. Finally, 
we simply cannot afford to continue our traditional contracting methods 
and expect to make substantial, cost effective progress in our cleanup 
over the next decade. The privatization acquisition strategy is an 
essential component of our path towards remediating our sites.
    Question. What steps have been taken or are contemplated to ensure 
proper oversight will be conducted of the privatized contractors? For 
example, while most would agree that DOE should not meddle in the day-
to-day operations of the privatized contractors, what specific actions 
are you prepared to take to ensure that contracts are well drawn, that 
appropriate monitoring is occurring, and that necessary quality 
assurance processes are in place to ensure that the treated waste it 
receives meets specifications?
    Answer. To manage and oversee the privatized projects, the Office 
of Environmental Management is establishing a leadership team with 
experience in project financing, management, legal, procurement, and 
financial issues to help share and direct the program. The team will 
review all draft Requests for Proposals to ensure lessons learned from 
prior privatization projects are incorporated and ensure that 
information is shared across the complex. Qualified field project 
managers and procurement specialists will scope the work to be 
performed, review proposals for technical and financial adequacy, 
monitor progress and structure reviews of the scope, bids and progress 
of privatized projects. In addition, the experience that field project 
managers bring to the job is that they have been, or will be, trained 
in all aspects of the privatization program and its unique challenges. 
Contractor project managers and staff with proven track records of 
performing work similar to the DOE projects will be sought.
    The project manager is usually the most important ingredient in a 
successful project. DOE will carefully review project managers proposed 
by contractors, and will reserve the right to require the contractor to 
make a change under certain conditions.
    DOE will ensure that management control is maintained, and that the 
government is well informed about the progress of the work. DOE will 
conduct senior level reviews for complex projects during scope of work 
development, conceptual design, and final design, at critical junctures 
during construction, at delivery of first product or service, and at 
other times as desirable. In addition, other mechanisms to improve 
project management will assure that regulatory, technical, safety, and 
health projects requirements are clearly defined and the respective 
roles of parties in changing or approving project requirements is 
clearly articulated. The overall goal is to manage the contracts, not 
the contractors.
    As in the case with the Tank Waste Remediation System at Hanford, 
moving to subsequent phases of multiple-phased procurements will 
require DOE authorization to proceed based upon an evaluation of 
contractor technical, financial, and regulatory approaches, and a 
determination of their viability.
    Management actions later in the projects will focus on ensuring 
that product specifications and acceptance procedures are clearly 
defined and implemented; waste feed is provided in the right amounts at 
the right time (where applicable); private contractor products are 
reviewed; and all efforts are integrated. Management of the contracts 
will require establishing and maintaining the technical and 
programmatic baselines; establishing and managing contracts; 
authorizing and funding work; establishing a quality assurance and 
control program and environmental, safety and health programs that will 
be contractual requirements; and communications with external 
organizations and stakeholders.
    Question. Why did DOE favor privatization projects for selection 
that had capital components over projects that involved only operating 
funds?
    Answer. The Department has already successfully privatized a number 
of operations (as opposed to capital) projects such as contaminated 
laundry services at Hanford and Idaho National Engineering and 
Environmental Laboratory. Experience with these projects led EM to 
privatize small waste management projects such as low level radioactive 
waste treatment at M Area at the Savannah River Site. These projects 
provided a cost-effective means of obtaining needed services. The 
Department will continue to look for similar opportunities to privatize 
operations activities when it is cost effective. Privatizing operations 
activities differs from privatizing capital projects in that they do 
not require up-front budget authority. Rather they are executed as a 
matter of routine business.
    Privatization provides a vehicle for the Department to get out of a 
portion of the construction and facility business. The facilities used 
for privatized work will be contractor financed and owned. It will 
allow the Department to purchase a product or service without having to 
build new facilities that would become another liability at a time when 
we are trying to reach closure at our sites. The contractor will be 
responsible for decontamination and decommissioning of facilities in 
compliance with applicable requirements.
    Question. Was it to defer outlays beyond 2002 so that more projects 
could be started in the near term?
    Answer. No. These projects are being requested now because 
deferring them will cause compliance problems or result in unfundable 
outyear budget ``spikes.'' If the Department were not pursuing 
privatization of the projects, EM would have requested additional 
funding to proceed with these projects using its Management and 
Operating/Management and Integration contractors. Instead, by using a 
privatization approach outlays will not occur until the contractor 
begins to deliver the product or service that meets contract 
specifications. Substantial outlays will not begin until 2002, mainly 
due to the fact that the two largest projects (Advanced Mixed Waste 
Treatment and Tank Waste Remediation System) do not begin operations 
until 2002 or beyond. This is an advantage since private sector 
financing will be at risk during this period of time, which provides a 
major incentive for contractors to bring facilities on-line and deliver 
services that meet contract specifications as soon as possible. If the 
traditional Management and Operating approach was used for these 
capital-intense projects, it is clear that schedules would be extended, 
costs would be greater, and the incentive to succeed would not be 
nearly as great. Enabling necessary work to commence sooner through 
privatization will help accelerate the pace of cleanup and reduce 
mortgages.
    Question. Doesn't the privatization initiative give DOE greater 
control and discretion than if the proposed projects were line items, 
since funds can be used for different projects without reprogramming 
action?
    Answer. The fiscal year 1998 budget request presents the 
privatization projects we intend to fund and the level of funding for 
each. We recognize that the funding associated with these projects is 
very significant. The Department has submitted proposed authorization 
language to establish controls for privatization projects, similar to 
line-item controls. We are willing to work with your Committee and the 
Congress to develop additional appropriate funding controls for these 
projects.
    Question. Given that DOE has promised to consult with the Congress, 
wouldn't it be better to treat the projects as line items where 
Congressional control would be greater?
    Answer. The Department does not object to the treatment of 
privatization projects as line items.
    Question. Does the Federal government accept any liability for the 
cost estimate of the contractor since it has legal responsibility to 
dispose of the waste? Since DOE has the legal obligation to dispose of 
the wastes, what happens if a contractor fails to perform?
    Answer. In general, DOE does not intend to accept liability for 
cost estimates of contractors who perform work under fixed-price 
contracts. It is possible, however, that in particular cases, DOE and 
the contractor might agree to some contractual provisions which would 
allocate risks for erroneous cost estimates under a fixed-price 
contract (e.g., if specified contingencies arise). It is also possible 
that grounds for contract claims might be raised by contractors in 
certain recognized circumstances (e.g., impossibility of performance). 
But as a general principle, DOE does not intend to accept liability for 
erroneous contractor cost estimates in fixed-price contracts because 
DOE believes that under such contracts the contractor should bear the 
burden of performing within the price, time frame and other 
requirements agreed to by the parties.
    With regard to any responsibility by DOE to ultimately assure that 
waste for which DOE is legally liable is disposed of, DOE would retain 
the right to terminate a contractor for default if it does not meet its 
contractual obligations and to engage another contractor to complete 
the necessary work. In such a case, DOE would have the right to assess 
damages against the defaulted contractor for reprocurement costs that 
DOE might incur.
    Question. Now the budget request for fiscal year 1998 includes 11 
new privatization projects. How were these projects selected for 
inclusion in the 1998 budget? Do DOE regulators and stakeholders agree 
with the approach DOE is proposing to use for these projects?
    Answer. The 11 new projects selected for the fiscal year 1998 
request were selected from a list of over 40 candidates. The projects 
were selected after considering several factors, including cost 
effectiveness, cost engineering data, project definition/
characterization (i.e., is there a definable end product or service) 
and stakeholder/regulator issues. When the Department's Congressional 
budget request was submitted, these 11 projects appeared to have the 
characteristics required of good firm fixed-priced contract candidates. 
As the fiscal year 1998 budget was formulated, regulators and 
stakeholders were made aware that these 11 projects were to be included 
as privatization candidates and were generally supportive. As the 
competitive process for these projects progresses, each project will 
continue to be evaluated as new information becomes available that may 
affect the cost, scope or regulatory requirements of the project.
    Question. Which of the 11 projects were included in the EM program 
plan for initiation in fiscal year 1998?
    Answer. Twelve projects were included in the EM fiscal year 1998 
Congressional Budget Request (CBR). Of the twelve projects, the 
following eleven were included for initiation in fiscal year 1998: 
Contact Handled Transuranic Waste Transportation, Carlsbad; Spent 
Nuclear Fuel Dry Storage, Idaho; Environmental Management/Waste 
Management Disposal, Oak Ridge; Silo 3 Residue Waste Treatment, Ohio; 
Decommissioning Building 779, Rocky Flats; Decommissioning Building 
886, Rocky Flats; Power Burst Facility Deactivation, Idaho; Waste Pits 
Remedial Action, Ohio; Low Activity Waste Treatment, Idaho; Spent 
Nuclear Fuel Transfers & Storage, South Carolina; and Transuranic Solid 
Waste Treatment Project, Tennessee.
    The twelfth project, the Tank Waste Remediation System (Washington) 
was initiated in fiscal year 1997 and additional funding was requested 
in the CBR for this project.
    Question. Have any projects been moved up in time simply to take 
advantage of the privatization funds requested?
    Answer. No, the privatization projects in the budget request were 
proposed in fiscal year 1998 for several reasons. First, most of the 
projects were proposed in order to meet regulatory milestones. Delaying 
these projects would likely adversely affect the program's ability to 
meet compliance agreement milestones and could expose the Department to 
significant fines and penalties for noncompliance.
    Additionally, several privatization projects that are not 
compliance-driven were proposed in order to reduce program life-cycle 
costs and achieve other important program goals. Specifically, three of 
fiscal year 1998 privatization projects involve decontamination and 
decommissioning of facilities. The selection of these projects was not 
driven by the need to satisfy compliance milestones. These projects--
the Idaho Power Burst Facility deactivation, the Rocky Flats Building 
779 decommissioning, and the Rocky Flats Building 886 decommissioning--
were selected because of their strong mortgage reduction potential. The 
privatization funding will substantially reduce life-cycle costs.
    Another project--the Savannah River Site spent nuclear fuel 
transfer and storage facility--was not driven by regulatory milestones 
but rather by its mortgage reduction potential and its importance to 
implementing the foreign research spent nuclear fuel program, a key 
element of the Administration's non-proliferation policy. Managing 
spent nuclear fuel in the proposed dry storage facility will be 
significantly more cost-effective than maintaining it in the present 
aging wet storage facilities. Additionally, the project is needed to 
meet commitments made in the May 1996 Record of Decision for Foreign 
Research Reactor Spent Fuel that the fuel will be prepared for interim 
dry storage in a ``road ready'' form for shipping and disposal in a 
geologic depository. Finally, removing the fuel from wet storage is 
consistent with recommendations in the 1994 Action Plan to Resolve 
Spent Nuclear Fuel Vulnerabilities.
    Question. Why is only the capital portion of the projects reflected 
in the budget request? Doesn't this fail to show the true Federal 
obligation since it will cost $2.8 billion to construct the fiscal year 
1997 and 1998 projects, and it will cost an estimated $5.8 billion to 
operate them?
    Answer. Only the $3.33 billion capital portion of the projects is 
reflected in the budget request because the privatization account only 
funds the capital portion of privatization projects. The $5.8 billion 
in operating outlays will be funded out of the operating budget The 
fiscal year 1998 Congressional Data Sheets for the privatization 
projects do include the total project cost for each of the projects. 
The total project cost includes both the capital and operations costs 
for the total life cycle, and is presented in the Data Sheets by year.
    Question. Of the $639 million being requested for the 11 projects, 
how much will actually be spent in fiscal year 1998?
    Answer. None of the funding being requested for the 11 projects in 
fiscal year 1998 will be paid out in fiscal year 1998. All of the funds 
will be obligated to the 11 projects when the contracts are awarded. 
However, payments under the contracts will not occur until the 
contractor begins to deliver a product or service that meets the 
contract specifications or if the government terminates the contract 
for convenience.
    Question. Which of the projects could be deferred into fiscal year 
1999 or beyond?
    Answer. The Department believes that the President's budget request 
is the appropriate level to fund privatization in fiscal year 1998 and 
to provide assurances to the private sector of the Department's 
commitment to privatization. Deferral would increase outyear needs and 
affect budget caps under recent budget agreements.
    Insufficient funding for privatization in fiscal year 1998 would 
increase both the short- and long-term costs of the Environmental 
Management Program, would disrupt the progress that has been made in 
accelerating the cleanup of name of the Department's contaminated 
sites, and could subject the Department to significant fines and 
penalties for failure to meet milestones in compliance agreements and 
other legal requirements in 1998 and later years. Moreover, deferral of 
substantial funding for the Department's privatization program from 
fiscal year 1998 would be expected to cause serious problems because of 
the difficulty of obtaining major increases in outyear funding under 
the statutory caps on discretionary spending under the Bipartisan 
Budget Agreement. This situation will be exacerbated significantly if 
the Committee on Appropriations also rejects the Department's request 
for full up front funding for construction projects in the Defense 
Assets Account.
    We are willing to work with you to identify the impacts on any 
funding reductions below this level.
    Question. Which of the 12 projects are required to meet compliance 
agreements? Are all contained in the Ten Year Plan?
    Answer. Eight privatization projects included in the fiscal year 
1998 budget all involve important regulatory milestones that would be 
adversely impacted by delaying the projects. As described below slowing 
the pace of these privatization projects would likely adversely impact 
compliance agreement milestones and potentially result in significant 
fines and penalties for noncompliance:
    Carlsbad Area Office TRU Transportation.--Site-specific treatment 
plans developed under the Federal Facility Compliance Act and the 
associated consent orders and agreements with the states and EPA 
(across the DOE complex) require disposal of transuranic (TRU) wastes. 
For example, the Idaho Settlement Agreement requires the Department to 
begin shipment of INEEL TRU waste to WIPP by April 30, 1999 and to have 
shipped no less than 3,100 cubic meters by December 31, 2012. Slowing 
down privatization might diminish DOE's ability to transport TRU wastes 
located at various sites to WIPP for disposal and pose compliance 
problems for INEEL as well as Oak Ridge and Rocky Flats. The WIPP is 
expected to begin receiving wastes in 1998.
    Idaho Advanced Mixed Waste Treatment Facility.--The Idaho 
Settlement Agreement requires: treatment of TRU wastes to permit 
ultimate disposal outside the State of Idaho; facility construction 
completion by December 31, 2002; facility operation by March 31, 2003; 
and shipment of all TRU waste, currently estimated at 65,000 cubic 
meters in volume, at INEEL to WIPP or another facility by a target date 
of December 31, 2015, but in no event later than December 31, 2018. 
Slowing down privatization would affect waste treatment plans related 
to the privatized Idaho Advanced Mixed Waste Treatment Facility and 
would severely impact our ability to meet the 2002 milestone and could 
impact subsequent milestones. The extent to which these milestones are 
missed may also impact the Navy's schedule for shipping spent nuclear 
fuel to Idaho. This project does not require new budget authority in 
fiscal year 1998.
    Idaho Spent Nuclear Fuel Dry Storage.--The Idaho Settlement 
Agreement requires DOE to commence spent fuel loading into dry storage 
by July 1, 2003, and all spent fuel to be transferred from wet storage 
at the INEEL by December 31, 2003. This entire project is a fiscal year 
1998 privatization project. Delaying this project may compromise our 
ability to meet the 2003 milestone.
    Fernald Waste Pits Remedial Action.--This proposed fiscal year 1998 
privatization project is to excavate, process, treat and load for off-
site shipment low-level radioactive waste from eight waste pits. 
Enforceable milestones from the EPA-approved Remedial Action Work Plan 
include the initiation of operations (i.e., loading of waste) by March 
1, 1999; and completion of operations (including above-ground 
decontamination and decommissioning) by May 31, 2005. Delaying this 
project will cause non-compliance with the 1999 milestone.
    Oak Ridge TRU Waste Treatment.--This proposed fiscal year 1998 
privatization project is to meet the compliance requirements of the 
Tennessee Department of Environment and Conservation Commissioner's 
Order that the DOE initiate treatment of TRU waste by June 2002.
    Oak Ridge Broad Spectrum Low-Level Mixed Waste.--The Site Treatment 
Plan developed under the Federal Facility Compliance Act for the Oak 
Ridge Reservation (ORR) with the State of Tennessee requires a complete 
Statement of Work for treatment of low-level mixed waste by September 
30, 1998. DOE is proposing to use privatization as a means of obtaining 
the needed treatment capability.
    Oak Ridge EM/WM Disposal.--The Federal Facility Agreement 
enforceable milestones for ORR CERCLA cleanup are completion of a 
Remedial Investigation/Feasibility Study by July 1997, submittal of a 
Proposed Plan by October 1997, and issuance of a Record of Decision by 
April 1998. This fiscal year 1998 privatization project provides on-
site waste disposal capacity for these mandated cleanup activities.
    Richland TWRS Phase 1.--The Tri-Party Agreement among DOE, the 
State of Washington, and EPA requires immobilization of all tank waste 
by 2028. Delays in this project as a result of insufficient funding 
would subject the Department to fines and penalties for missed TPA 
milestones for the treatment of the tank wastes.
    It should be emphasized that privatization is a key element of the 
Environmental Management program's strategy to accelerate cleanup of 
its sites. Privatization of specific projects will reduce taxpayer 
costs and achieve the desired results more quickly. If privatization 
funds are not available to complete the designated twelve projects, 
they will need to be funded under the traditional budget authority. 
This will have a negative effect on other projects. By delaying these 
other projects, the Department will incur significant additional costs, 
lengthen completion schedules, and potentially cause other compliance 
problems. The privatization projects in the budget request were 
selected for their mortgage reduction, compliance, or non-proliferation 
benefits. All twelve of these projects are included in the Accelerating 
Cleanup: A Focus on 2006 Discussion Draft (Formerly the Ten-Year Plan). 
Specifically, three of the fiscal year 1998 privatization projects 
involve decontamination and decommissioning of facilities. The 
selection of these projects was not driven by the need to satisfy 
compliance against milestones. These projects--the Idaho Power Burst 
Facility deactivation, the Rocky Flats Building 779 decommissioning, 
and the Rocky Flats Building 886 decommissioning--were selected because 
of their strong mortgage reduction potential. The privatization funding 
will allow substantial acceleration of the work, thereby substantially 
reducing life-cycle costs.
    Another project--the Savannah River Site spent nuclear fuel 
transfer and storage facility--was not driven by regulatory milestones 
but rather by its mortgage reduction potential and its importance to 
implementing the foreign research reactor spent nuclear fuel program, a 
key element of the Administration's non-proliferation policy. Managing 
spent nuclear fuel in the proposed dry storage facility will be 
significantly more cost-effective than maintaining it in the present 
aging wet storage facilities. Additionally, the project is needed to 
meet commitments made in the May 1996 Record of Decision for Foreign 
Research Rector Spent Nuclear Fuel that the fuel will be prepared for 
interim dry storage in a ``road ready'' form for shipping and disposal 
in a geologic repository. Finally, removing the fuel from wet storage 
is consistent with recommendations in the 1994 Action Plan to Resolve 
Spent Nuclear Fuel Vulnerabilities.
          hanford tank waste remediation system (twrs) project
    Question. Briefly tell the committee about the Hanford Tank Waste 
Remediation System (TWRS) project which DOE is requesting $427 million 
for in fiscal year 1998. Explain the phasing of the project, the reason 
for each phase, and the options available to the Federal government at 
the end of each phase.
    Answer. The mission of the TWRS project is to store, treat, and 
immobilize highly radioactive Hanford Site waste (including current and 
future tank waste and cesium/strontium capsule disposition) in an 
environmentally sound, safe, secure, and cost-effective manner. The 
TWRS privatization project for which DOE is requesting $427 million in 
fiscal year 1998 deals with the treatment and immobilization of tank 
waste.
    The current approach to TWRS privatization is divided into Phase I 
and Phase II procurements. The current procurement is for Phase I, in 
which 6 percent to 13 percent of the tank waste will be treated and 
immobilized. Contracts for Phase I were signed on September 25, 1996 
with Lockheed Martin Advanced Environmental Systems and BNFL, Inc. 
Phase I will be completed in 2007 to 2011. Phase II will be a full-
scale production phase that will be initiated in 2004, completed in 
2028, and in which the remainder of the waste will be treated and 
immobilized.
    Phase I is divided into two parts, Part IA and Part IB. Part IA is 
the first 20 months of the Phase I contracts during which the 
contractors are preparing deliverables such as a technical report, a 
safeguards and security plan, a business and financial plan, and 
determining the fixed unit prices for treated waste during Part IB; 
Part IB is the remainder of the Phase I contracts during which 
facilities will be constructed and waste will be treated.
    At the end of Part IA, the government has the option to authorize 
none, one or both of the contractors to proceed with Part IB, based on 
the DOE's evaluation of the contractors' ability to meet contract 
requirements in Part IB, provide best value to the Government, and 
perform Part IB services for a reasonable price. A key feature of the 
Phase I contracts is that the contractor(s) authorized to proceed with 
Part IB will be paid only for successfully completed waste treatment 
services; they will receive no ``progress payments.'' The contractor(s) 
will be required to secure private financing (a combination of debt and 
equity) to cover their pre-operational expenses. This large front-end 
investment is expected to provide a substantial incentive to the 
contractor(s) to meet technical and schedule requirements.
    With respect to Phase II, the government has made no commitments to 
a particular approach to procuring/contracting for this work. The 
selected approach will be based, in large part, on the lessons learned 
from Phase I of TWRS privatization as well as other privatization 
projects (both by DOE and other Federal agencies).
    Question. What is the total capital cost of Phase IA and IB? Phase 
II? What is the estimated life cycle operating cost for each Phase and 
what is the increase in M&O costs over the life of the project? On what 
do you base these cost estimates?
    Answer. The attached table provides the current capital and expense 
estimates for the TWRS privatization, and M&I support, scope of work. 
The costs for Phase I and Phase II are based upon cost estimates 
developed in fiscal year 1996. The M&O cost estimates are based upon 
the fiscal year 1995 Multi-Year Work Plan. For comparability, the M&O 
and privatization costs are provided both in constant fiscal year 1997 
dollars, and year of expenditure dollars. DOE recognizes that these 
estimates (as well as any estimate of cost savings to be realized 
through TWRS Privatization) are subject to considerable uncertainty. 
The actual savings from TWRS Privatization will be better know as Phase 
IB gets underway and is completed.

                                                                  [Amounts in billions]                                                                 
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                     Phase I                            TWRS privatization              
                                                                --------------------------------------------------------------------------------        
                                                                                Requires   Extension   Extension                                   M&O  
                                                                 Privatization     M&O      private       M&I      Phase I    Phase     Total           
                                                                   contractor    support  contractors   support                 II                      
--------------------------------------------------------------------------------------------------------------------------------------------------------
Capital BA.....................................................        $1.45    ........  ...........  .........      $1.45     $8.5     $10.05  ( \1\ )
Expense BA.....................................................         2.5          0.9         2.6        0.5        6.5      13.0  \2\ 19.50  ( \1\ )
                                                                ----------------------------------------------------------------------------------------
      Total BA, escalated dollars..............................         3.95         0.9         2.6        0.5        7.95     21.5      29.45    $40.4
                                                                ========================================================================================
      Total BA, constant fiscal year 1997......................         3.2          0.6         1.8        0.3        5.9      15.0      20.9      26.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ The capital and expense breakout is not available for the M&O.                                                                                      
\2\ In Phase IA, all of the expenditure, $54M, is expense.                                                                                              

    Question. What are the expected savings using the privatization 
approach for TWRS? What evidence, e.g. studies or analysis, supports 
the estimates of expected savings?
    Answer. As shown previously, in the response to Questions 32 and 
33, the Department has estimated that the total life-cycle cost of the 
elements of the remediation program under a competitive, privatized 
approach would be approximately 27 percent less than the traditional 
Management and Operating (M&O) cost-plus contractor approach. The basis 
of the privatization cost estimate is the independent cost estimates of 
Phase I and Phase II performed for DOE-RL in fiscal year 1996. As noted 
in the response to the previous question, the basis for the M&O 
estimate was the fiscal year 1995 Multiyear Work Plan.
    The 27 percent cost savings estimate is for Phase I and II. A 
previous DOE estimate of 28 percent cost savings was for Phase I only. 
We recognize that these estimates are subject to considerable 
uncertainty. The actual savings from privatization will be better known 
as Phase I gets underway and is completed.
    Question. Tell the committee about the waste in the tanks. How 
homogeneous is the waste? How important is waste characterization to 
the success of processing the waste in the tanks?
    Answer. The tank waste at Hanford exhibits great variability. To 
deal with this lack of homogeneity, DOE has defined four waste 
composition ``envelopes'' for Phase I of TWRS privatization. Each of 
these envelopes specifies the compositional range of a particular type 
of tank waste to be provided by DOE to the contractor for treatment. 
Waste treatment will be initiated in 2002.
    The DOE is committed to provide waste feed within the feed envelope 
limits. To reduce DOE's risks, the feed composition limits are 
generally conservative. Over 50 percent of the Low Activity Waste (LAW) 
feed will be derived from tanks which have been characterized 
extensively having both chemical and radionuclide analyses. The 
additional waste characterization required to support Phase I will be 
completed by 2002. Process testing for retrieval and delivery 
activities are in progress. Methodologies currently being implemented 
at West Valley Nuclear Services and the Defense Waste Production 
Facility at the Savannah River Site will serve as a baseline for the 
feed validation strategy.
    Question. Do you believe that the waste in the tanks has been fully 
characterized? How many tanks are there at Hanford and how many 
characterization samples, relevant to the privatization initiative, 
have been taken from each tank?
    Answer. By the end of fiscal year 1996, DOE had sampled and 
analyzed 93 of 177 tanks. By the end of fiscal year 1997 DOE will have 
completed sampling and analysis of about 111 tanks (63 percent). In 
addition, DOE has completed tank contents estimates for all tanks based 
on fill history and chemical process records.
    Sampling and analysis of wastes from these tanks supports a wide 
range of programmatic activities which include privatization. For 
example, sampling activities support establishing that wastes are 
safely stored, interim stabilization of tanks, evaporator operations, 
and privatization. Tank samples from these tanks are used to establish 
waste dissolution and washing parameters necessary to meet the four 
waste feed ``envelopes'' discussed above.
    DOE is now obtaining characterization data to close the remaining 
safety issues (e.g., flammable gas) and on obtaining detailed chemical 
information of tank wastes to meet contractual (privatization) 
obligations.
    Question. What are DOE's plans for additional characterization of 
the waste in the tanks at the Hanford site?
    Answer. Characterization activities needed to privatize treatment 
of all Hanford tank waste will be completed by 2002.
    Question. How much of the $170 million appropriated for fiscal year 
1997 will actually be spent by the end of the fiscal year?
    Answer. The Department only obligates funds for successful 
privatization when a contractor delivers a product/service of adequate 
quality in a safe manner. Because the privatized projects will not 
likely result in a final product in fiscal year 1997, it is unlikely 
that the Government will outlay funds in fiscal year 1997. Nonetheless, 
the contractors are already beginning work, investing their own 
capital. Using traditional funding methods, the Government would have 
paid for this activity even though it did not yet result in a final 
product.
    Under privatization, the Department is required to have sufficient 
budget authority in advance to cover the privatized contractors' 
investment in facilities, equipment, interest, and return on equity 
during the construction period in the unlikely event that the 
Department would terminate the contract for its convenience. The 
privatization funding represents the Department's estimate of the 
contractors' cumulative investment and interest costs, and return on 
equity. This information was used to develop a schedule of estimated 
budget authority requirements.
    Contractors authorized to proceed with Part IB of the TWRS 
privatization contracts will be paid only for successfully completed 
waste treatment services; they will receive no ``progress payments.'' 
Thus, although the $170 million may be obligated to the contracts (if 
contractors are authorized to proceed with Part IB), none of the $170 
million will outlay by the end of the fiscal year. Unless the contract 
is terminated for convenience by the government, the $170 million and 
subsequent year funds will not be spent until waste processing takes 
place. This is scheduled to begin in June 2002.
    The $170 million is intended to provide a contingency reserve and 
to build the necessary funding reserve to pay for the service upon 
delivery. The funding level was established to provide a level amount 
over the necessary time period to pay the total costs. If the 
Department were to delay this authorization and appropriation until the 
outlay was required upon completion of the treatment, then the funding 
``spike'' would be too high--it would exceed the budget agreement 
targets, when combined with the Department's base budget needs.
    Question. How much funding is needed in fiscal year 1998 to cover 
work to be performed by the contractors? How much of the $427 million 
budget request will be spent in fiscal year 1998 for work on Phase I?
    Answer. The President's fiscal year 1998 budget requests $427 
million. In our September 3, 1996 letter to you, and Senators Murray, 
Domenici and Johnston, we indicated that these funds are needed to 
ensure that the Department has sufficient appropriation authority in 
advance to cover the privatized contractors' investment in facilities, 
equipment, interest and return on equity during the construction period 
in the event that the Department were to terminate the contract for 
convenience. Unless termination for convenience occurs, the $427 
million and subsequent funds will not outlay until waste processing 
takes place. Under the current schedule, waste processing would begin 
in June, 2002.
    Question. What will DOE do differently in the contracting and 
management of the TWRS project in light of the problems with the Pit 9 
project in Idaho?
    Answer. The TWRS privatization contract offers the government a 
number of advantages over the Pit 9 contract. The contractors are the 
primes to the Department rather than subcontractors to the M&O 
contractor. The roles of the Department, the site contractor and the 
privatization contractors are clearly defined. The TWRS contract 
clearly defines the safety, environmental, and regulatory 
responsibilities of the contractors and the Department, including 
specifying that the contractor must reimburse the Department for fines 
against the Department caused by the contractors.
    After being authorized to proceed with Part IB of the contracts, 
the contractors will receive no progress payments; the contractors will 
receive payments only for waste treatment services at a pre-agreed 
price per unit of waste treated successively. Finally, in contrast to 
Pit 9, the contractors will have a large front-end investment which the 
Department believes will provide substantial incentive to meet both the 
technical and schedule requirements.
                         technology development
    Question. A recent Congressional Research Service report indicated 
that DOE had spent about $2.0 billion to fund 1,370 different 
technology development projects and that only 50 of those had been 
deployed or used for actual cleanup. They stated that another 12 
technologies had been selected for deployment. Is this information 
accurate, and if so, how do you respond to what appears to be fairly 
poor results for the money invested in technology development?
    Answer. The data furnished in response to the Congressional 
Research Service request represented technology projects, many of which 
were components of a technology or technology system. This information 
was taken from work in progress and was the best data available at the 
date it was compiled. We have subsequently refined these data, which 
currently indicate that Environmental Management's science and 
technology program has sponsored over 700 separate technologies and 
systems since its inception, over 100 of which have been implemented or 
selected for implementation.
    Innovative or alternative technologies are being used and will 
continue to play a critical role in reducing risk, lowering the costs 
of cleanup, and accelerating the schedule for cleanup. Barriers, such 
as resistance to the use of new processes over traditional methods, 
must be overcome. We have established mechanisms that bring users, 
regulators, and other stakeholders into the decisionmaking processes in 
order to facilitate implementation of new technologies as they are 
successfully demonstrated.
    Question. How will the Technology Development program need to be 
changed in light of privatization, which, because of risk reduction, 
tends to limit the use of new, more risky technologies?
    Answer. Under a privatization setting, the technology development 
program can play a dual role: (1) to help develop market capabilities 
by providing new and improved technologies to the private sector that 
do not currently exist through technology demonstrations at DOE sites 
and reducing the business risks associated with applying innovative 
technologies; and (2) to improve DOE's capability to write and manage 
performance specification based contracts through technology 
demonstrations that establish performance data.
    Question. Is a shift of priority to longer term research warranted? 
Explain why or why not.
    Answer. We do consider that a program of longer term research 
should be part of the Environmental Management program. And, in fiscal 
year 1996, at the direction of Congress, an Environmental Management 
Science Program (EMSP) was established, in partnership with DOE's 
Office of Energy Research (OER), to target long-term basic research for 
environmental problems so that ``transformational'' or breakthrough 
approaches will lead to significantly reduced long-term environmental 
management costs and reduced risks to workers and the public. The EMSP 
bridges the gap between the broad fundamental research that has wide-
ranging applicability, such as that supported by the OER, and needs-
driven applied technology development conducted within the 
Environmental Management's technology development program. The 
Environmental Management program requires a balance between longer term 
research and technology development to support the EM cleanup mission.
    Question. The Office of Science and Technology estimates that cost 
savings from the deployment of technologies developed through the 
Technology Development program could be as high as $35 billion. What is 
the basis of this estimate and how will the greater use of 
privatization affect projected savings?
    Answer. The Office of Science and Technology's potential cost 
savings estimate of $22 to $34 billion represents a compilation of 
estimates gathered from our field offices on a sampling of innovative 
technologies. For this study, the life-cycle cost estimates of an 
emerging alternative technology were compared with that of a well 
accepted baseline technology to arrive at the potential cost savings to 
DOE. The Army Corps of Engineers reviewed our analyses of these 37 
technologies and determined that substantial cost savings in the range 
of $20 billion can be realized from use of technologies.
    The need for improved, cost-saving technologies would continue to 
exist under a privatization scenario or otherwise, and successful 
demonstrations of innovative technologies can help reduce the business 
risks associated with deploying a new technology.
    Question. Why is it necessary to have a new $50 million effort to 
deploy proven technologies?
    Answer. This initiative serves as a competitive catalyst to spur 
widespread application of innovative technologies, expediting cleanup 
and compounding cost savings. The initiative will fund the first 
application of a technology meeting a multi-site performance 
specification. These successful implementations sponsored by the 
initiative will enhance acceptance and widespread deployment of 
innovative processes by decreasing the cost of the life cycle of the EM 
program and reducing the business risks associated with using new 
technology.
    Question. Setting aside the new deployment initiative, what is 
being done by DOE, other agencies of the Federal government, the 
private sector and regulators to bring about acceptance of these proven 
technologies?
    Answer. Environmental Management's science and technology program 
has established processes and mechanisms among other agencies, the 
states, and stakeholders to facilitate acceptance of innovative 
technologies. For instance, through the Western Governors' Association, 
an Interstate Technology Regulatory Cooperation (ITRC) Work Group was 
formed consisting of the Departments of Energy and Defense, the 
Environmental Protection Agency and 26 states. This partnering 
represents a concerted effort to focus attention on removing barriers 
to the development and deployment of innovative and alternative 
environmental technologies. An ITRC success story is the Cone 
Penetrometer, which was certified because of a successful demonstration 
in California and is now accepted by the other participating states. 
This eliminates the time and costs associated with duplicative 
verification work. A similar effort is a Southern States Energy Board 
(SSEB) memorandum of understanding between 17 states and territories 
agreeing to share permitting data.
    Another process is the Rapid Commercialization Initiative (RCI) 
interagency/interstate partnership including the Departments of 
Commerce, Energy, and Defense, the Environmental Protection Agency, the 
states represented by the Western Governors' Association, Southern 
States Energy Board, and the California Environmental Protection 
Agency. RCI provides services for demonstrating and verifying 
innovative technologies by providing a collaborative and collegial team 
to work to overcome barriers. In March 1996, ten RCI projects were 
selected in response to a solicitation for proposals from private 
sector technology holders. RCI is focussing on eliminating the barriers 
to implementation and facilitating the verification and permitting 
services for these ten technologies.
                 f and h canyons at savannah river site
    Question. What are DOE plans for the F and H Canyons at the 
Savannah River Site in South Carolina?
    Answer. The current mission for the canyon facilities is to 
stabilize the nuclear materials at the Savannah River Site (SRS) as 
defined in the Department's February 28, 1995, Implementation Plan for 
Defense Nuclear Facilities Safety Board Recommendation 94-1, the 
Experimental Breeder Reactor-II slugs contained in a failed canister, 
and the Taiwan Research Reactor spent fuel. These materials require 
stabilization in order to eliminate potential environmental, safety and 
health vulnerabilities.
    The Department is currently evaluating several strategies for the 
most efficient utilization of the canyon facilities to meet these 
missions as well as other likely and potential missions. The 
recommended strategy will be documented in a plan expected to be 
submitted to the Congress in July 1997 in response to Section 3142 of 
the fiscal year 1997 Defense Authorization Act.
    Question. Has DOE studied the possibility of using the Canyons to 
expedite DOE's clean up effort?
    Answer. Yes. As part of the Department's clean up effort, canyon 
facilities are currently being utilized to stabilize nuclear materials 
and have several potential future material stabilization and 
disposition missions, as described above. The Department is currently 
evaluating various canyon utilization strategies in the process of 
developing the plan to be submitted to Congress in accordance with 
Section 3142 of the Defense Authorization Act for the Fiscal Year 1997, 
as discussed above.
    Question. The Committee understands that significant savings in 
both time and money may be possible by continued operation of both of 
the Canyons. Is this true? If it is, what are the potential savings and 
what needs to be done in fiscal year 1998 to pursue this option?
    Answer. The Department's ongoing evaluation of canyon utilization 
strategies, cited above, includes consideration of the operating 
schedules and costs associated with implementation of the various 
strategies. Annual costs for fiscal year 1998 through fiscal year 2017 
are being included in the evaluation.
                   waste isolation pilot plant (wipp)
    Question. What is the basis of EPA's recent notification that 
review of DOE's compliance certification application of the WIPP 
facility would be delayed at least 6 months?
    Answer. The Environmental Protection Agency (EPA) has requested 
additional information that EPA needs to evaluate the compliance 
certification application submitted by the Department of Energy (DOE). 
DOE is providing the information and conducting the additional analyses 
requested by EPA, including verifying the performance assessment with 
parameter values selected by EPA. DOE and EPA have worked cooperatively 
to determine a target schedule for completing these efforts. The 
current schedule has the EPA issuing its final decision on 
certification in April 1998.
    Question. How likely is it that EPA will complete certification 
activities by April 1998?
    Answer. The Environmental Protection Agency (EPA) has established 
April 30, 1998, as the date the Agency will complete all of the 
administrative and technical review processes, and issue the rule on 
the Waste Isolation Pilot Plant's (WIPP) compliance with 40 CFR 191 and 
194. The Department of Energy (DOE) is working with EPA on a daily 
basis to ensure that all information requested by EPA is provided to 
the Agency in a timely manner to facilitate meeting its schedule. DOE 
is confident that the Department will provide EPA with the requested 
information on schedule so as to allow EPA to meet the April 1998 date. 
EPA and DOE will continue to seek schedule efficiencies wherever 
possible.
    Question. What are the potential impacts if EPA does meet the April 
1998 date?
    Answer. Delaying the Waste Isolation Pilot Plant (WIPP) 
certification decision from October 1997 to April 1998 results in a 
six-month slip in the WIPP opening from November 1997 to May 1998. The 
revised schedule does not impact the Department's ability to meet the 
schedules specified in the existing Idaho Settlement Agreement and the 
Rocky Flats Cleanup Agreement. The Department is confident that the May 
1998 date for beginning disposal operations at WIPP is achievable. 
However, there may be unforeseen problems, such as litigation, that 
might need to be resolved before DOE can begin disposal operations at 
WIPP. If there is significant additional delay, DOE could be determined 
to have violated the Federal Facility Compliance Act of 1992, the Idaho 
Settlement Agreement and the Rocky Flats Cleanup Agreement, and be 
subject to fines, penalties, and unilateral orders imposed by the 
States.
    Question. What is the first waste shipment deadline and what impact 
does this delay have on that deadline?
    Answer. The first transuranic (TRU) waste shipment for disposal at 
the Waste Isolation Pilot Plant (WIPP) will come from the Idaho 
National Engineering and Environmental Laboratory (INEEL); it will be 
closely followed by shipments from the Rocky Flats Environmental 
Technology Site (RFETS) and the Los Alamos National Laboratory. Only 
INEEL and RFETS have shipment deadlines which could be impacted by a 
significant delay in opening WIPP. Under the Idaho Settlement 
Agreement, the Department of Energy (DOE) is committed to ship waste 
from Idaho no later than April 1999 and to have 3,100 cubic meters of 
TRU waste shipped by December 31, 2002. Under the Rocky Flats Cleanup 
Agreement, DOE is committed to ship 930 drums (186 cubic meters) of TRU 
waste out of Colorado by September 30, 1998, and to ship an additional 
670 cubic meters by September 30, 1999. DOE will meet these commitments 
with a May 1998 WIPP start date.
    Question. Can DOE proceed without the compliance certification?
    Answer. The Department of Energy (DOE) cannot proceed without the 
Environmental Protection Agency's (EPA) certification, a State RCRA 
permit, or a final environmental impact statement. The Waste Isolation 
Pilot Plant (WIPP) Land Withdrawal Act (Public Law 102-579), as 
amended, requires EPA to certify DOE's compliance with the radioactive 
waste disposal standards prior to any transuranic waste disposal at 
WIPP.
    Question. What alternatives are available to DOE if EPA is unable 
the complete the review in time to assure WIPP can receive initial 
shipments in 1998 as currently planned?
    Answer. Should the Environmental Protection Agency (EPA) not 
complete it's review of the Department of Energy's (DOE) Compliance 
Certification Application in time for DOE to declare the Waste 
Isolation Pilot Plant (WIPP) ready for waste disposal during fiscal 
year 1998, or decide that WIPP cannot be certified, some DOE sites 
having transuranic (TRU) waste would be out of compliance with the 
Federal Facility Compliance Act of 1992 (FFCAct) and other agreements 
such as the Idaho Settlement Agreement and the Rocky Flats Cleanup 
Agreement. One possible alternative is to renegotiate the existing 
compliance agreements at the sites that would be impacted. It should be 
noted that, therefore, the Department will be required to obtain the 
approval of its regulators before modifying any terms of its compliance 
agreements. Under the guidelines of the FFCAct, states are allowed to 
impose unilateral orders.
                                 ______
                                 

                 Questions Submitted by Senator Gorton

                        fast flux test facility
    Question. Can you assure the Subcommittee that any funds used to 
evaluate Hanford's FFTF as a possible option for production of tritium 
and medical isotopes will not take money from Hanford's cleanup 
program?
    Answer. Funds used to evaluate FFTF as a possible option for 
tritium production will not take money away from Hanford's cleanup 
program.
    In January 1997, former Secretary O'Leary announced the decision to 
maintain the Fast Flux Test Facility (FFTF) in standby while any future 
role it may play in the Department's tritium production strategy is 
evaluated. The Department plans to make a final determination on the 
future of the facility by December 1998. Meanwhile, the Department will 
maintain FFTF in a standby state.
    Given that tritium production is not Environmental Management (EM) 
mission-related, it was decided that the Office of Nuclear Energy (NE) 
should manage the FFTF program and funding. The funding for FFTF is 
divided between deactivation and surveillance/maintenance activities. 
To ensure that funding for cleanup activities such as deactivation 
remains under the control of the EM program, only the funding for FFTF 
surveillance and maintenance will be transferred to NE. Despite the 
continued standby status of FFTF, there are deactivation activities 
that need to be done in fiscal year 1997 and fiscal year 1998, 
independent of the plant's standby status. Funding that was intended 
for those FFTF deactivation activities that will not be performed 
because of the standby decision will be used at the other non-defense 
cleanup activities.
    A reprogramming request was submitted to Congress to reprogram 
$31.1 million of fiscal year 1997 funds for FFTF surveillance and 
maintenance from EM to NE. To fund the required studies needed to 
support a decision on FFTF for tritium production, the Office of 
Nuclear Energy plans to reprogram $1 million in fiscal year 1997 from 
the NE Advanced Radioisotope Power System program to the Termination 
Costs program budget line.
                      performance-based contracts
    Question. Please explain how the shift to the performance-based 
contracts at cleanup sites such as Hanford has already reduced costs 
and accelerated cleanup. Can DOE document specific cost savings 
resulting from accelerating cleanup?
    Answer. Shifting to performance-based contracts at Hanford, as well 
as other sites, has resulted in more specific Statements of Work which 
define, from the outset, the performance expectations of the 
Department's contractors. Under performance-based contracts, the focus 
is on desired outcomes and results and the contractor's success is 
measured against specific performance criteria rather than the vague, 
subjective evaluations of contractor performance relied on in the past. 
Under performance-based contracts, the contractor is provided monetary 
incentives to accelerate project schedules, reduce baseline costs, and 
deliver high quality products.
    Many of the results of implementation of contract reform at the 
Department are not quantifiable. For example, the transfer of risk from 
the Department to the contractor cannot be specifically measured. 
However, in many cases we have already realized significant cost 
savings or expect to in the future under projects funded within the 
performance-based contracts. For example:
  --At Hanford, accelerated the Spent Nuclear Fuel Stabilization 
        Project for a total project cost reduction of $300 million.
  --Completed construction of the Hanford Environmental Restoration 
        Disposal Facility (ERDF) three months ahead of schedule and 
        approximately $20 million below the original estimated cost.
  --At Hanford, the Plutonium Uranium Extraction facility (PUREX) was 
        costing $35 million a year to maintain in a safe condition. The 
        facility is being completely deactivated to reduce the annual 
        surveillance and maintenance cost to approximately $1 million.
  --At Hanford, the early transition of Building 308 from an 
        operational mode to a surveillance and maintenance mode 
        resulted in a decrease in annual surveillance and maintenance 
        costs from approximately $1.1 million to less than $200,000.
  --At Hanford, complete an accelerated stabilization of the B-Plant 
        Canyon Facility to a low surveillance and maintenance state 
        with a cost savings of $100 million over the fiscal year 1995 
        baseline.
  --At the Savannah River Site, a performance incentive for 
        acceleration of canister production at the Defense Waste 
        Processing Facility is expected to significantly lower outyear 
        costs by decreasing the number of years of operation (currently 
        $450 million per year).
    It should be noted that the Department has experienced some 
implementation problems with its performance-based management 
contracts. In March 1997, the Secretary directed a complete review of 
performance-based contracts throughout the Department. The results of 
this review are expected in August.
               contract reform and management improvement
    Question. The Department has made great strides promoting 
contractor reform. The latest example is the Hanford Management and 
Integration contract which is 100 percent at risk. The new Hanford 
contracting team gets paid only if it meets an established set of 
cleanup, health, and safety, and economic development milestones. 
Consistent with contractor reform, what has the DOE done to change its 
own management of the cleanup mission?
    Answer. In recognition of the need to improve its management 
practices in the face of declining budgets, the Office of Environmental 
Management has engaged in a serious review of its management practices 
to determine the most cost efficient and effective means of 
accomplishing its cleanup mission.
    Figuring prominently in management changes to meet the challenges 
of an accelerated cleanup schedule is the shift of the majority of 
management responsibility and accountability to the field where the 
work is performed.
    Field Project Officers will be assigned to each project, except 
those few where Headquarters must retain the lead. Responsibilities of 
Headquarters Program Managers will be shifted from detailed project 
management to a greater emphasis on planning, policy coordination and 
analysis of cross-cutting issues.
    To support these management changes, the Office of Environmental 
Management is developing an Integrated Planning, Accountability and 
Budgeting System designed to eliminate redundancy and reduce the number 
of independent systems. Environmental Management activities will be 
``projectized'' to clearly define connections between the planning, 
budgeting, and management performance-based contracts, elements of the 
Environmental Management structure. Projects will be tracked from 
planning through budgeting and execution through the integrated system.
    A systems engineering approach will be applied to optimize projects 
across the Department and establish the most effective methods for 
achieving desired and state objectives. Other management initiatives 
will be outlined in the Environment Management Draft 2006 Plan.
        stable funding for the environmental management program
    Question. Is it the Administration's intention to request stable 
funding for the defense Environmental Management program for the next 
several years to ensure that the federal facility compliance agreements 
such as the Tri-Party Agreement are met?
    Answer. The Department of Energy will request sufficient funding 
for the Environmental Management program to comply with our legal 
obligations, reduce the mortgage cost of EM facilities, and addresses 
all urgent risks while still focussing on both risk and efficiencies. 
The funding level for the EM program will be consistent with the 
programmatic and budgetary priorities of the Department and 
Administration.
                             privatization
    Question. I have been a longstanding advocate of privatizing DOE's 
cleanup program. However, with the budget restraints we face, some 
reduction in DOE's privatization funding may be needed, but I am 
concerned about cutting the program too much so that we undermine the 
privatization concept.
    Of the $1 billion DOE fiscal year 1998 request for privatization, 
what is the minimum adequate amount needed to ensure the program goes 
forward and we meet our stakeholder obligations?
    Answer. The Department believes that the President's budget request 
is the appropriate level to fund privatization in fiscal year 1998 and 
to provide assurance to the private sector of the Department's 
commitment to privatization. We are willing to work with you to 
identify the impacts on any funding reductions below this level.
                    tank waste privatization project
    Question. Specifically for Hanford's tank waste privatization 
project, what is the minimum adequate amount necessary?
    Answer. The President's fiscal year 1998 budget requests $427 
million. In our September 3, 1996 letter to you, and Senators Murray, 
Domenici and Johnston, we indicated that these funds are needed to 
ensure that the Department has sufficient appropriation authority in 
advance to cover the privatized contractors' investment in facilities, 
equipment, interest and return on equity during the construction period 
in the event that the Department were to terminate the contract for 
convenience. Unless termination for convenience occurs, the $427 
million and subsequent year funds will not be spent until waste 
processing takes place. Under the current schedule, waste processing 
would begin in June, 2002.
    As discussed in the September 3, 1996 letter, the $427 million 
figure is a DOE estimate made prior to contract award, and is based on 
a number of assumptions including an effort to provide level funding to 
avoid large spikes in funding in the outyears. The actual amount 
required in fiscal year 1998 will be established when the Department 
makes the next procurement decision in May of 1998. At that point the 
contractor(s) will have established their expenditure schedules which 
will be the basis for establishing the minimum Budget Authority (BA) 
schedules for the TWRS privatization contract(s).
                    fiscal year 1998 budget request
    Question. Many external bodies, including the National Academy of 
Sciences, have criticized the Department for its lack of investment in 
a long term science strategy for developing technologies for 
environmental cleanup. What do you believe is the proper balance in a 
$6 billion program for long term research and development activities 
that is focused on developing scientifically credible answers to 
problems for which you do not yet have a cost effective solution?
    Answer. We believe that a stable funding level of approximately $50 
million a year is necessary for the Environmental Management Science 
Program (EMSP) to be successful. The program is not designed to fund 
all the scientific research necessary for a successful Environmental 
Management Program. It is designed to: ``bridge the gap'' between 
existing broad fundamental research that has wide-ranging 
applicability, such as that performed in DOE's Office of Energy 
Research and the U.S. Environmental Protection Agency, and needs driven 
applied technology development, conducted in EM's Office of Science and 
Technology, and focus the nation's science infrastructure on critical 
DOE environmental management problems.
    The National Academy of Sciences in its 1996 report titled 
``Building an effective EM Science Program'', provided this view of the 
funding: ``The committee notes that DOE's first-year investment in the 
EMSP is modest compared to many private-sector R&D efforts--the budget 
department's investment ($50 million) represents about 0.8 percent of 
EM's annual budget, and the total EM investment in R&D (in fiscal year 
1996) represents about 6.6 percent of its budget. By comparison, 
``high-technology'' manufacturing firms (e.g., computing, electronic, 
communication, instrumentation, and pharmaceutical firms) spend between 
about 7 and 12 percent of net sales on R&D.''
                  partnerships with local governments
    Question. What are your plans for working closely with local 
governments to build a mutually beneficial partnership to confront the 
challenges of cleanup and downsizing associated with the Department's 
larger defense nuclear facilities?
    Answer. We recognize that local governments play a critical role in 
helping the Department confront its challenges at its sites. A number 
of DOE Headquarters and field managers met with local government 
officials last month to discuss how to build more effective 
partnerships. The meeting provided an opportunity for affected local 
governments and DOE managers to further establish how local governments 
can more effectively be involved in site decisions and actions. As a 
follow-up to that meeting, the Assistant Secretary for Environmental 
Management will participate in conference calls and meetings with 
affected local governments to ensure their participation in the Ten-
Year planning process and other critical initiatives.
    Second, the Office of Environmental Management is funding the 
International City/County Management Association and the Energy 
Communities Alliance to assist in arranging ``peer exchanges'' among 
local governments. These meetings will help affected local governments, 
that are located near major DOE facilities, to meet with local 
government managers that have already confronted similar concerns such 
as base closure, long-term institutional controls, facility reuse, and 
other issues of local interest.
    Third, DOE is involving local governments in a number of different 
advisory boards that focus on cleanup, worker and community transition, 
and other concerns. In particular, local government officials are key 
members of the 12 Site Specific Advisory Boards we have established at 
all our large DOE sites. These boards were established to provide 
direct access to DOE decision makers and ensure local government 
concerns are taken into account in all DOE's major decisions. 
Furthermore, DOE provides direct assistance to locally-driven community 
reuse organizations and surrounding counties affected by DOE 
downsizing.
    Finally, local government officials are also involved in shaping 
the direction and implementation of the National Dialogue on Nuclear 
Waste and Materials. This Dialogue is designed to provide a 
comprehensive overview of the major decisions DOE will need to make in 
the next several years to local government officials and other 
stakeholders. We envision special forums tailored to meet the specific 
needs of local governments.
                                 ______
                                 

                 Questions Submitted by Senator Bennett

            formerly utilized sites remedial action program
    Question. As you know, a great deal of concern has been expressed 
regarding the effectiveness of the FUSRAP program and the perceived 
delays in administering the program. What steps is DOE taking to 
accelerate and complete the cleanup of the contaminated sites located 
in urban and residential areas?
    Answer. The Formerly Utilized Sites Remedial Action Program 
(FUSRAP) has been making considerable progress and as of the end of 
fiscal year 1996, cleanup has been completed at 23 of the 46 sites 
currently included in the program. The FUSRAP program continues to 
demonstrate its effectiveness, in terms of completing the cleanup of 
designated contaminated sites and vicinity properties located in urban 
and residential areas. The two sites completed in fiscal year 1996, 
brought the percentage of sites completed to 50 percent. This number 
will increase as the program continues to focus on cleanup. Two 
additional sites are planned for completion in fiscal year 1997 and one 
in fiscal year 1998.
    Support costs for FUSRAP have been dramatically reduced, thereby 
increasing the percentage of funds available for cleanup rather than 
studies. The Department's prime contractor for FUSRAP (Bechtel 
National, Inc.) has reduced staffing while increasing the percentage of 
work being performed using fixed-price subcontracts. Bechtel's contract 
with the Department expires in June, 1998. The Department is preparing 
to solicit bids for a performance based contract, with incentives, to 
be awarded in the spring of 1998. Innovative approaches are currently 
used, such as the total-service, fixed-price contract at the Wayne 
site, to accelerate cleanup, reduce costs and shift financial risk from 
the Department to the private sector. The fiscal year 1998 
Congressional budget request, with an increase of over $100 million, 
will accelerate cleanup of urban waste sites, consistent with the 
Administration's initiative.
    The greatest challenge ahead is balancing the desires of our local 
stakeholders with the technical and financial constraints of a national 
cleanup program. While we are actively trying to reach resolution on 
the appropriate path forward, the Department has aggressively continued 
to make ``on the ground'' progress. We continue to foster a 
collaborative decision making process with our stakeholders and 
citizens groups to reach agreement on efficient and effective cleanup 
strategies.
    Question. Please explain the Department's commitment to clean up 
FUSRAP sites so these properties can be returned to the local 
communities for productive use.
    Answer. The Department is committed to clean up FUSRAP sites in a 
manner that maximizes the number of properties which can be released 
for beneficial use. For the majority of FUSRAP sites and vicinity 
properties, which are privately owned, cleanup is consistent with the 
current or anticipated future land use. Cleanup options for the 
remaining seven properties owned or leased by the Department will 
continue to consider stakeholder preferences for productive future use 
of these areas as part of the decision making process. This is 
consistent with the administrative changes to Superfund to consider 
reasonably anticipated future land use in selecting remedies.
    Question. Please provide an analysis of the estimated savings in 
fixed overhead, maintenance, and life cycle costs, should cleanup of 
FUSRAP sites be accelerated by at least 20 percent.
    Answer. For this reason, the Department is requesting an additional 
$107 million in fiscal year 1998 through fiscal year 2002 to help 
achieve completion of the program by 2002 (approximately 14 years 
sooner than originally projected) and greatly reduce the total cost of 
the program. If the Department were to reduce the projected length of 
the program by 20 percent (approximately three and a half years), we 
estimate that the total potential savings would be in the range of $50 
to $70 million (i.e., $15 to $20 million for each year that the program 
is accelerated).
    Question. Does DOE support the proposal currently submitted by 
Envirocare to amend it's FUSRAP contract in an effort to finish the 
clean up of the contaminated waste piles located in Wayne, New Jersey 
this year by engaging in three months of sustained work?
    Answer. In general, the Department supports any proposed concept 
which will accelerate FUSRAP cleanup activities without incurring 
additional risk or cost. The Department is obligated, however, to 
assure that the proposal can be legally implemented under existing 
Federal contracting regulations and that the proposal is in the best 
interest of both the government and the local community. The Department 
plans to make a determination on the acceptability of the proposal in 
the next few months.
            natural resource damages budgetary implications
    Question. Mr. Secretary, I am concerned with the budgetary 
implications of the Department of Energy's environmental liabilities. I 
raise some questions today that cut across committee jurisdiction, but 
I believe these issues need to be addressed. As you know, the federal 
government's responsibility for the costs of cleaning up environmental 
contamination has received much attention recently here on Capitol Hill 
and in the press. The General Accounting Office has estimated the 
Department's cleanup liability to be as great as $350 billion. (U.S. 
General Accounting Office, Consistent Relative Risk Evaluations Needed 
for Prioritizing Cleanups, GAO/RCED-96-150, June 1996). The Department 
of Energy's responsibility for natural resource damages under CERCLA, 
however, is also a matter of great concern to me.
    The Department recently released a report to Congress, as required 
by Section 3154 of the National Defense Authorization Act for Fiscal 
Year 1997 estimating its natural resource damages. (U.S. Department of 
Energy, Estimate of Potential Natural Resource Damage Liabilities at 
U.S. Department of Energy Sites, February 1997). The Department stated 
that it did not conduct its estimate in accordance with the natural 
resource damage assessment regulations promulgated by the Department of 
the Interior (DOI) (43 C.F.R. part 11), as directed by Section 3154. 
(Estimate of Potential Natural Resource Damage Liabilities at U.S. 
Department of Energy Sites, page 2).
    Although CERCLA does not require natural resources damage 
assessments to be conducted in accordance with the DOI regulations, 
assessments that are conducted in accordance with the regulations carry 
a rebuttable presumption of validity in administrative or judicial 
proceedings. 42 U.S.C., Sec. 9607(f). Therefore, assessments for 
natural resource damages claims filed against the Department by state 
and tribal trustees will most likely be conducted in accordance with 
these regulations. The DOI regulations have been defended and supported 
by the administration in litigation and throughout the CERCLA reform 
legislative debate.
    Based on private party experience, if the Department conducted this 
study in accordance with the DOI regulations, which are applied by 
trustees in actions against private parties, including the assessment 
of damages for past use and non-use values using contingent valuation 
and damages for off-site contamination, it is certain that the 
Department's estimate would be much higher and could, in fact, be 
hundreds of billions of dollars.
    Do you believe the Department of Energy should receive 
differential, and in fact preferential treatment, as opposed to private 
parties in the natural resource damage assessment and claim process?
    Answer. No, I do not believe that the Department of Energy should 
receive preferential treatment, as opposed to private parties, in the 
natural resource damage assessment and claim process.
    The Department did not use the Department of the Interior (DOI) 
regulations in preparing its report because the regulations contemplate 
a lengthy, detailed assessment process that would not be appropriate at 
most DOE sites. As noted in the report, the Department could conduct 
detailed ecological surveys at each DOE facility and attempt to 
estimate potential natural resource damage liabilities in accordance 
with the DOI regulations. The time and cost required for such an effort 
would be large, the results would still be uncertain, and collecting 
these data in this form could invite claims that otherwise might not be 
asserted. Furthermore, a premature estimate of this type 
unintentionally may generate unrealistic expectations concerning 
potential liability that may be mitigated in light of DOE's efforts to 
minimize its potential natural resource damage liability. Perhaps most 
importantly, until the final remedy for a site is selected, the 
Department cannot effectively appraise the natural resource injuries 
that are likely to remain once the response action is completed. In 
fact, it would be difficult for the Department to complete the 
preassessment screening process under the DOI regulations (a condition 
precedent to assessment) until remedy selection has occurred because it 
is impossible to determine whether the remedy will fully address all 
potential injuries. The Department believes that scarce resources are 
better focused on addressing natural resource injuries as part of the 
response action process rather than conducting costly, premature 
assessments under the DOI regulations that would divert funds from 
response actions that may remedy potential injuries.
    The Department does not agree with the assertion in the question 
that, had the Department based its estimate on the DOI regulations, 
``it is certain that the Department's estimate would be extremely high 
and could, in fact, be hundreds of billions of dollars.'' As noted in 
the Department's report, any estimate of DOE's potential natural 
resource damage liability at this stage is necessarily uncertain and of 
limited value for current planning purposes. The natural resource 
damages claims that DOE ultimately pays could be either considerably 
higher or lower than the estimates presented in its report because of 
the inherent uncertainties.
       scope and methodology of natural resource damages estimate
    Question. The report submitted to Congress by the Department, as 
required by Section 3154 of the National Defense Authorization Act for 
Fiscal Year 1997, excludes nine sites from its estimate that are not 
covered by the Baseline Environmental Management Report (BEMR). (See 
Estimate of Potential Natural Resource Damage Liabilities at U.S. 
Department of Energy Sites, pp. 12-13). These sites however, are some 
of DOE's most contaminated.
    Further, the Department's report estimates natural resource damages 
based on a ratio of response costs and natural resource damages derived 
from a Department of Justice (DOJ) Compendium of natural resources 
damages claims against private parties. (Compendium of Natural Resource 
Damages Cases under CERCLA, U.S. Department of Justice, September 
1995). The Department's report notes that the DOJ Compendium excludes 
several sites where large natural resource damages claims are currently 
pending in the courts. (See Estimate of Potential Natural Resources 
Damages Liabilities at U.S. Department of Energy Sites, p.13).
    Recent trends in natural resource damages litigation indicate that 
trustees are unwilling to settle for relatively small amounts and 
instead are proceeding with claims at larger sites with historical 
contamination. Consequently these claims, including the pending claims 
that are excluded from the DOJ compendium, are up to $1 billion.
    Given the recent litigation trends cited above, what is the proper 
ratio of clean up costs to natural resource damages if the sites 
excluded from the BEMR and from the DOJ Compendium are considered in 
the Department's estimate? Using the ratio, please provide us with your 
best estimate of the contingent valuation of natural resource damages 
at those sites that are excluded from the Department's recent report.
    Answer. For a variety of reasons including those referred to in the 
question, the Department believes that any estimate of the Department's 
natural resource damage liability necessarily is uncertain. The large 
claims currently being litigated are not included in the Department of 
Justice Compendium because this Compendium includes only completed 
cases for which judgments or settlements include natural resource 
damage recoveries or covenants not to sue for natural resource damages. 
The Department did not include in the BEMR the response action cost 
estimates for certain areas that have become contaminated with 
hazardous substances and may not be cleaned up because: (1) no feasible 
remediation approach is available; (2) the risks posed by the 
contamination do not warrant response actions using existing 
technologies given the ecological injury that these technologies would 
cause; or (3) the contaminants will attenuate naturally over time. 
Therefore, response action costs for these areas could not be included 
in the Department's estimates of response action costs at its 
facilities to which the ratios between natural resource damage 
recoveries and response action costs at private sector sites were 
applied. However, these areas were not excluded from the Department's 
report on natural resource damages. The report in fact acknowledged 
that these areas may give rise to potential natural resource damage 
liabilities.
    The Department continues to believe that a methodology based on 
private site experiences is a credible approach in the absence of 
natural resource damage claim experience at DOE sites. The Department 
and the General Accounting Office both used identical ratios (5.95 
percent and 9.41 percent) derived from the Department of Justice 
Compendium. For the reasons discussed in the report, the Department 
continues to believe that the estimate contained in the report of $1.4 
billion to $2.5 billion is a more reasonable estimate of its potential 
natural resource damage liability than that of the General Accounting 
Office ($2.3 billion to $20.5 billion).
    The Department will continue to monitor the natural resource damage 
potential at its sites and will monitor private settlements. If it 
appears that the Department's natural resource damage liability will 
change significantly from current estimates, the Department will 
promptly inform the appropriate committees of Congress and will change 
the estimate of natural resource damage liability included in the 
footnote to DOE's consolidated financial statements.
    Question. The recent natural resource damages estimate submitted by 
the Department to Congress, as required by Section 3154 of the National 
Defense Authorization Act for Fiscal Year 1997, acknowledges that 
contamination at some sites, such as Oak Ridge, extends beyond the 
Department's boundaries. (Estimate of Potential Natural Resources 
Damage Liabilities at U.S. Department of Energy Sites, p. 14). Oak 
Ridge is one of the sites excluded from DOE's Baseline Environmental 
Management Report (BEMR) and from this recent natural resource damages 
estimate.
    For sites where such off-sites contamination exists, can you 
identify the non-federal trustees for the potentially affected 
resources? Please provide your best estimate of the contingent 
valuation of natural resource damages at sites where off-site 
contamination exists.
    Answer. The 1996 Baseline Environmental Management Report covers 
all sites that are part of the Environmental Management program, 
including all elements of the Oak Ridge Reservation and sites managed 
by the Oak Ridge Operations Office. Hence, it is factually incorrect to 
assert that any sites were ``excluded.'' It is correct that costs were 
not included for remediation of certain sites for which no feasible 
remedial technology exists. Estimated cleanup costs are included in the 
Baseline report for all problems for which a feasible remedial action 
technology could be identified. Estimated cleanup costs could not be 
determined for more than seven sites for which no feasible remedial 
technology could be identified. Moreover, as the Baseline report 
indicates explicitly on page 3-10: ``[T]he Base Case does not include 
cost estimates for potential liabilities due to natural resources 
damages claims. There is the potential that claims for natural 
resources damages could be filed against the Department of Energy after 
selection of the remedial action at some of the Department's sites. If 
any such claims result in payment of a damage claim, this liability 
would be additive to the costs estimated in the report.''
    If off-site contamination exists near a DOE site, the non-federal 
trustees for the potentially affected resources usually would be the 
State and possibly one or more Tribes. The Department has not 
separately estimated the contingent valuation of natural resource 
damages at sites where off-site contamination exists. However, the 
Department of Energy's estimates include non-use values based on 
contingent valuation to the extent such values are accounted for in the 
cases included in the Department of Justice Compendium of private 
sector NRD cases (which served as the basis for extrapolating and 
estimating dollar amounts for potential claims against DOE). The 
estimates for cleanup of contamination beyond the boundaries of DOE 
sites that are included in the BEMR are included in the response cost 
estimates utilized in the report to estimate the Department's potential 
natural resource damages.
    As stated in its recent report, any estimate of the Department's 
potential natural resource damage liability at this stage is 
necessarily uncertain and of limited value for current planning 
purposes. The Department has concluded that the best way to reduce the 
potential for natural resource damage claims from releases at its 
facilities is to: incorporate resource values in land use planning; 
work closely with the trustees to identify concerns; work closely with 
stakeholders, trustees, and regulators in integrating remedy and 
restoration; and mitigate resource injury in implementing response 
actions.
                    natural resource damages reform
    Question. Mr. Secretary, the recent DOE report estimating its 
natural resource damages notes that scarce resources should not be 
diverted from response actions to pay for costly natural resource 
damage assessments. (Estimate of Potential Natural Resources Damage 
Liabilities at U.S. Department of Energy Sites, p. 6). I agree that 
CERCLA's natural resource damages provision impedes the prompt and 
effective cleanup of sites to protect human health and the environment. 
CERCLA, as amended in 1986, bars the filing of claims for natural 
resource damages at federal facilities and sites on the National 
Priorities List until a cleanup remedy is selected. 42 U.S.C. 
Sec. 9613(g).
    It is important to note, however, that some assessment of the 
damage to natural resources is required for a response action that 
addresses injuries to those resources. Moreover, CERCLA directs the 
trustee, not the responsible party, to prepare a natural resource 
damage assessment and to file claims. 42 U.S.C. Sec. 9607(f).
    Please explain what CERCLA reforms natural resource damages 
provision do you support that would preclude claims for restoration 
costs beyond cleanup.
    Answer. The Department supports the legislative proposal on natural 
resource damages, drafted by the Administration, and sent to the House 
and Senate in October, 1996. This legislative proposal would clarify 
that natural resource damage claims would be focused on restoration 
costs rather than monetized values and would enhance coordination and 
integration of remedy and restoration decision making. Such 
coordination and integration of remedy and restoration decision making 
should minimize the potential for claims for restoration costs after 
completion of the response action.
                  natural resources damages budgeting
    Question. In response to questions submitted at the Armed Services 
Committee hearing held on January 30, you stated that natural resource 
damages will be budgeted for as a component of cleanup costs to the 
extent that natural resource concerns are addressed during the cleanup 
process. Further the study recently released by the Department 
estimating its natural resource damages asserts that the Department has 
an obligation to address natural resource injuries in its response 
action. (Estimate of Potential Natural Resources Damage Liabilities at 
U.S. Department of Energy Sites, p. 3).
    Private party experience indicates that natural resource damages 
claims, which are brought by trustees and include damages for lost use 
and non-use values and off-site contamination and are calculated using 
contingent valuation, are often greater than cleanup costs and are 
imposed regardless of the effectiveness of remediation to protect human 
health and the environment.
    How does the Department intend to budget for claims that are 
successfully brought by state and tribal trustees for injuries to 
natural resources that are not addressed during the cleanup process? 
Will the money to satisfy these claims come from the Department's 
operating budget or from the Federal Judgment Fund? If the money comes 
from the Federal Judgment Fund, how does the Department intend to 
budget for reimbursement to that Fund? How does the Department intend 
to budget for claims for injuries to natural resources brought by 
federal contractors?
    Answer. In accordance with the October 1993 opinion by the 
Comptroller General any successful claims against the Department as a 
result of litigation for natural resource damages after completion of 
the cleanup process likely would be paid out of the Judgment Fund 
rather than the Department's operating budget and would not be 
separately budgeted for by the Department. Any funds to reimburse the 
Fund would have to be separately authorized and appropriated by 
Congress.
    Federal contractors are not natural resource trustees and, 
therefore, are precluded from bringing claims for injuries to natural 
resources claims.
                                 ______
                                 

                  Questions Submitted by Senator Byrd

                    federal energy technology center
    Question. The Federal Energy Technology Center, and especially its 
Morgantown office, has been working closely with the environmental 
management program, and particularly the Office of Science and 
Technology. What is the current estimate of fiscal year 1997 funding 
level provided from the EM program to the FETC?
    Answer. The following is the estimated funding level for the 
Federal Energy Technology Center (FETC) for Environmental Management 
(EM) activities in fiscal year 1997.

          Environmental Management Activities Performed by FETC

                         [Dollars in thousands]

Program funding:                                        Fiscal year 1997
    Decontamination and decommissioning.......................    $5,043
    Private Industry Program..................................   $39,778
    University Program........................................   $13,573
    Other directed activities.................................   $42,295
                    --------------------------------------------------------------
                    ____________________________________________________

      Total program funding...................................  $100,689
                    ==============================================================
                    ____________________________________________________
Program direction funding:
    Salary and benefits.......................................    $3,265
    Travel....................................................      $214
    Support services..........................................    $1,048
    Contractual services......................................       $82
                    --------------------------------------------------------------
                    ____________________________________________________

      Total program direction.................................    $4,609
                    ==============================================================
                    ____________________________________________________
      Total FETC EM activity..................................  $105,298
                    ==============================================================
                    ____________________________________________________
Full-time equivalents (FTE's).................................        48

    An additional 16 FTE's will transfer to FETC in fiscal year 1997 to 
support the Center for Acquisition and Business Excellence. Funding for 
salaries and personnel related expenses will transfer from Headquarters 
to FETC in the monthly financial plan based on the actual costs of the 
employees transferred and the effective date of each transfer.
    Question. What is your estimate of projected program activities in 
fiscal year 1998.
    Answer. The following is the funding level projected for the FETC 
for EM activities in fiscal year 1998.

       Environmental Management Activities to be Performed by FETC

                         [Dollars in thousands]

Program funding:                                        Fiscal year 1998
    Decontamination and decommissioning.......................    $9,600
    Private Industry Program..................................   $40,066
    University Program........................................   $19,000
5Other directed activities
                                                                  $8,375
                    --------------------------------------------------------------
                    ____________________________________________________

      Total program funding...................................   $77,041
                    ==============================================================
                    ____________________________________________________
Program direction funding:
    Salary and benefits.......................................    $3,980
    Travel....................................................      $214
    Support services..........................................    $1,048
    Contractual services......................................       $86
                    --------------------------------------------------------------
                    ____________________________________________________

      Total program direction.................................    $5,328
                    ==============================================================
                    ____________________________________________________
      Total FETC EM activity..................................   $82,369
                    ==============================================================
                    ____________________________________________________
Full-Time Equivalents (FTE's).................................        48

    Fiscal year 1998 funding for FETC does not reflect the additional 
16 FTE's that will transfer to FETC in fiscal year 1997 to support the 
Center for Acquisition and Business Excellence. Funding for salaries 
and personnel related expenses will be transferred from Headquarters in 
the initial fiscal year 1998 Financial plan to cover personnel related 
costs for the 16 FTE's.
                             ten-year plan
    Question. What impact do you anticipate the shift to a 10 year 
clean-up program for DOE's nuclear waste problems will have on the role 
of FETC in helping develop solutions?
    Answer. The successful completion of the 2006 Plan (formerly called 
the Ten-Year Plan) vision requires the identification and deployment of 
innovative technologies. The Science and Technology Program is focused 
on developing, demonstrating, and implementing those new technologies 
for use in environmental management. Identifying and deploying 
innovative technologies and processes for cleanup throughout the 
complex will be key to the Department's ability to reducing the EM 
mortgage and accelerating site cleanup, thereby reducing the risk to 
workers, the public, and the environment. It is anticipated that the 
Federal Energy Technology Center, which includes the Morgantown office, 
will continue to play an important role in helping to develop solutions 
for cleanup challenges throughout the Department.
                    federal energy technology center
    Question. What are the focus areas that FETC has been selected to 
lead within the EM program?
    Answer. In fiscal year 1997, the Federal Energy Technology Center 
(FETC) has lead responsibility for the following environmental 
management program activities:
  --Decontamination & Decommissioning Focus Area. FETC manages this 
        national program to develop technologies to decontaminate, 
        decommission, deconstruct, and dispose of the 7,000 
        radiologically contaminated buildings and equipment in the DOE 
        complex.
  --Private Industry Program. Under this program, FETC contracts with 
        private sector organizations to develop cleanup technologies 
        for use within the DOE complex.
  --University Program. FETC manages a program of applied R&D which 
        supports technology development efforts through university 
        grants and cooperative agreements.
  --Environmental Management (EM) Center for Acquisition and Business 
        Excellence (CABE). FETC was recently designated as the CABE as 
        part of the EM redeployment initiative. The CABE will support 
        the establishment of consistent acquisition strategies across 
        the EM organization, consistent processes in business 
        management, and the field offices in acquiring services 
        required to carry out the EM mission.
  --EM Inter-Governmental and Public Partnership Service Center 
        (IGPPSC). It is anticipated that the FETC will be designated as 
        the IGPPSC by the end of May 1997. Its purpose is to facilitate 
        the meaningful and timely public and tribal partnership in all 
        of EM's key decisions and site programmatic efforts. It 
        supports DOE Headquarters in communicating inter-governmental 
        and public partnership policy and guidelines and ensuring their 
        consistent application and will provide technical and business 
        expertise and assistance in matters relating to inter-
        governmental and public partnerships.
    The above represent the major portion of FETC's EM activities. 
However, the FETC also has numerous small, directed activities carried 
out on an ad-hoc basis for the EM programs. Approximately $5 million 
per year of EM science and technology program projects are being 
conducted primarily as a pass-through to the Pittsburgh site support 
contractor.
    FETC also has a management link to the Western Environmental 
Technology Organization (WETO) in Butte, Montana. Last year DOE 
privatized the facility by selling it to MSE, Inc. Two FETC employees 
reside in Butte and coordinate DOE activities with WETO. WETO has 200 
MSE, Inc., employees who conduct R&D in various cleanup technologies. 
Other than overseeing the base contract with MSE, Inc., the impact of 
this activity on the FETC is minimal.
    Question. Do you anticipate the mix of focus areas shifting in 
fiscal year 1998?
    Answer. We do not expect any shift of the focus area mix at this 
time.
    Question. What strengths does FETC offer the EM program that are 
not readily available elsewhere?
    Answer. The Federal Energy Technology Center (FETC) has been 
involved in the Environmental Management (EM) program since 1992, when 
FETC was invited to assist in EM's technology development program 
effort. Five core strengths of the FETC organization formed the basis 
for this partnership with EM: (1) the ability to do innovative 
contracting with the private sector, using Federal employees for all 
management and administrative functions; (2) knowledge of private 
sector business operations and a proven record of working with the 
private sector; (3) knowledge of environmental and waste management 
technologies and engineering practices, albeit for DOE's fossil energy 
programs; (4) the ability to do cradle-to-grave performance, cost, and 
environmental assessments of innovative technology; and (5) a non-
conflicted status--FETC is not a problem holder, develops no cleanup 
technologies internally, and therefore has no bias for particular 
cleanup technologies.
    Question. Given the strengths FETC can bring to the environmental 
management program, is this a partnership that the Department will 
continue to support?
    Answer. The Department expects to continue to support the 
partnership with FETC. Private sector contractors are given the 
opportunity to help solve the DOE site problems. Private sector 
solutions can contribute significantly to the success of the 
Environmental Management cleanup program.
    Question. One of the successes in FETC's participation in the 
environmental management program has been its use of the capabilities 
at the International Union of Operating Engineers Hazardous Materials 
Center in Beckley, West Virginia. How has this partnership benefitted 
the EM program?
    Answer. The purpose of the partnership with the International Union 
of Operating Engineers (IUOE) is to promote cooperation among the 
skilled workers who will use innovative environmental technologies, the 
DOE field sites that use the technologies and the technology developers 
who are marketing their products. The IUOE has been working with ten 
separate technology developers, Florida International University, and 
numerous sites to identify interface and training requirements during 
the development of the technology, thus enhancing the efficacy of the 
technology and acceptance by site workers. Tangible benefits of this 
partnership to the Environmental Management program are reduced human 
exposure during cleanup efforts and cost reductions in applying 
innovative technologies. At least seven of the technologies evaluated 
by the IUOE are scheduled for use at DOE sites.
    Question. What level of funding has been provided for this 
agreement (with the IUOE)?
    Answer. The agreement with the IUOE is a financial assistance award 
that is funded in annual budget periods, based on an agreed to work 
scope for the budget period. To date, $6,900,350 has been provided to 
the IUOE. The total estimated value of the Cooperative Agreement is 
$11,910,823, with an expected fiscal year 1998 funding level of 
approximately $3 million.
    Question. What is the duration of the agreement (with the IUOE)?
    Answer. The duration of the agreement with the IUOE, which began 
September 28, 1995, is five years and will expire September 28, 2000.
                    federal energy technology center
    Question. A newly evolving role for FETC in the environmental 
management program is the Department's support for establishment of a 
Center of Excellence for Acquisition at FETC. This center will conduct 
three functions for the entire environmental management organization--
establishment of consistent acquisition strategies; consistent business 
management practices; and support to the DOE field offices as they 
carry out the 10-year plan to clean up the contaminated sites.
    How many additional jobs will be brought to FETC as a result of 
this center? Are these positions supported in the proposed fiscal year 
1998 budget for EM?
    Answer. There are 14 FTE positions that will be filled with current 
Environmental Management staff located in Washington, D.C. These 
positions are supported in the fiscal year 1998 budget.
    Question. Are the dollars necessary to support these additional 
personnel being provided to FETC in fiscal year 1997?
    Answer. As each employee is selected and transferred to the FETC 
Center for Acquisition and Business Excellence, funding for salaries, 
benefits and related expenses are provided to FETC from the losing 
organization based on the salary requirements for the number of months 
remaining in the fiscal year.
    Question. What is the plan for fiscal year 1998?
    Answer. In fiscal year 1998, funding will be transferred from the 
losing organization for each employee who has accepted a position at 
FETC during fiscal year 1997.
                                 ______
                                 

                 Questions Submitted by Senator Murray

                             privatization
    Question. While the DOE has addressed labor concerns in the TWRS 
privatization contract, contract, I hear continuing concerns about how 
this new policy might affect other workers across the complex or on 
other privatization projects at Hanford. Does the DOE have a 
Department-wide policy on how labor issues will be addressed under 
privatization? If not, does it intend to formulate one in the very near 
future?
    Answer. The Department does not yet have a comprehensive policy on 
how labor issues will be addressed under privatization. However, the 
Department has committed to develop workforce privatization policies. 
We are encouraging workers, communities, unions, and other stakeholders 
to use the comment period on the recently published draft report of the 
Privatization Working Group to recommend proposed policies and to 
identify their concerns. The Department will form a task force which 
will be comprised of selected members from the Privatization Working 
Group and other appropriate HQ and field representatives to consider 
comments received and develop appropriate policies.
    Question. Please explain in detail how the DOE arrives at its 
conclusions that privatization will always save the taxpayer money. It 
seems that savings are totally dependent upon how risk is allocated; 
how capital is raised (can't the government almost always borrow 
capital at a lower rate?); and whether a technology is tested and tried 
or whether it is a riskier new process/product.
    Answer. The Department has not concluded that privatization will 
always save the taxpayer money. Numerous projects have been considered 
that were rejected as candidates for privatization because of the risks 
represented by unknowns (such as unclear definition of end product, 
regulatory uncertainty, insufficient scope definition, etc.). For 
projects that have a well-defined scope, clear product or service 
requirements, a path forward for the regulatory approach, stakeholder 
acceptance, and are competitively bid, it is expected that the 
competitive forces of the marketplace reward efficiency, challenge new 
players to participate and often lead to innovative approaches and 
technologies.
    Savings are heavily dependent on how risk is allocated. The terms 
and conditions of the contract determine the degree of mutual benefit 
by allocating risk and reward. If the contract shifts too much risk to 
the private sector, costs can increase to the extent that either the 
privatization would not save money for the Government or private sector 
interest in the procurements may be eroded. If, on the other hand, the 
Government does not shift enough risk to the private sector, a contract 
can limit the ability to minimize costs.
    The cost of government financing is expected to be less than the 
cost of capital required by the private sector that may be raised from 
debt financing. Therefore, DOE must ensure the projects are attractive 
to the financial community. The availability of debt financing and the 
interest rate charged for that debt is primarily a function of how 
risks are allocated.
    The Department will establish realistic, well-defined, and 
equitable allocations of the financial risks in each privatization 
project. A careful balancing of these factors will result in the 
protection of the Government's interests, broad participation by 
qualified contractors, and reliance on the expertise of the private 
sector in accordance with best commercial practices.
    Privatization is cost-effective where the improvements in cost, 
technical, and schedule performance outweigh the differential cost of 
financing.
                         technology development
    Question. I strongly support the idea of moving new technology to 
market after the national labs or other parts of the federal government 
have helped finance such technology. However, I am concerned about the 
lack of progress in achieving this goal. Please explain how the DOE 
intends to make changes in the program to get technology deployed.
    Answer. Innovative and alternative technologies that reduce risks, 
lower cleanup costs, and accelerate schedule are already contributing 
to DOE cleanup projects. To optimize use of new technologies, where 
maximum benefits can be derived, the Department is proposing a 
technology deployment initiative to serve as a catalyst to spur 
widespread application of innovative technologies. The initiative will 
fund the first application of a technology meeting multi-site 
performance specifications. Successful implementation of these 
technologies will enhance acceptance and widespread use of new 
processes by reducing the business risks associated with using new 
technology.
                        fast flux test facility
    Question. Several DOE studies indicate the FFTF could provide a 
less expensive, less controversial source of tritium for the years 
prior to operation of an accelerator. I understood the DOE intended to 
submit a reprogramming request to ensure cleanup monies were not being 
used to keep this important machine in hot standby. What is the status 
of that request?
    Answer. A reprogramming request has been submitted to Congress to 
reprogram $32.1 million of fiscal year 1997 funds for the Fast Flux 
Test Facility (FFTF) at Hanford, Washington. The Department plans to 
maintain the FFTF in a ``standby'' state to permit a thorough 
evaluation of the facility as a possible tritium production source and 
to review the feasibility of using the facility for medical isotope 
production.
    The Department's fiscal year 1997 budget authority includes $39.7 
million for the Advanced Reactors Transition Program at Hanford. The 
Advanced Reactors Transition Program is within the Office of 
Environmental Management's (EM) Nuclear Material and Facility 
Stabilization decision unit of the Energy Supply, Research and 
Development Appropriation. The Department's proposal is to reprogram 
$31.1 million of these funds, which are required for surveillance and 
maintenance activities at the FFTF and the Fuel and Materials 
Examination Facility, to the Office of Nuclear Energy, Science and 
Technology's (NE) Termination Costs decision unit of the same 
appropriation. Actions which would irrevocably preclude restart of the 
facility would be deferred until a decision is made on the future use 
of the facility. Cleanup activities at the Hanford site, that are not 
related to standby status of the FFTF, but are funded as part of the 
same line item (such as building 309 and nuclear energy legacies 
deactivation), will not be affected by the decision to continue the 
facility in ``standby''.
    The Department also intends to reprogram $1.0 million from NE's 
Advanced Radioisotope Power Systems decision unit to the NE Termination 
Costs decision unit to conduct further detailed technical evaluations. 
These evaluations will be conducted to gain greater understanding of 
technical and cost issues related to a potential role for the FFTF in 
tritium and medical isotope production.
                             tritium supply
    Question. In addition, I had understood the DOE intended to submit 
authorizing legislation to address needed changes in law to allow use 
of commercial nuclear reactors for tritium production in order to gauge 
congressional support for this second track of the ``dual track 
strategy'' for tritium production. What is the status of that 
legislation?
    Answer. Proposed legislation to amend the Atomic Energy Act to 
allow the use of commercial nuclear reactors has been submitted with 
our draft fiscal year 1998 authorization bill.
                                 ______
                                 

               Questions Submitted by Senator Lautenberg

        formerly utilized sites remedial action program (fusrap)
    Question. The President's requested budget increase of $107 million 
for the FUSRAP program demonstrates a strong commitment to completing 
the work at the sites in New Jersey, including the Wayne Interim 
Storage Site. DOE has committed to completing the cleanup program by 
fiscal year 2002. It is disappointing, however, that despite several 
years of effort, DOE has still not completed a Record of Decision for 
the Wayne site.
    Please describe the status of DOE's informal dispute with the 
Environmental Protection Agency over (1) cleanup levels at Wayne, and 
(2) the timing of the Record of Decision for Wayne. When, in DOE's 
opinion will these disputes be resolved? What issues remain to be 
resolved?
    Assuming that the President's fiscal year 1998 budget request is 
approved by Congress and that budget levels remain constant, please 
indicate how resources would be devoted to the cleanup of the Wayne 
site between fiscal years 1998 and 2002.
    In order to determine appropriate funding levels for the Wayne site 
and the FUSRAP program overall, the Committee needs information on the 
prospects for recovering costs for cleanup from the potentially 
responsible parties. Please provide information on the status of cost 
recovery efforts for the Wayne site.
    Answer. The Department and Environmental Protection Agency (EPA) 
are in the process of developing a mutually agreeable solution to their 
informal dispute. The informal dispute is focused on the schedule for 
the decision documents for the sites. In the interim, the Department is 
committed to making progress toward cleanup at these sites. The 
Department anticipates that the informal dispute can be resolved within 
the next 3 to 6 months. Senior managers from both agencies recently met 
on April 18, 1997, to assure the progress continues to be made towards 
resolution. The Department of Energy's site manager and the EPA Region 
II project manager are working together to develop a mutually 
acceptable schedule for issuing Proposed Plans and Records of Decision 
for the Wayne and Maywood sites which would resolve the matter. 
Development of the milestone schedules will consider the physical work 
being done in the field, the need for additional studies to support the 
remedy selection process, and assumptions regarding available funding.
    Assuming the fiscal year 1998 Congressional budget request is 
approved, and these funding levels remain constant, the Wayne site will 
be completed in the fiscal year 2000-2001 time frame. The fiscal year 
1998 budget request and outyear funding projections have been planned 
at the State, rather than site level. Outyear funding projections for 
the four remaining FUSRAP sites in New Jersey are anticipated to be 
approximately $60M per year through fiscal year 2002. Since final 
remedy decisions have not been reached, some adjustments to the outyear 
funding may be required to accommodate the specific scope of work and 
the final agreed to cleanup schedule.
    The Department is engaged in active negotiations with a potentially 
responsible party for the Wayne site. While we are hopeful that cleanup 
costs will be recoverable, there is no certainty as to the amount which 
may be recovered or when these funds may become available. In 
accordance with Justice Department policy and agreement of the parties, 
details on the outgoing discussions are confidential.
                                 ______
                                 

                 Questions Submitted by Senator Allard

                              rocky flats
    Question. Is it not true that Rocky Flats contains one of the 
nation's largest stockpiles of plutonium with most of it in forms that 
are not proven to be stable or currently in a condition safe for 
shipment or long term storage?
    Answer. Rocky Flats does have one of the largest inventories of 
plutonium, but a significant portion of that inventory is being or will 
be shipped to other sites for storage and disposition. All of the 
current Rocky Flats inventory is considered sufficiently stable to meet 
risk goals for the immediate future. Operations are planned or in 
progress which will further stabilize and repackage portions of the 
inventory for long term storage and for safe shipment to other sites 
for processing, storage and disposition. These operations are being 
undertaken to responsibly reduce long term hazards posed by the 
material to any local resident as well as to workers.
    Question. Is it not true that Rocky Flats physical safety 
infrastructure is old and decaying and by DOE's own estimates contains 
5 of the 10 ``most dangerous buildings in America'' as identified in 
the 1994 Plutonium Vulnerability Study including the first and second 
most dangerous buildings?
    Answer. The Rocky Flats physical plant is aging, but not all of it 
is needed for the current cleanup mission. Those systems and facilities 
which are needed are being maintained and upgraded to assure the 
continued safety of the site. Five Rocky Flats facilities were 
identified in the cited report to be among the 14 facilities posing 
greatest plutonium ``vulnerabilities'' as compared to other plutonium 
facilities. Much has been done since 1994 to reduce the risks to 
workers and the public posed by plutonium in these buildings. 
Improvements including building structural and physical system upgrades 
and repairs, decontamination of sites and facilities, stabilization or 
repackaging of materials, relocation of stored material to the safest 
available storage locations, shipment of some materials off-site, and 
analysis and engineering evaluations to assure that the public and 
workers are adequately protected and that the changes reduce risk in 
the most cost-effective way possible.
    Question. Is it not true that the primary contaminant pathway of 
concern for plutonium is by air into the human respiratory system and 
that minute amounts of plutonium could create significant health 
concerns in this way?
    Answer. The potential for significant health consequences from 
internal exposure to plutonium is the reason for the basic design and 
operational controls that are in place and that are intended to prevent 
the release of plutonium to working areas of the environment. Our 
design and controls provide multiple barriers to such releases, monitor 
for releases, and provide for structured responses which further 
enhance protection even if one barrier is accidentally degraded. We 
evaluate the adequacy of protection even for severe accidents which 
might exceed by a significant degree any ever experienced in the area.
    Question. Is it not true that the prevailing wind direction from 
Rocky Flats is westerly, toward the Denver population area, the 
nations's 24th largest metropolitan area with 2.2 million people, and 
that winds in excess of 100 miles per hour frequently occur over the 
plant in the direction of Denver which has its city hall and State 
Capitol less than 15 air miles away?
    Answer. The proximity and growth of the Denver metropolitan area 
has been a significant factor in the Department's commitment to remove 
plutonium from the site and to decommission the site on an accelerated 
schedule.
    Question. Is it not true that Rocky Flats sits directly in 
watersheds serving 400,000 people and while mitigations have been 
implemented is it possible that a release from the site could 
contaminate these sources?
    Answer. The Department has taken a number of measures to minimize 
the potential for any releases from the Rocky Flats site that could 
pose a risk to human health and the environment. The Department 
continues to clean up past chemical and radiological contamination, 
prevent releases and contamination of groundwater, routinely monitor 
water sources on the site and in adjacent areas, and to work 
cooperatively with both the Colorado Department of Public Health and 
Environment and with the Environmental Protection Agency to plan both 
cleanup and effluent controls.
    Question. Is it not true that given these conditions a plutonium 
release from Rocky Flats could have potentially drastic consequences on 
the actual or perceived public health and safety and/or the Denver 
metropolitan area economy and property values?
    Answer. The Department is committed to preventing any releases of 
plutonium from the Rocky Flats site. Independent studies performed by 
the State of Colorado confirm that no significant effects are apparent 
beyond the borders of the site from over 40 years of experience of the 
plant. Public risks have declined rather than increased in recent 
years. Still, we are seeking to eliminate the potential for a release 
by accelerating site deactivation. Perceptions are sometimes difficult 
to influence, but we are working hard to ensure that the facts are made 
available, so that the public can accurately understand the risks.
    Question. Is it not true that if there was a release of plutonium 
it could expose the government to billions of dollars of unbudgeted 
liabilities?
    Answer. A significant release of plutonium that caused physical 
injury of persons or damage to property could expose the Government to 
potential liability, the amount of which would depend on the extent of 
the resulting injuries and damage. Under the Price-Anderson Act, as 
amended, Congress has legislated that the Department of Energy shall 
indemnify its contractors for any ``public liability'' resulting from a 
``nuclear incident'' (as defined therein)--i.e., a release of 
radioactive or other toxic materials resulting in ``bodily injury, 
sickness, disease, or death, or loss of or damage to property, or loss 
of or use of property.'' 42 U.S.C. Sec. Sec. 2210.d, 2014. q & w. 
Neither the Department of Energy nor the Government as a whole has 
specifically budgeted for such a contingency.
                          rocky flats land use
    Question. Is it not true that a responsible closure strategy and 
regulatory agreement exists which is supported by the environmental 
regulators and the state and local elected officials and that a symbol 
of the Colorado community's commitment to reasonableness and speed of 
the closure is that a residential cleanup standard is not required even 
though the site lies in a desirable urban area?
    Answer. The land uses for the Rocky Flats Environmental Technology 
Site in Colorado are prescribed by the Rocky Flats Cleanup Agreement 
signed by the Department of Energy (DOE), the Environmental Protection 
Agency, and the State of Colorado in July 1996. The preamble of the 
agreement states that cleanup decisions and activities are to be based 
on open space use and limited industrial use of the Rocky Flats site. 
These future land uses are consistent with the views of most of the 
local governments. The Cities of Broomfield and Westminster, adjacent 
to the site, have expressed concern about the long-term land use 
restrictions. Also, the Citizen Advisory Board has expressed concerns 
about the cleanup standards.
    Specific future land uses and post-cleanup designations at the 
Rocky Flats site are, and will be, developed in consultation with local 
governments and stakeholders. The Rocky Flats Local Impacts Initiative, 
a coalition of local governments, workers, community-based interest 
groups, private sector interests, and surrounding landowners and 
citizens, is currently working with DOE and local development agencies 
to encourage business development at the Rocky Flats site. The Rocky 
Flats Future Site Uses Working Group, a coalition representing a broad 
spectrum of interests and stakeholders, has also developed 
recommendations regarding future use of the Rocky Flats property. 
Residential development at Rocky Flats has not been recommended by this 
group, nor by any other planning groups. Commercial and industrial uses 
of developed portions of the site are being considered and would be 
beneficial. Even though commercial development in undeveloped portions 
of the property has not been ruled out, preservation of this area as 
open space is consistent with DOE policy, the Rocky Flats Future Site 
Working Group recommendations, and the Jefferson County Planning 
Department recommendations. The Jefferson County Board of Commissioners 
has also adopted a resolution stating its support of maintaining, in 
perpetuity, the undeveloped Rocky Flats buffer zone as open space. The 
open space designation assumes no development will occur in these 
areas.
                labor union agreements with contractors
    Question. Is it not true that the labor unions have agreements with 
the contractor which support the site closure and contain compromises 
to increase productivity and efficiency?
    Answer. Yes. The labor unions and contractor have agreed on a 
variety of innovative and flexible work assignment guidelines that will 
allow union members to work across the traditional work assignment 
boundaries. We expect that implementation of these guidelines will 
support site closure and promote increased site productivity and 
efficiency.
                             ten-year plan
    Question. Is it not true that Rocky Flats can be safely closed in 
10 years or less (by the end fiscal year 2006) to an open space 
configuration with all plutonium or waste shipped off site or stored 
(for future off-site disposal) in newly constructed safe facilities?
    Answer. The Department is in the process of compiling and 
evaluating draft ``2006 Plans'' (formerly known as the Ten-Year Plans) 
submitted by our Operations Offices on February 28, 1997, for 
development of a discussion draft of the ``EM 2006 Plan. It is expected 
that the majority of sites will complete cleanup in ten years. We 
recognize that for large sites such as Hanford, the Savannah River 
Site, and the Idaho National Engineering and Environmental Laboratory, 
site closure will take substantially longer than ten years due 
primarily to the large quantities of high-level and transuranic waste 
requiring management. We are currently evaluating scenarios which could 
lead to Rocky Flats being safely closed by 2006. When completed, the 
draft document, which is scheduled for release soon along with draft 
documents, will present our analysis of whether Rocky Flats closure is 
envisioned by 2006.
    Question. Is it not true that this 10 year closure scenario also 
provides the government with the lowest life cycle cost for the 
closure?
    Answer. One major reason ``The 2006 Plan'' vision was established 
by Assistant Secretary Al Alm was the pressing need to complete as much 
cleanup as possible over the next decade to reduce both economic and 
environmental long-term liabilities. While we are presently evaluating 
the February 28, 1997, draft ``Site 2006 Plan'' submittals, we 
anticipate significant reductions in site life-cycle costs and 
acceleration of site completion dates as part of the discussion draft 
of the 2006 Plan compared to previous estimates. Complex-wide, life-
cycle costs calculated under the 2006 Plan process will be the lowest 
published to date.
    Question. Is it not true that this 10 year closure would reduce the 
Rocky Flats current outlays of over $600M/year, in 10 years, to 
substantially less than $50M/yr long term management and monitoring 
cost, freeing up this funding for other pressing needs at DOE or other 
agencies?
    Answer. As part of the draft ``Site 2006 Plan'' submittals to 
Headquarters, two potential planning cases were examined--one at a $5.5 
billion and the other at a $6.0 billion per year budget starting in 
fiscal year 1999. In developing two planning cases, EM has been able to 
analyze the impacts of different funding levels on site life-cycle 
costs and projected site closure dates. Although these scenarios are 
not exhaustive of all possible planning scenarios, they serve to 
highlight the major issues related to alternate funding scenarios and 
EM's ability to meet the ``2006 Plan'' vision. These analyses will be 
part of the discussion draft of the ``2006 Plan'' document scheduled to 
be released soon to the public for review and comment.
    Question. Is it not true that this 10 year closure can be achieved 
by increasing funding to Rocky Flats over the current plan by less than 
2 percent of the proposed annual EM budget?
    Answer. As discussed in response to your previous question, the 
Department is currently analyzing two planning cases to determine the 
impacts of different funding levels on site life-cycle costs and 
projected site closure dates. The Department is also exploring various 
options to further accelerate site closures within the constraints of 
the two planning cases.
    One option would be to adjust the two planning cases based upon 
each site achieving specific performance enhancement targets. Another 
option being considered is to not only assume performance enhancements 
at each site, but to also make some minor reallocations of resources 
within the $6.0 billion planning case to a few selected sites to 
further accelerate site closure. One site which was assumed to receive 
a minor reallocation for purposes of analysis was Rocky Flats. When the 
analysis is completed, it will be presented in the discussion draft of 
the ``2006 Plan''.

                          subcommittee recess

    Senator Domenici. The subcommittee stands in recess until 
April 24, at 9:30 a.m.
    [Whereupon, at 11:05 a.m., Tuesday, April 22, the 
subcommittee was recessed, to reconvene at 9:30 a.m., Thursday, 
April 24.]



    ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 1998

                              ----------                              


                        THURSDAY, APRIL 24, 1997

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 9:32 a.m., in room SD-124, Dirksen 
Senate Office Building, Hon. Pete V. Domenici (chairman) 
presiding.
    Present: Senators Domenici, Bennett, Craig, Reid, Byrd, 
Murray, Kohl, and Dorgan.

                       DEPARTMENT OF THE INTERIOR

                         Bureau of Reclamation

STATEMENT OF PATRICIA J. BENEKE, ASSISTANT SECRETARY OF 
            INTERIOR FOR WATER AND SCIENCE
ACCOMPANIED BY ELUID L. MARTINEZ, COMMISSIONER

                           OPENING STATEMENT

    Senator Domenici. The hearing will please come to order. 
Let me just say for all witnesses we have kind of a fractured 
morning, but I consider the testimony and the questions to be 
important. So I am going to try to get this done in spite of a 
couple of other commitments Senator Reid has a couple of 
appointments that he must attend, so he is going to go first 
here for a few minutes. Then, I am going to go until 10:30 or 
10:45--if we are not finished I am going to recess for a while 
and go to a closed hearing related to the treaty that we are 
talking about. I should not be there too long. If I do get tied 
up too long, I will excuse the witnesses or call and excuse 
you. Otherwise, the witnesses will have to wait until I return, 
which may be 11 o'clock or 11:30, something like that.
    Senator Reid, would you care to proceed?

                        STATEMENT OF HARRY REID

    Senator Reid. Mr. Chairman, thank you very much. As I 
indicated to you, I have to go to a meeting at the White House 
at 10 o'clock. We are going to work on your budget, on our 
budget. We hope to make some progress there. So I have to leave 
here about a quarter of, so I appreciate very much your 
allowing me to be out of order here just for a few minutes.
    Mr. Chairman, both of these panels are extremely important 
to the country, the West, and especially Nevada. I have enjoyed 
my working relationship with Secretary Beneke. The Bureau of 
Reclamation, of course, we in Nevada are very aware and 
cognizant of the Bureau of Reclamation. The first reclamation 
project in the history of the country was in Nevada, the 
Newlands project, which has been good, but not all good. We 
have had some problems with it over the years. We are working 
to rectify some of those as we speak. The Bureau of 
Reclamation, I should indicate to Mr. Martinez that one of his 
predecessors as Commissioner of the Bureau of Reclamation was a 
Nevadan, Bob Broadbent, who did a very fine job. He left here 
to go back and run McCarren Airport, which is the seventh or 
eighth busiest airport in the world. He has just announced his 
retirement, and all of his good training he says came from his 
work as Commissioner of the Bureau of Reclamation.
    We look forward to this testimony, I will have my staff 
here, with your permission, Mr. Chairman, of this panel and the 
second panel. I have some questions I would like to submit in 
writing, and I will do that recognizing the importance of the 
Bureau of Reclamation and the Corps of Engineers to the State 
of Nevada and how closely we have had to work with them these 
past few years. The problems with the Corps have been 
exacerbated by the fact that in southern Nevada, the Las Vegas 
area, it is growing by from 6,000 to 7,000 people a month, and 
that has created tremendous problems in that arid area. The 
Corps has been involved in projects approaching $1 billion 
there now.
    Thank you, Mr. Chairman, for allowing me to go out of 
order. As I indicated, with your permission I will submit my 
questions in writing.
    Senator Domenici. Thank you, Senator Reid. Also let me 
thank you for your diligence on this subcommittee. I look 
forward to working with you. I mean, your genuine interest in 
some of these areas is going to make our joint and mutual job a 
lot easier. I appreciate that very much.
    I have some opening remarks, but frankly I think I am just 
going to put them in the record, in the interest of time. I 
want to welcome you. Obviously, Eluid, it is nice to have you 
here. I hope with all the work you have got you have plenty of 
time to spend in New Mexico for one reason or another, just for 
your own health and well-being. It is a great place when you 
are all confused and confounded up here, it is a wonderful 
place to go. I hope you get a chance to do that every now and 
then.
    And Patty, it is really great to see you back. We worked 
together for many years on the Energy Committee. You are doing 
a good job at Interior. I look forward to your testimony.

                           prepared statement

    I understand we are going to proceed in the following 
manner, Assistant Secretary of Interior Beneke is going to go 
first, Commissioner Martinez second, and then we will proceed 
to the Corps witnesses. Please proceed.
    [The statement follows:]

             Prepared Statement of Senator Pete V. Domenici

    I want to welcome everyone to the hearing today. We have a lot of 
territory to cover this morning. Therefore, the committee will need the 
help and understanding of the members in order to get through it in an 
orderly manner.
    First, we will hear from the Department of the Interior and the 
Bureau of Reclamation. Patricia Beneke, Assistant Secretary of the 
Interior for Water and Science will testify in support of the 
President's budget request for the Bureau of Reclamation and the 
Central Utah Project Completion project. The Commissioner of the Bureau 
of Reclamation, Eluid Martinez will then present his summary of the 
specific programs included in the fiscal year 1998 request for the 
Bureau of Reclamation.
    Following the Bureau of Reclamation, the committee will turn to the 
U.S. Army Corps of Engineers and will hear from Assistant Secretary of 
the Army for Civil Works, H. Martin Lancaster; Lt. Gen. Joe N. Ballard, 
Chief, U.S. Army Corps of Engineers; and Maj. Gen. Russell Fuhrman, the 
Director of Civil Works for the Corps of Engineer.
    Before calling on Assistant Secretary Beneke, I should say that 
both agencies have large increases proposed in their budgets for next 
fiscal year. The Bureau of Reclamation has included $143 million to 
initiate the California Bay-Delta Ecosystem Restoration program, a 
program with a total cost in the billions of dollars. In the Corps of 
Engineers budget, $330 million is being requested to transition to full 
funding of capital asset acquisition. While I'm sure both of these 
requests have merit, they will have to be given careful consideration 
before committing large sums to them in 1998. If you exclude these 
major initiatives from the budget, the funding levels for the remaining 
on-going projects and activities of both the Bureau and Corps are at 
about the same level as the current fiscal year.
    We must also keep in mind that the non-Defense discretionary 
allocation for the Energy and Water Subcommittee has consistently been 
below the President's request for the past several years. That 
obviously means that the subcommittee has had to find reductions, while 
still trying to accommodate member requests. Fiscal year 1998 will 
probably be no different--I am sure others have noticed the large 
increase and have ways to use the additional resources. Therefore, it 
will be essential that the Subcommittee receive a good increase over 
the current fiscal year in order to formulate an acceptable bill.
    The subcommittee is meeting at an appropriate time. The flooding in 
the Northern Great Plains highlights the importance of the flood 
control projects constructed by the Federal government. I received 
Annual Flood Damage Report for fiscal year 1995 from Secretary 
Lancaster recently which indicates that the value of the flood damages 
prevented by Corps projects and emergency response totaled $26.8 
billion in fiscal year 1995, significantly above the $16.2 billion 10-
year average for Corps projects and operations. So, these are important 
programs not only to the people in the local areas affected, by to the 
Nation as a whole.

                    Statement of patricia j. beneke

    Ms. Beneke. Thank you very much, Mr. Chairman. I am pleased 
to appear again before the subcommittee to testify in support 
of the President's fiscal year 1998 budget for the Bureau of 
Reclamation and the central Utah project.
    The budget request for the Department reflects the 
administration's continued commitment to address natural 
resource issues by working in geographically based partnerships 
not only across jurisdictional boundaries within the Federal 
Government, but also with the States, tribes, local 
communities, and affected stakeholders.
    This approach is reflected in several major initiatives in 
the Department's fiscal year 1998 budget, including restoration 
of the Everglades in south Florida, implementation of the 
President's forest plan in the Pacific Northwest, and 
restoration of California's bay-delta. This morning, in the 
interest of time, I would like to highlight only one or two key 
elements in Reclamation's budget, and then also briefly mention 
the budget request for the central Utah project, for which my 
office has implementation responsibility.

                          california bay-delta

    The President's budget request contains the full $143.3 
million authorized last fall in the Bay-Delta Environmental 
Enhancement and Security Act. The authorization became 
effective last November when California voters approved a $995 
million bond issue to cover State cost sharing for activities 
to restore the bay-delta and for other water resource 
activities in California. The President's budget proposes to 
place this $143.3 million in a new account under the Bureau of 
Reclamation for use by a number of participating agencies based 
on plans being developed by a consortium of Federal and State 
agencies, CALFED, with extensive stakeholder input. The 
administration's proposed appropriation language requires the 
Secretary of the Interior to approve those plans. The funds 
would be used to match non-Federal funding under the terms of a 
cost-sharing agreement which is expected to be finalized this 
summer.
    The CALFED staff, working with participating agencies and 
based on extensive stakeholder input, has developed a 
preliminary fiscal year 1998 program that covers habitat 
acquisition and restoration, improvements to fish screens and 
passage, and exotic species management. All provide early 
implementation benefits.
    These preliminary plans are outlined in this material, 
which I would request be submitted and included in the 
committee's record. We will keep the subcommittee apprised as 
the fiscal year 1998 program is finalized.
    [The information follows:]
    [Clerk's note.-- The information referred to can be found 
in the Energy and Water Subcommittee files.]

                        Other Priority Programs

    Ms. Beneke. I would like also to note two other issues 
which are priorities of both the Commissioner and myself that 
are reflected in the budget. The 1998 budget submission 
includes adequate funding for operation and maintenance, and in 
addition includes an increase of about $22 million for the dam 
safety program.

                          central utah project

    I will now turn briefly to the central Utah project. 
Consistent with the Central Utah Project Completion Act, the 
Secretary has delegated to my office responsibilities for 
completion of this project and funding of fish, wildlife and 
recreation mitigation and conservation. Ron Johnston, the 
program coordinator, is here today to help answer any questions 
that the subcommittee might have regarding the project. I would 
like to report that I recently signed a record of decision for 
the Wasatch County water efficiency and Daniel replacement 
projects which permits the district to proceed with 
construction of that feature.
    The overall fiscal year 1998 request for the central Utah 
project completion account provides $41.2 million for use by 
the district, the commission, and the Department to implement 
titles II through IV of the Central Utah Project Completion 
Act.

                           prepared statement

    That completes my statement today. Again, it is a privilege 
and an honor to be here before the subcommittee, and I would be 
pleased to answer any questions.
    [The statement follows:]

                Prepared Statement of Patricia J. Beneke

    I am pleased to appear before this Subcommittee again as Assistant 
Secretary for Water & Science to testify in support of the President's 
fiscal year 1998 budget for the Bureau of Reclamation and the Central 
Utah Project.
    The budget request for the Department of the Interior, including 
these programs, reflects the Department's and the Administration's 
continued commitment to address natural resource issues by working in 
geographically-based partnerships that cross not only the 
jurisdictional boundaries within the Federal government but also 
involve the States, Tribes, local communities and affected 
stakeholders.
    This approach is reflected in several major initiatives in the 
Department's fiscal year 1998 budget, including actions to restore the 
Everglades in South Florida, to implement the President's Forest Plan 
in the Pacific Northwest and to restore California's Bay-Delta. Because 
finding for the Bay-Delta Restoration Program is included in the Bureau 
of Reclamation's budget request, I will discuss it in more detail this 
morning. Eluid Martinez, the Commissioner of the Bureau of Reclamation 
is appearing with me today. His testimony will address details of the 
fiscal year 1998 budget request for the Bureau of Reclamation. This 
morning I would like to highlight only one or two key elements in 
Reclamation's budget and also discuss the request for the Central Utah 
Project, for which my office is responsible. Ron Johnston, Program 
Director for the Central Utah Project (CUP) Completion Act Office is 
also with me today.
                    california bay-delta restoration
    The President's fiscal year 1998 budget request contains the full 
$143.3 million authorized last fall in the Bay-Delta Environmental 
Enhancement and Security Act. The historic 1994 Bay-Delta Accord 
recognized that a comprehensive package of actions is required to 
strike a fair balance among competing uses, restoring and protecting 
the Bay-Delta ecosystem while providing the reliable water supply on 
which the State's long-term economic health depends. Under the Accord, 
CALFED--a consortium of the Federal and State agencies with management 
and regulatory responsibilities in the Bay-Delta--has been charged with 
finding a balanced solution to the four main problems in the Bay-Delta: 
uncertain water supplies, aging levees, declining fish and wildlife 
habitat, and threatened water quality. Working with stakeholder groups, 
CALFED has begun the process of defining and analyzing options which 
can result in a comprehensive, long-term restoration program.
    Last fall, the Congress passed and the President signed the 
California Bay-Delta Environmental Enhancement and Water Security Act, 
which authorizes $143.3 million a year for three years in additional 
Federal spending for Bay-Delta ecosystem restoration. The authorization 
became effective in November 1996, when California voters approved a 
$995 million bond issue to cover State cost sharing for activities to 
restore the Bay-Delta and for other water resources activities in 
California. The President's budget proposes to place the $143.3 million 
in a new account under the Bureau of Reclamation, for use by a number 
of participating agencies based on plans to be developed by CALFED with 
extensive stakeholder input. The Administration's proposed 
appropriation language requires the Secretary of the Interior, in 
consultation with other Federal agencies, to approve those plans. These 
funds would be used to match non-Federal funding under the terms of a 
cost-sharing agreement which is expected to be finalized this summer.
    CALFED staff, working with participating agencies and based on 
extensive stakeholder input, has developed a preliminary fiscal year 
1998 program that covers habitat acquisition and restoration, 
improvements to fish screens and passage, and exotic species management 
that provide early implementation benefits. We will keep the 
Subcommittee apprised as the fiscal year 1998 program is finalized.
                         bureau of reclamation
    Aside from the request for the Bay-Delta Restoration initiative, 
the budget request for the Bureau of Reclamation totals nearly $764 
million, a decrease of almost $12 million. The request includes 
adequate funding for operations, maintenance and rehabilitation, which 
continues to be a high priority for both the Commissioner and me. The 
request also includes $96.1 million for the dam safety program, an 
increase of $22 million over last year's enacted level. Within this 
request for the dam safety program, $15.6 million is allocated to fully 
fund the Federal share of cost for modifications of Horse Mesa Dam in 
the Salt River Project. The request also includes funding for several 
key projects: Central Arizona Project, $61 million; Colorado River 
Basin Salinity Control, $25 million; Garrison Diversion Unit, $23 
million; Water Reclamation/Reuse projects, $32 million; Central Valley 
Project, $121 million; Columbia Basin Project and Columbia/Snake River 
Salmon Recovery, $23 million.
    I would like to report that the Bureau continues its notable 
efforts to reinvent itself and to fully implement its new mission as a 
water resources manager. Reclamation's water management mission places 
a greater emphasis on water conservation, recycling and reuse; 
developing partnerships with its customers; States and Tribes; finding 
ways to bring various interests together to address everyone's needs; 
transferring title and operation of some facilities to local 
beneficiaries; and achieving a higher level of responsibility to the 
taxpayer. All these changes have one goal--to meet the increasing water 
demands of the West while protecting the environment and the public's 
investment. The process of implementing change requires persistence, 
adequate financial and human resources and a clear focus on the goal. 
The President's fiscal year 1998 budget reflects the Administration's 
continued commitment to achieving that goal and acknowledges the 
successes which Reclamation has achieved to date as it evolves from a 
traditional civil works agency into a modern water resources management 
organization.
                  central utah project completion act
    Consistent with the Central Utah Project Completion Act, the 
Secretary has delegated to the Assistant Secretary responsibilities for 
completion of the project and funding of fish, wildlife and recreation 
mitigation and conservation. As a result, we established a program 
coordination office in Provo, Utah, with a Program Director to provide 
oversight, review and liaison with the Central Utah Water Conservancy 
District, the Utah Reclamation Mitigation and Conservation Commission, 
and the Ute Indian Tribe and to assist in administering the 
responsibilities of the Secretary under the Act. Ron Johnston, the 
program coordinator, is here today to help answer your questions. I 
would like to report that I recently signed a Record of Decision for 
the Wasatch County Water Efficiency and Daniel Replacement Projects in 
the Heber Valley which permits the District to proceed with 
construction.
    The fiscal year 1998 request for the Central Utah Project 
Completion Account provides $41.2 million for use by the District, the 
Commission and the Department to implement Titles II through IV of the 
Act, a decrease of $2.5 million from fiscal year 1997. The overall 
decrease reflects completion in early 1998 of a major contract for 
construction of the Diamond Fork Pipeline, and the Administration's 
efforts to bring the Federal budget into balance by 2002.
    The request includes $21.2 million for the District to continue 
construction and implementation of the Wasatch County Water Efficiency 
Project, the Daniels Replacement Project, and other water conservation 
projects; to continue construction of the Diamond Fork and Spanish Fork 
Canyon/Nephi Irrigation Systems; and to continue implementation of the 
Uinta Basin Replacement Project and groundwater recharge and 
conjunctive use programs. In addition, the fiscal year 1998 request 
includes $2.3 million to initiate construction activities on additional 
replacement facilities for the Uinta and Upalco Units that serve Indian 
and non-Indian users in the Uinta Basin.
    The request also provides $11.6 million for use by the Mitigation 
Commission for mitigation and conservation projects authorized in Title 
III of the Act and to complete other environmental commitments 
identified in Reclamation Planning documents. This amount is a decrease 
of $0.1 million from the fiscal year 1997 amount.
    This completes my statement today. Again, thank you for providing 
me the opportunity to discuss with this subcommittee our fiscal year 
1998 requests and the Commissioner and I will be pleased to respond to 
your questions.

                     Statement of Eluid L. Martinez

    Senator Domenici. Thank you very much, Madame Secretary. 
Commissioner, you may please proceed.
    Mr. Martinez. Mr. Chairman, I have submitted my full 
prepared statement for the record. I will try to summarize.
    Reclamation's fiscal year 1998 budget is requested in a new 
programmatic structure that more appropriately reflects 
Reclamation's mission as a water resources management agency. 
It is more responsive to the planning and accounting and 
reporting requirements of the Government Performance and 
Results Act of 1993. Reclamation has produced a final draft 
strategic plan, and is now providing outreach to its customers 
and to Congress. The plan is also available on Reclamation's 
web page.

                     summary of 1998 budget request

    The Bureau of Reclamation's request for fiscal year 1998 is 
for $907 million of current authority. Of this amount, $764 
million is requested for ongoing programs. This represents a 
decrease of approximately $11.8 million from the fiscal year 
1997 level. Reclamation's fiscal year 1998 request also 
includes an additional $143.3 million for a new California Bay-
Delta Ecosystem Restoration Program.
    I will highlight areas of our budget that may be of 
particular interest. Our budget request includes $32 million 
for water reclamation and reuse projects, which includes four 
continuing projects in California and one project in New 
Mexico. As you are aware, Congress authorized 16 additional 
water reuse projects through title XVI amendments late in the 
104th congressional legislative session. We were unable to 
consider them for funding in the fiscal year 1998 formulation 
process, but will give full consideration to these new projects 
in our fiscal year 1999 budget formulation.
    The Safety of Dams Program, which protects people and 
property downstream of Reclamation dams, continues to be one of 
our highest priorities. Upon becoming Commissioner in December 
1995, I instituted an outside expert peer review panel of 
Reclamation's dam safety programs to evaluate our programs' 
strengths and weaknesses. That report has been submitted to 
Congress, and I have initiated implementing its 
recommendations. Our fiscal year 1996 appropriation for dam 
safety was $99 million, our 1997 appropriation was $74 million, 
and our fiscal year 1998 request is $96 million.
    Reclamation has initiated a review, and as appropriate will 
make improvements to security at our facilities westwide. We 
have reprogrammed $5 million in fiscal year 1997 allocations 
for this effort, and are requesting $5 million to continue the 
effort in fiscal year 1998.
    Our budget request includes $10.5 million for six loans 
westwide, five in California and one in Oregon.
    We are requesting approximately $48 million for our Policy 
and Administration Program. This compares with a fiscal year 
1997 appropriation of $46 million.
    I would like to make the committee aware of our efforts to 
streamline our work force. Reclamation's fiscal year 1993 FTE's 
totaled 7,780 positions. Our fiscal year 1998 request is for 
6,412 positions, representing an 18 percent reduction, or 1,400 
positions.

                           prepared statement

    Mr. Chairman, this concludes my comments. I am prepared to 
respond to any questions you have.
    [The statement follows:]

                Prepared Statement of Eluid L. Martinez

    Mr. Chairman and Members of the Subcommittee, my name is Eluid 
Martinez, and I am the Commissioner of Reclamation. I appreciate the 
opportunity to appear before the Subcommittee this morning to discuss 
the Bureau of Reclamation's fiscal year 1998 budget request.
    Established in 1902 to develop and manage water and related 
resources in the Western United States, the Bureau of Reclamation's 
mission was implemented through building a large infrastructure, 
including many large dams and miles of irrigation canals. Reclamation 
is now the second largest producer of hydroelectric power in the 
Western states and the fifth largest electric utility in the West. As 
the largest water wholesaler in the country, Reclamation is bringing 
water resources to more than 31 million people and irrigating 
approximately 10 million acres of land. Reclamation's 58 powerplants 
generate an annual 40 billion kilowatt hours of electrical energy, 
which is the equivalent of 68 million barrels of oil saved. This is 
enough electricity to serve more than 6 million homes.
    Following a strategy of implementing Congressional directives 
through improved water resources management, the emphasis has changed 
from building large structures to implementing programs that use 
existing water supplies more efficiently to meet the increased 
population of the West. Bureau of Reclamation programs include a broad 
range of water uses, such as urban needs, water reclamation and reuse, 
irrigation, Indian self-sufficiency, fish and wildlife protection, 
endangered species recovery, environmental restoration, and recreation. 
At the same time, as Reclamation's infrastructure ages, projects are 
requiring more intense maintenance.
    Reclamation's fiscal year 1998 budget is presented in a new 
programmatic structure, which is a departure from past presentations. 
The new structure better reflects the activities of a water resources 
management agency and is more responsive to the planning, accounting, 
and reporting requirements of the Government Performance and Results 
Act of 1993. For fiscal year 1998 the Bureau of Reclamation is 
requesting $907 million of current authority. Of this amount, $763.6 
million is requested for Reclamation's ongoing programs, a decrease of 
$11.8 million from the 1997 enacted level. Reclamation's request also 
includes $143.3 million to be distributed among participating Federal 
agencies for a new California Bay-Delta Ecosystem Restoration program.
    Before moving into the more specific financial data, I'd like to 
discuss several programs of interest.
                             western floods
    During the winter of 1996-97 Reclamation-served areas have been 
experiencing unusually heavy water inflow and snowpack. Heavy rains and 
premature thawing of heavy snowfalls have caused significant flooding 
in parts of the West, especially in Northern California. The 
President's March 19 supplemental request to the fiscal year 1997 
budget includes $4.5 million to repair damage to Reclamation's 
facilities. The entire system of Federal facilities, including 
Reclamation's strategically placed multi-purpose dams, has saved 
surrounding communities from much flooding-related damage. Thanks in 
part to this Committee's prompt action on our request to perform 
emergency repairs following the gate failure at Folsom Dam, many 
critical areas of Northern California have been spared even more 
damage. We are continuing to monitor the current situation in the 
Dakotas.
                              partnerships
    In keeping with the President's Reinventing Government Initiative, 
the Bureau of Reclamation has been soliciting ``customer'' input; 
asking whether some of the work could be accomplished as well or better 
without Federal involvement; looking for ways to cut costs or improve 
performance; and seeking cost sharing opportunities and ways to put 
customers first, cut red tape, and empower employees.
    The Bonneville Power Administration will provide an estimated $48 
million to fund power operation and maintenance costs in the Pacific 
Northwest Region. In addition, BPA is also providing funds for major 
replacements and additions at powerplants in the Pacific Northwest. 
Other partnerships include cost sharing of more than $10 million by 
non-Federal entities in investigations of water resources issues, $3 
million from the National Fish and Wildlife Foundation, $10 million 
from partners in Endangered Species Conservation and Recovery Projects, 
and $5 million under the Efficiency Incentives Program.
                        performance measurement
    Reclamation's staff has drafted a strategic plan with goals 
targeted through fiscal year 2002 consistent with the Government 
Performance and Results Act of 1993. We will be consulting with the 
Committee about this draft. Consistent with these five-year goals, 
performance indicators have been developed to monitor annual progress 
for key program areas, such as Water and Energy Management and 
Development and Facility Operation, based on the new programmatic 
budget structure. An annual performance plan, including the indicators, 
will be developed. The new structure will focus on objectives, which 
will facilitate program and budget decisions. We plan to work with the 
Committee to ensure that any new indicators meet the needs of Congress 
as well as the Administration.
                     science and technology program
    The request for $7.8 million for the Science and Technology Program 
addresses high priority field-based needs related to facility and 
public safety, environmental quality and habitat condition, and 
reliability of future water supplies. Information derived from this 
program is of direct use to water users, aquatic ecologists, municipal 
and industrial water providers, and hydropower producers. Science and 
technology development is a functional component of all our resource 
management and facility operation activities. The request will allow 
Reclamation's funds to be leveraged an additional 1.5 times through 
partnership with other Federal and non-Federal entities. Priority needs 
for fiscal year 1998 include watershed and river systems modeling, 
fisheries management and aquatic ecology, hydroelectric infrastructure 
protection and enhancement, and program support for the Water 
Desalination Research and Development Act of 1996.
    Now, I would like to focus on Reclamation's fiscal year 1998 Budget 
request.
    Starting in fiscal year 1998, the Water and Related Resources 
Appropriation incorporates activities previously funded in the 
Construction Program, General Investigations, and Operations and 
Maintenance appropriations. Each project and program presentation 
describes the work to be done in terms of major program activities. The 
1997 allotment of funds for each project and program is also presented 
in terms of the new structure.
Water and Related Resources
    The fiscal year 1998 budget request of $666 million for the Water 
and Related Resources account funds five program activities. These are 
Facility Operations, Facility Maintenance and Rehabilitation, Water and 
Energy Management and Development, Fish and Wildlife Management and 
Development, and Land Management and Development.
    The request includes $61.2 million for the Central Arizona Project, 
$128.9 million for the Central Valley Project, $24.3 million for the 
Mni Wiconi Project, $10 million for the Mid-Dakota Project, $23.4 
million for the Garrison Project, $32.1 million for Water Reclamation 
and Reuse Projects, and $6 million for the Animas-La Plata Project.
    The fiscal year 1998 request includes $32.1 million for water 
recycling, which includes funding for four projects that were 
authorized by the Congress in 1992. Because the 16 additional projects 
were authorized through Title XVI amendments late in the 104th 
Congressional legislative session, we were unable to consider them in 
our fiscal year 1998 budget formulation process. Reclamation is 
evaluating its water reclamation and reuse program. As part of this 
process we've published a draft white paper and solicited views on 
developing our program through public meetings.
    Our budget request includes several proposals to extend the 
Administration's policy of fully funding the acquisition of capital 
assets to water resource projects and other projects that have been 
funded year-by-year in the past. This initiative is part of an overall 
effort to improve the way the Federal Government manages the planning, 
budgeting, and acquisition of capital assets. Full funding is requested 
for five projects--two would be funded up front and completion of three 
existing projects would be fully funded through a combination of fiscal 
year 1998 funds and advance appropriations.
Facility Operation and Facility Maintenance and Rehabilitation
    Ensuring public safety and protection of the existing 
infrastructure, the delivery of water and power benefits, the 
conservation of natural resources, and the collection of revenues are 
among our highest priorities. The request of $275 million for Facility 
Operation and Facility Maintenance and Rehabilitation funds the direct 
operation, maintenance, and rehabilitation of Reclamation's projects. 
Reclamation's budget request includes funds necessary to help ensure 
the reliability and operational readiness of the facilities at 
Reclamation's projects. Reclamation regularly conducts preventive 
maintenance and performs scheduled minor and major maintenance on a 
recurring basis.
    Some realignment of work has taken place as part of the development 
of the new structure. For example, the Safety of Dams program, formerly 
part of the Construction Program, has been properly moved to the 
Facility Maintenance and Rehabilitation Program. The Safety of Dams 
program, which helps to protect people and property downstream of 
Reclamation dams, continues to be Reclamation's highest priority, with 
a request of $96.1 million, which is included in the $275 million. 
Because of its expertise in the dam safety area, Reclamation also 
assists other Interior agencies with their dam safety programs. An 
independent, outside peer review of Reclamation's Safety of Dams 
program was performed in 1996 to evaluate the program's strengths and 
weaknesses. The report was transmitted to the Congress.
Water and Energy Management and Development Program
    The $287 million request for the Water and Energy Management and 
Development Program funding provides for continued work on major 
projects, a number of smaller projects and programs, and applied 
research activities in the Science and Technology program.
    For major construction projects close to completion, Reclamation is 
committed to seek sufficient funding so that project benefits can be 
realized and repayment of the Federal investment can be initiated. Each 
project is examined to determine if uncompleted portions should be 
either left uncompleted or completed by non-Federal entities. If the 
decision is made to have Reclamation complete the project, funding is 
requested to complete the project as quickly as possible, within 
budgetary constraints. Projects scheduled for completion in fiscal year 
1998 include the Grand Valley Unit, CO; Dolores Project, CO; Colorado 
River Salinity Control Project (Title I), AZ; Umatilla, OR; Brantley 
Project, NM; and Belle Fourche, SD.
Land Management and Development
    The $39.7 million request for Land Management and Development 
provides for Congressionally-mandated activities such as recreation 
management, hazardous materials containment and removal under the 
Comprehensive Environmental Response, Compensation and Liability Act of 
1980, and the Resource Conservation and Recovery Act of 1976, cultural 
resource activities including compliance with the Native American Grave 
and Repatriation Act, and land resource administration.
Fish and Wildlife Management and Development
    The request of $95 million for this category includes funds for 
conservation, enhancement, and restoration of fish and wildlife 
resources. Restoration activities have become an increasingly important 
activity for Reclamation as more species have been added to threatened 
and endangered lists. The request includes $13 million for water 
purchases for the Columbia/Snake River Salmon Recovery Project, $4 
million for fish screens at the Hamilton City Pumping Plant in 
California, and $13.3 million for endangered species recovery and 
habitat restoration in the Platte River Basin and the Colorado River 
Basin.
Central Valley Project Restoration Fund
    The $39.1 million requested for this program will provide for 
habitat restoration, improvement, and acquisition, as well as other 
fish and wildlife restoration activities directed by Title XXXIV of 
Public Law 102-575. That Act provides for comprehensive and coordinated 
actions, while bringing long-term benefits to California's environment 
and economy. The program is financed by revenues from water and power 
users.
    A program to continue acquisition of additional water supplies to 
supplement the quantity of water dedicated to fish and wildlife will 
require $9 million. Another $12.3 million is requested for programs to 
restore declining populations of anadromous fish, to avoid loss of 
juvenile fish resulting from unscreened or inadequately screened 
diversions, and to assess and monitor the effectiveness of various fish 
and wildlife restoration activities. Improvements costing $6 million, 
including $2 million from Water and Related Resources, will be made to 
the Coleman National Fish Hatchery, in coordination with the U.S. Fish 
and Wildlife Service.
California Bay-Delta Ecosystem Restoration
    Reclamation's request includes $143.3 million for a proposed new 
program to implement the California Bay-Delta Environmental Enhancement 
and Water Security Act passed by the 104th Congress. Although requested 
by Reclamation, these funds will be distributed to Federal agencies 
participating in a consortium of Federal and State agencies known as 
CALFED. The agencies have management and regulatory responsibilities in 
the Bay-Delta area of California. Distribution of these funds will be 
made based on a program recommended by the CALFED group with 
substantial stakeholder involvement and approved by the Secretary of 
the Interior after consultation with other participating agencies. The 
funds have been requested in one account under the Reclamation budget 
as a way to manage ecosystem restoration and because Reclamation has 
experience in administering large projects.
Loan Program
    Five ongoing loans, the Chino Basin Desalination Project, Temescal 
Valley Project, Castroville Irrigation Water Supply Project, Salinas 
Valley Water Reclamation, and Milltown Hill Project-Douglas County 
Oregon, are included in the $10.5 million request. San Sevaine Creek 
Water Project/San Bernardino County, is included as a ``grandfathered'' 
loan. These loans concentrate on better utilizing water supplies 
through reclamation and reuse.
Policy and Administration
    The $47.6 million request funds overall program policy management; 
personnel and equal employment opportunity; safety and health 
management; budgetary policy formulation; information resources 
management; procurement and property policy; public affairs 
coordination; and organizational and management analysis.
    Finally, Mr. Chairman, I am advised that the Central Arizona Water 
Conservation District (CAWCD) has expressed concern about Reclamation's 
fiscal year 1998 budget request for the Central Arizona Project and has 
recommended reductions. Reclamation is proud of its of its role in 
overseeing the investment of $3.2 billion through fiscal year 1996 in 
moving this project into an operating status. The major portion of the 
complex task of constructing the multi-faceted CAP has been 
accomplished, and project facilities are providing many of the intended 
water, power, flood control, fish and wildlife, and recreation benefits 
to the citizens of Arizona.
    CAWCD is responsible for the repayment of the Federal investment 
allocated to the commercial power function and to water deliveries to 
the municipal, industrial and non-Indian agriculture. However 
Reclamation has broader responsibilities to Native Americans, to the 
citizens of Arizona, to the taxpayers that invested in the project, and 
to meeting Congressional directives. Included among those 
responsibilities are the delivery of project water to Indians, 
providing flood control, protection of fish and wildlife, development 
of recreation, and orderly completion of the project. The President's 
$61.2 million request for fiscal year 1998 represents the most cost-
effective way to discharge these responsibilities. This level of 
funding would support scheduled work and pursuit of contractor claims 
and would avoid deferrals of necessary project activities. We would be 
pleased to discuss specifics with the Committee.
    Mr. Chairman and Members of the Subcommittee, this concludes my 
prepared remarks. I would be happy to respond to any questions Members 
may have concerning the Reclamation program and our fiscal year 1998 
Budget request.

    Senator Domenici. Thank you very much, Commissioner. Madame 
Secretary, you have a statement besides the one you gave us?
    Ms. Beneke. Yes; I do.
    Senator Domenici. I am not as certain as you are that we 
are going to be able to fund the new initiatives and some of 
those projects to the extent requested. As you know, this 
subcommittee has not been getting large allocations lately for 
nondefense discretionary programs like the Bureau and the 
Corps. So, we are under constant pressure.

                           water development

    I am a little concerned as to both of the entities, the 
Corps and the Bureau, that it looks like under this 
administration we are moving rapidly away from any new 
development--traditional projects and more in the direction of 
the ecosystem restoration and environmental projects. I have 
nothing against the latter, but it does seem to me that there 
are still some water supply or flood control projects that are 
needed in this country. So, we will be looking to try to create 
a little bit more balance in our appropriations than I believe 
is in the President's budget. I do not expect either of you to 
comment.

                        animas-La Plata project

    I want to talk about two or three subjects that are 
important. First, let me talk about the Animas-La Plata 
project. I am fully aware that we take one step forward and two 
back on this project about every year that it is delayed. I 
wonder if you have any information about the impact of 
canceling Animas-La Plata on Indian water rights in New Mexico, 
particularly Navaho Indian water rights, and more specifically 
for their Navaho irrigation project to which we have committed 
100,000 acre-feet of water.
    I have heard from some water experts that cancellation of 
Animas-La Plata projects could indeed have an effect of 
dramatically reducing the commitment to New Mexico from the San 
Juan-Chama diversion. That if, in fact, this project is 
canceled and nothing done in its stead that will perfect the 
water rights that should have gone to the Navaho Indians in the 
State of New Mexico, that obviously there will be a reduction 
of all of those because the water rights of the two tribes in 
Colorado will have to be vested, and I would think that is a 
much bigger problem than has been spoken of by those who would 
like to see Animas-La Plata canceled. Are you aware of those 
different contentions, and does it concern the Bureau and the 
Department if those are real possibilities or probabilities?
    Mr. Martinez. Mr. Chairman, let me try to answer that 
question this way. From my perspective there are two issues if, 
in fact, Animas-La Plata is deauthorized and canceled. One is, 
the project is contemplated to provide distribution systems and 
storage to deliver water both in Colorado and New Mexico to 
Indian and non-Indian entities. To the extent that the project 
is not completed, those entities will have to look for other 
facilities to either divert or impound water.
    With respect to water right issues, the Indian Water Rights 
Settlement Act for the Ute tribes settles rights on the Animas-
La Plata project. To the extent that the project is not 
completed and the Indian Water Rights Settlement is not 
consummated, and if the Indians go back into court and are 
successful in obtaining larger quantities of water with earlier 
priorities, it might impact the water rights available both in 
Colorado and New Mexico to existing users. That could impact 
the contract for San Juan-Chama water ultimately, as well as 
users in New Mexico and Colorado.
    Senator Domenici. I know this is a little more difficult, 
but has the Department done any evaluation as to what this 
means in terms of quantities, or are we just talking 
generalities at this point?
    Mr. Martinez. I think it would depend on if the Indian 
tribes resort to litigation. We would have to wait to see what 
the courts would determine would be the Indian rights in order 
to make an assessment of what the impact would be to our 
contractors, but let me say there would be an impact.
    Senator Domenici. Commissioner, let me say I am going to 
yield to Senator Murray, who has to be somewhere else. I assume 
she wants to make a statement now.

                       STATEMENT OF PATTY MURRAY

    Senator Murray. Actually, Mr. Chairman, I really appreciate 
the accommodation. I do have to be at the White House in just a 
few minutes, but I do want to submit some questions for the 
record, particularly for the Corps on some turbine outage 
issues and some cost concerns I had. But I also want to just 
have the opportunity to thank the Bureau of Reclamation for 
their excellent response to my question regarding pesticide 
applications and notification procedures, and would like to 
continue to work with you on that as we proceed. I just wanted 
to personally say thank you for that response.
    Senator Domenici. Senator, are these your questions you 
would like submitted?
    Senator Murray. Yes, indeed.
    Thank you.

                      STATEMENT OF BYRON L. DORGAN

    Senator Domenici. Senator, it is great to have you here. 
How are you feeling?
    Senator Dorgan. I am fine.
    Senator Domenici. All right. The disaster has not affected 
you yet?
    Senator Dorgan. Mr. Chairman, I was in a boat that ran over 
a car yesterday, which tells you where the water level is. Mr. 
Chairman, I appreciate very much the opportunity to be here. I 
am supposed to be at a meeting with the President at 10:15. I 
was hoping--it will not interrupt this--I was hoping perhaps at 
some appropriate point before I have to leave I could make a 
comment about the immediate flooding and also a couple of other 
things I am going to put in a statement that I will leave with 
the committee.
    Senator Domenici. I would like to go ahead and yield to you 
now. I have set a schedule where I am going to until about 
10:45, then go to the closed session, and if I am not finished 
I will come back for a little while after that. If you want to 
check in, you might want to come back later. But proceed at 
this point, please.
    Senator Dorgan. Mr. Chairman, thank you very much. I just 
returned from North Dakota late last evening to be here for the 
votes today. Obviously, the flooding in the Red River Valley 
area of North Dakota is a 500-year flood. It is very severe, 
and it has been an enormous flood-fighting effort in our State 
and our region. It is going to require the attention of 
appropriators. Obviously the President has sent recommendations 
to us in the supplemental, and I expect it will require the 
attention of appropriators as well when we begin putting 
together the appropriations bill for the next fiscal year.
    I will not give you a report here, but it is very serious. 
I have never been in a boat in the middle of a town of 50,000 
people where no one is home. The entire community is evacuated, 
an entire block of buildings has burned down. It is truly a 
disaster of significant proportions. And it is not just that 
town, it is east Grand Forks, MN, Ada, MN, and others.

                       water level at devils lake

    Mr. Chairman, I am going to leave a statement for the 
record on a range of water issues that are very important to us 
in North Dakota. I want to mention one additional issue to the 
crisis that now exists in the Red River Valley, and it is 
related to it in a different way. We are expecting within 
minutes a new projection on the water level at Devils Lake, ND. 
It is a lake that has increased 16 feet in 3 years. It 
literally threatens to inundate a town of 8,000 people called 
Devils Lake. We just had a projection that was very ominous. 
There are projections now scheduled to be released this morning 
which we think are going to portray more bad news. This is an 
extraordinarily serious problem as well, and it comes from the 
same set of circumstances. The most recent projections result 
from the fact that in the last 3 months we have had 3 years' 
worth of snow in North Dakota.
    But this problem has been developing for a number of years, 
and the President has made recommendations in his supplemental 
that are enormously important to us, and we are going to be 
visiting with you about them later today on the floor.
    Senator Domenici. Senator, I hope we can visit in the 
office. I have studied the issue, and it needs more time. I 
think I have to talk over some issues with you.
    Senator Dorgan. We are most anxious to do that. We are 
trying to get time with you, Senator Stevens, Senator Byrd, 
Senator Reid, and others. I will appreciate very much your 
attention to it. You and your staff have been interested and 
have studied it. I talked to your staff yesterday. I will leave 
a statement for the record. We have several people who are 
attending this hearing from the city of Devils Lake and who are 
also anxious about what we might hear in the next hours about 
increased flood projections on Devils Lake, ND.

                           prepared statement

    Mr. Chairman, with that, I appreciate your letting me 
interrupt. I will leave a statement, and look forward to the 
meetings we will hopefully have later today and/or tomorrow on 
a more extended basis about Devils Lake and also the Red River 
Valley flooding.
    [The statement follows:]

             Prepared Statement of Senator Byron L. Dorgan

    Mr. Chairman and Committee Members: As you know, the management of 
North Dakota's water resources is an essential part of North Dakota's 
future. It is the key issue in the minds of North Dakotans today. The 
Corps of Engineers and the Bureau of Reclamation play integral roles in 
that future as well. The Bureau of Reclamation is primarily responsible 
for the development of the Garrison Diversion Project. The Corps is 
playing a critical role in ongoing efforts to cope with a near 
millennial flood in the Red River Valley. It is directly involved in 
helping to prevent devastating flooding in the Devils Lake Basin and to 
promote long-term water control management in Lake Sakakawea, the 
Missouri River, and the Red River Valley.
Flood Prevention and Water Management
    The Corps of Engineers plays a key role in the development of North 
Dakota's water resources and dealing with North Dakota's water 
problems. The needs for this aid have become dramatically apparent in 
the recent flooding in the Red River Valley and the Devils Lake Basin.
    The Red River Valley is currently experiencing some of the worst 
flooding in our history. The devastation caused to the towns of Grand 
Forks, Fargo, Drayton, Pembina and Grafton to name a few can hardly be 
overstated. The Corps needs to make a long term commitment to bring 
these areas back to life through the reconstruction of water control 
structures. I expect to work closely with the Corps to develop and 
implement such a long term strategy in the future. One program 
currently in place is the Technical Resource Service. I am asking for a 
modest outlay of $200,000 to help begin the planning process for the 
recovery of the Red River Valley. But the larger challenge is to 
implement a long-term strategy for flood management in the Red River 
Valley. This is, of course, a small part of the overall recovery plan 
that may eventually run into the billions of dollars.
Garrison Diversion
    Garrison Diversion is the backbone of the state's water development 
activities. It is a multi-purpose water project, but it is more. It 
incorporates much of our plans for improved water supplies across all 
of North Dakota, and with those plans, our hopes for long-term economic 
development.
    Despite the images of rampant flooding, the climate of much of 
North Dakota is semi-arid. In many parts of the state, including 
several of our largest cities, both surface and ground water is 
inadequate in quantity and often in quality as well. By far, the major 
source of quality surface water in North Dakota is the Missouri River. 
That means an adequate supply of good water for North Dakota involves 
moving Missouri River water to many other parts of the state.
    We are asking today for an increase in the appropriation for the 
Garrison Diversion project from the administrations request of $20.4 
million to $27.5 million. This funding level is both appropriate and 
essential given the federal government's unfulfilled commitment to the 
project. The increased funds will go toward development of the 
Southwest Pipeline, the North Valley/Walhalla water system, and the 
Oakes Test Area.
Devils Lake Stabilization
    The Corps is further tasked with the prevention of further flood 
damage in the Devils Lake Basin. The city of Devils Lake and 
surrounding communities, as well as agricultural producers, have 
suffered immensely as the lake has risen 16 feet and doubled in size in 
the last three years inflicting almost $100 million dollars in damages 
and counting. The Corps has played an indispensable role in providing 
technical assistance and planning for additional diking, protection of 
city resources, and the Emergency Outlet Plan for the lake.
    The immediate challenge is to prevent the inundation of Devils 
Lake, a city of 8,000 people. A key component of this plan is to build 
an emergency outlet as outlined in the President's emergency 
supplemental request. I urge my colleagues to support $32 million in 
funding for this essential emergency flood fighting tool. It is a 
reasonable, cost-effective, and environmentally sound measure.
    In addition the Corps is moving forward with a Devils Lake 
Stabilization Feasibility Study which will be essential in the 
development of the Devils Lake area. I recommend support of the budget 
request.
                       missouri river management
    Finally, the Corps of Engineers is primarily responsible for the 
maintenance of the Missouri River. The Corps is in the process of 
developing its revised Missouri River Master Manual, perhaps the most 
important document in setting forth the policies and practices that 
will affect the surrounding communities use and development of the 
river. Since the Garrison Dam was constructed, there has been a 
considerable increase in the problems experienced by those upstream 
from the dam.
    Upstream, there has been a consistent problem with siltation and 
the destruction of surrounding agricultural lands. The Buford/Trenton 
irrigation district is a case in point. The irrigation district has 
suffered consistent erosion around its pumping plant intake. In order 
to mitigate this problem the Corps has developed a plan which would 
include the construction of a jetty to prevent further erosion and 
siltation around the intake. Last year, $750,000 was appropriated for 
the project. I was informed by the administration that this amount 
would be inadequate and a further $750,000 would be needed to finish 
the project. I ask my colleagues to add $750,000 so that construction 
can proceed.
    A related problem at the Buford/Trenton site is the problem of 
consistent inundation of valuable agricultural lands due to rising 
water levels at Lake Sakakawea. The impact of ice flows and seepage 
within these areas has resulted in the loss of millions of dollars 
annually to the local community and is directly attributable to the 
construction of the dam making the federal government primarily 
responsible for damages. The 1996 Water Resources Development Act 
authorized the purchase of flowage easements within the area. The Corps 
has informed me that it is in the process of developing a real estate 
memorandum and will be able to purchase $5 million in flowage easements 
in fiscal year 1998. There is a great need within the community for 
some relief from the consistent floods that have made their land 
virtually unusable, especially for the high-value crops. Adding $5 
million to the fiscal year 1998 budget will begin to address this need.
    Mr. Chairman, the needs of North Dakota's water users are great. 
The responsibility of the federal government to the people of North 
Dakota is also great. I strongly urge you to strongly consider the 
needs of North Dakota and the essential work on the projects I have 
outlined. Once again, the key concerns are: (1) immediate and long term 
flood prevention in the Red River Valley, (2) development and 
completion of the Garrison Diversion Project, and (3) emergency flood 
prevention and long-term stabilization of the Devils Lake Basin.

    Senator Domenici. Senator, let me just say a lot of that 
emergency money will come through this subcommittee, and we 
have already set about to look at it. Frankly, we had assumed 
that there was more funding needed than the President's request 
for the overall problem, part of which is your area. The 
supplemental with reference to the need to repair the damage 
and to do some things that will prevent that part, we already 
have contemplated that at a level that I am certain is 
commensurate with the nature of the problem and consistent with 
what we generally do as Americans when we have this kind of 
problem.
    We have looked at it from a different vantage point, and we 
would like very much to share with you whether we think it is 
imminent or whether we think it can be put off for a time while 
other things are done, but I am totally aware of your interest 
and of the precarious nature of the situation. I would hope you 
would work with us to make sure that I have every bit of 
information that you have, and that you have every bit that I 
have, so that we can work together.
    It ought to come out of this committee. We should not have 
to have it thrust upon us by another committee if it is right. 
And if it is not right, we ought to make that decision too.
    Thank you very, very much.
    Senator Dorgan. Mr. Chairman, let me make one additional 
point. I expect the President will be requesting additional 
money, perhaps today. You are quite correct that the numbers 
that we have seen so far will not meet the challenge of the 
magnitude of this disaster in the region itself. I fully expect 
that additional requests will be coming, perhaps even today.
    Senator Domenici. I do not want to leave the impression 
that this subcommittee has all disaster relief. We do not have 
FEMA, which is a very big player and component. I am going to 
ask, since I have to be here for however long we are here, if 
Senator Craig would like to make a few comments, and then I 
will finish my questioning. Senator, would you like to make 
some, either one, or questions, whichever you prefer. Senator 
Craig, would you proceed.

                      STATEMENT OF LARRY E. CRAIG

    Senator Craig. I will be brief, and then I can come back 
with questions, because I had planned to stay here until we 
leave, Mr. Chairman, for the closed session of the Senate. Let 
me say to my colleague that I think all of us have watched with 
amazement at what has gone on in your State. We have had, in 
Idaho, substantial flooding incidents in the last 2 years, but 
the scope and the magnitude of this one--we have had 100-year 
floods, so I am now a firm believer of the line on the map that 
says this is the 100-year floodplain, but I am amazed that you 
folks are looking at a 500-year level.
    The good news, interestingly enough, I was amazed at the 
marvelous optimism of we Americans, but apparently it crested 
in the beleaguered city of Grand Forks yesterday or late last 
night. This morning it had dropped an inch or two, and on 
television folks out your way were talking with great optimism 
again, and I thought how marvelous and remarkable that all is. 
I am sure that this Congress will respond and help--we must.

                        animas-la plata project

    Patty, it is good to see you again. I enjoyed working with 
you on the Energy Committee, and we are pleased to have you 
with us today. I walked in just as the chairman was asking 
about the Animas-La Plata project and the concerns that we have 
for that. That is an issue that I have worked with my 
colleagues from Colorado with for a good long while, starting 
over in the House when Ben Nighthorse Campbell and I teamed up 
in the House Interior Committee to get that issue authorized. I 
know that it has taken different shapes and forms over the last 
good number of years, but I would hope that there still remains 
a firm commitment to participate and resolve the water right 
issues. I understand that at a meeting last June in the 
Secretary's office were supporters of the project who sought a 
secretarial decree to participate in what is now known as the 
Romer-Schoettler process. The Secretary told the group, which 
included the director of the Colorado Department of Natural 
Resources and the two tribal chairmen, that he knew any 
solution had to involve a structure or a storage facility. Is 
the Secretary still committed to that, to your knowledge?
    Ms. Beneke. The Secretary is committed to this process, the 
Romer-Schoettler process. We have been participating in the 
process, providing support, information, and technical 
assistance. We are very hopeful that this process will yield a 
broadly based consensus solution to the project. We know that 
there has been a lot of controversy associated with the 
project, but again we are hopeful that Governor Romer and Lt. 
Gov. Gail Schoettler can bring all of the interests together in 
Colorado for a consensus-based solution.
    Senator Craig. I know when we first authorized this 
project, the intent was not to share existing water, but to 
multiply it in the basin by storage. I have to think that if 
that is possible, that remains an important part of that. Well, 
anyway, that is Colorado, but I did want you to understand that 
I remain supportive of that issue and will continue to.

                   bear river and bear lake drainage

    Patty, I am very concerned with the situation that exists 
in the Bear River and Bear Lake drainage as it relates to water 
quality. This is a unique drainage in the sense that it 
involves three States. It is very seldom you find a river that 
starts in one State, runs into another and another, and then 
back into the State from which it started, but that is the 
character of this unique river down in southeastern Idaho and 
Wyoming and Utah. It is a drainage that has its problems right 
now based on the Clean Water Act, and wants to solve those 
problems. I have tried to work with them in defining those 
problems and bringing some solution, and I must say that there 
has been full participation to date by the Federal agencies 
involved.
    The point is that we are now into the process and I guess 
my concern, and what I had hoped is that we could be assured of 
full cooperation from you and the Bureau to work with us to 
find a solution and finding mechanisms to address the solution.
    Ms. Beneke. Well, Senator, I am not personally familiar 
with that situation. It is something I would be happy to look 
into, and certainly we would like to work with you and with the 
folks out there to try to find a solution.
    Senator Craig. I did not expect you to be familiar with it, 
and that is why I raised the issue. I say that because several 
years ago I asked all the interested parties, including the 
commission of the Bear River and the States involved and the 
interested groups, to form a task force. They have done so, and 
they are funding that and working with it. We have helped them 
get some resources, and will continue to do that, but I must 
say that it appears to me that everyone is at the table and 
there are solutions to the problem of this resource and we 
ought to work hard at doing that.

                 western water policy review commission

    Mr. Chairman, another question. Patty, the Bureau of 
Reclamation budget request under environmental and interagency 
coordinated activities you have requested about $1.665 million. 
In that activity you propose to continue the Western Water 
Policy Review Commission. That authorization runs out this 
year. I guess I have two questions. First, how much of this 
request, of the $1.6 million, is allocated to the commission? 
And second, does the administration intend to seek a 
reauthorization of the commission?
    Ms. Beneke. I need to be corrected if I am wrong here, but 
my understanding is that there is not funding included in our 
budget request for the commission.
    Senator Craig. There is not at this time?
    Ms. Beneke. That $1.665 million does not include funds for 
the commission, but the commission's work will be near to 
completion by the end of this fiscal year, as I understand it. 
However, they would like to have an opportunity to put their 
report out for public comment. So for that reason there may be 
some delay in getting the report up to the Congress. We are 
inclined to agree that it makes sense for it to go out for 
public comment. Again, I do not believe that any of the funding 
appears in this $1.665 million.
    Senator Craig. And, therefore, it would not be your intent 
to reauthorize the commission?
    Ms. Beneke. Correct.
    Senator Craig. Thank you. Thank you, Mr. Chairman.
    Senator Domenici. Senator Bennett.

                     STATEMENT OF ROBERT F. BENNETT

    Senator Bennett. Thank you, Mr. Chairman. I apologize that 
I have two subcommittees meeting simultaneously, and I will 
have to leave, but I wanted to come down and say some nice 
things about Patty Beneke and the work that she is doing with 
my office and with Ron Johnston the Utah administrator of the 
central Utah project. They are working very hard to try to 
complete the central Utah project. As I say that, I have a 
little bit of a sense of incredulity, complete the central Utah 
project. When I was here as a Senate intern in the early 
1950's, the Senator from Utah who sat in this seat who had the 
same name I do, my father, was working to try to complete the 
central Utah project. It has been going on for over 40 years. 
But I wanted to pay public tribute to Patty Beneke and Ron 
Johnston, and thank them, and thank you directly, Patty, for 
the excellent working relationship that you have with our 
office.
    Ms. Beneke. Thank you, Senator.
    Senator Bennett. Now, I understand on the first of May 
Secretary Babbitt will come before the Interior Appropriations 
Subcommittee, on which I also sit, and at that time I intend to 
raise some questions about the Endangered Species Act and how 
that act may be used to try to frustrate the progress on water 
development in Utah. I am hoping we can get closure to the 
water and land use issues out there. The fact that the 
Endangered Species Act is being used as a tool to try to 
threaten those projects, projects that have already received 
approval and are going forward, concerns me a great deal. So, I 
wanted to kind of give you the heads up on that.
    Finally, Mr. Chairman, I have a formal question that I 
would like to submit to the record and to Ms. Beneke to have 
her respond to on the record, if I could do that.
    Senator Domenici. If your staff will give it to our staff, 
we will be pleased to get it done.
    Senator Bennett. Here it is. With that, I apologize, but I 
have to be excused.

                        animas-la plata project

    Senator Domenici. Thank you very much. I want to follow up 
just a moment and ask the two Senators if they might just 
listen to this just for a moment, and then we will proceed to 
questions and go as rapidly as we can. You were not here, 
Senator Bennett, when the Commissioner of the Bureau of 
Reclamation indicated that if the Animas-La Plata project is 
canceled and something is not offered in its place, that it is 
entirely possible that not only the new water that was going to 
be preserved for the area would be affected, but that the 
Navajo irrigation project my be impacted as well. The Navajo 
agreement committed 100,000 acre-feet to the Navajos, of which 
they have 70,000, 60,000 under irrigation. Not only that would 
be in jeopardy, but the allocation for the city of Albuquerque 
as well. Years ago, a solemn pact was entered into between the 
city of Albuquerque and many communities up and down the Rio 
Grande in New Mexico for an allocation of water that was going 
to be diverted from the San Juan-Chama project across the 
mountains to provide water to Albuquerque. In fact, Albuquerque 
relies on it for its future water.
    That was Senator Clinton P. Anderson's tiny, tiny piece of 
the Colorado River storage project which has brought billions 
of dollars of resources, growth and water to States other than 
New Mexico. Now we sit at this late stage holding up another 
project, Animas-La Plata, that has the clear possibility of 
canceling significant portions of that water that was allocated 
to New Mexico as part of this big project between our Mountain 
States.
    Now, frankly, I had not looked at it quite that way until 
water experts began to tell me the ultimate consequence of 
this, but I am looking at it precisely as I have described it 
to you. I do not believe it is at all fair, nor can we sit by 
and watch it happen, that New Mexico's tiny, yet vital share, 
of this rather momentous, multi-State project, worth billions 
of dollars, which is accomplishing fantastic things for other 
States, that we sit by and watch our water allocation get 
knocked out because this project cannot proceed.
    Frankly, Senator, I want to say to you, Senator Craig, 
people from my State probably more so than yours are 
participating in this so-called process which the Assistant 
Secretary says her boss supports. We did not hear her say he 
supported building the Animas-La Plata project. That ought to 
be the next question, because he said he does. But that process 
has been busy getting nowhere, and the estimates of my friends 
say it is getting nowhere because the opponents never give 
anything. Meetings are held, project proposals are supposed to 
be put on the table, and instead of getting somewhere, new 
obstacles are raised.
    Senator Bennett. Who are the opponents, Mr. Chairman?
    Senator Domenici. National environmental groups, there is 
just no question. I am not objecting to their participation, 
they ought to. But essentially for the first time we are 
beginning to focus in on what happens when we do these kinds of 
things late in the game as to prior commitments that have been 
made, including to the Navajos who are relatively poor. 
Frankly, I was in attendance when we finally let the water run 
to this irrigation project.
    You know what we were talking about. It has taken 100 years 
to get the water that we promised them in a treaty. We signed a 
treaty and gave them their reservation, and in it it talks 
about water. Almost 100 years to the year after the commitment 
we turned the water spigot, and now that water is in jeopardy. 
To date, we have spent $47 million to do planning and studies. 
It is not like we are neglecting evaluations and environmental 
analysis.

                      fiscal year 1998 new starts

    I want to make one more comment, in case it is slipping by 
anyone. You know, there are no new starts in this budget, one 
demonstration new project in the Bureau's budget other than the 
new ecological programs which are much a combination of 
different things. Do you want to correct that point?
    Mr. Martinez. I believe we have two new projects, Senator. 
We have got the arsenic well head project in Albuquerque, and 
the freeze-thaw project in North Dakota.
    Senator Domenici. How much are those?
    Mr. Martinez. They are very minor projects.

                         flood damage reduction

    Senator Domenici. Now, we have been talking about flood 
damage, and some people are saying maybe we should not build 
any of these flood damage prevention structures, be they dams 
or whatever--you have heard that, have you not?
    Senator Craig. In fact, Mr. Chairman, a conversation out in 
the West now is more often we ought to be tearing them down 
than maintaining them or building anything new.
    Senator Domenici. I received an annual flood damage report 
for fiscal year 1995 from Secretary Lancaster recently, and let 
me tell you what it indicates as to the value of flood damages 
prevented by Corps projects and emergency responses in the year 
of 1995. In 1995, $26.8 billion of damages prevented. That is 
significantly above the $16.2 billion 10-year average for the 
Corps flood prevention projects.
    Now, why do I say this? We are in total sympathy and 
commitment to try to help our fellow Americans experiencing the 
500-year flood up in the Dakotas. So, I think we take for 
granted much of what the Corps of Engineers and the Bureau of 
Reclamation do, in light of $26.8 billion of flood damages 
prevented.
    Senator Craig. Mr. Chairman, my capital city of Boise has 
the Boise River running right down through the middle of it, as 
is typical of so many of our communities. But above that 
capital city are three dams and three reservoir projects. The 
river itself has been controlled and regulated for the last 2 
months, and in the last 2 months--because we had a major flood 
incident in early January in Idaho and the surrounding areas 
there, we got 100-year floods. My hometown had 4 feet of water 
in it. But my point is simply this, because of those three dams 
above Boise, Boise has experienced only very minor local 
flooding. Yet our river authorities, including the Bureau of 
Reclamation, have told me directly that absent those dams and 
the ability to control that river, the city of Boise might have 
looked like Grand Forks, probably not as bad, but clearly there 
would have been millions, tens of millions of dollars' worth of 
damage along that river. It has not occurred.
    I am saying very loudly out in Idaho and trying to repeat 
it as often as I can, if it were not but for those dams, the 
city would be underwater. So our citizens who have not 
witnessed floods for several generations because of these 
structures, and the management and the control of these 
structures, are reminded that in their absence they may have 
lost their homes and their properties. So I think it is very 
important, Mr. Chairman, that you remind us of that and build 
that record, because we are a generation away from severe 
flooding in most instances where it occurred on the 50-year 
cycle or the 100-year cycle. That is why I think some people 
are able to say gee, we ought to start removing dams for other 
reasons, forgetting that they save a lot of property and a lot 
of people's lives.
    Senator Domenici. Thank you, Senator. Commissioner, were 
you through with your thoughts? I kind of stopped and let 
Senator Murray--it seems like a week ago now.

          impacts of deauthorizing the animas-la plata project

    Mr. Martinez. I would be glad to present in writing what 
the impacts of deauthorization of the Animas-La Plata project 
would be on water rights and water uses in New Mexico and 
Colorado.
    Senator Domenici. I have great confidence in your 
integrity, and I do not believe you would give us anything you 
did not believe. If you are prepared to do that and you will be 
permitted to do that, we would like to have it.
    [The information follows:]
   Impact of Deauthorization of the Animas-La Plata Project on Water 
            Rights and Water Uses in New Mexico and Colorado
    The effect of deauthorizing the Animas-La Plata Project is largely 
dependent upon the deauthorizing language. However if one assumes that 
deauthorization of the project will lead to a decision by the Colorado 
Ute Tribes to pursue their water rights by legal means, then I would 
say that any water users that have water rights on the Animas-La Plata 
Rivers that are junior to the date of establishment of the Colorado 
Utes' reservations could have their water rights affected. The effects 
of such an adjudication on other water users in the San Juan Basin are 
largely dependent upon two factors: how the tribes use their water 
rights and how junior water rights holders find means to address their 
own water needs.

    Mr. Martinez. I would like to leave with you the idea that 
I brought up, that there are two issues related to Animas-La 
Plata. One is the infrastructure to allow water to be 
delivered, water that the States have under the Upper Colorado 
River compact. The other one is the Indian water rights 
settlement component. To the extent that the settlement is not 
completed or something put in its place, it could lead to 
extensive litigation and an impact on existing water rights in 
the area.
    Senator Domenici. Right. I assume you are saying that if 
that was settled there could be something different from 
Animas-La Plata that would be able to assuage the rights, but 
there would have to be some kind of storage some place.
    Mr. Martinez. Out of the Romer-Schoettler process could 
come a consensus solution that would address both issues, and I 
am hopeful that that will occur.

                       fiscal year 1998 resources

    Senator Domenici. Thank you. I am going to submit a number 
of questions for your response. I want to make sure that you 
all understand that I am a supporter of the Bureau and I do not 
think you have an extravagant base budget. In fact, your budget 
request is down slightly from the previous year. But I want to 
remind you that in the allocation of resources, the 
subcommittee gets two sources of money, as you remember, 
Secretary Beneke.
    We get Defense money, and it can only be spent for Defense 
purposes, and we get nondefense discretionary spending for 
domestic purposes. It is this pot of money which funds the 
Corps and the Bureau. And frankly, the second pot has been 
squeezed dramatically by the appropriators who allocate the 
money. I am hopeful that will not happen this year, because 
there are so many Senators that are involved in these water 
projects and coastal activities and the like, that maybe they 
can put some pressure on that we get a reasonable allocation. 
But do not be surprised if the amount of money given to this 
subcommittee is insufficient to handle the dollar requests that 
you have made.
    OK, let us take the next witnesses, please. Thank you both. 
Do you have questions of these two witnesses?

                 western water policy review commission

    Senator Craig. I have nothing further. But, Madame 
Secretary, I am looking at your justification sheet as it 
relates to the $1.665 million request, Western Water Policy 
Review Commission, I see that there is a reference to the 
continuation of the western water policy review. We need to 
just double check our sources and yours so that they obviously 
have the money to complete their work.
    Ms. Beneke. We would be glad to do that. Bob Wolf, who is 
our budget officer for Reclamation, says that there is no money 
in 1998. He just reconfirmed it. He says if there is a mention 
in the BOR documents it is erroneous. We will clarify that.
    Senator Craig. Thank you.

               california bay-delta ecosystem restoration

    Ms. Beneke. Mr. Chairman, if I could make just one more 
comment. Because the bay-delta request is a large one, and also 
because the program is an important administration priority, I 
did want to underscore that the bay-delta is a great example of 
a new way of doing business for us. We have tried to do our 
best to break down jurisdictional boundaries between Federal 
agencies. The program is looking for long-term solutions to 
issues raised by the bay-delta, and they are not just 
environmental issues. They are issues relating to water supply, 
issues relating to levee stability, and in addition ecosystem 
and water quality issues.
    The thing that is remarkable about bay-delta is that the 
parties are working on a consensus basis, and they have made 
remarkable progress to date. They are committed to continuing 
to work on a consensus basis, and there has been a fairly 
remarkable partnership all around. I just did want to 
underscore that. I know that the request is large. I am hearing 
what you are saying here today. We would like very much to have 
an opportunity to work with the subcommittee on this and 
provide whatever information you might like.
    Thank you very much.

                     Additional committee questions

    Senator Domenici. Let me just close by saying Senator Craig 
knows, by my various discussions with the Republican Senators, 
and he has been supportive of this position. I do not want to 
make the point he is supportive of every position, but this 
one, that we cannot continue to dramatically reduce 
discretionary spending and expect to have money for projects 
like this. So, we are hopeful that in the grand compromise, 
which has taken enough of my blood and energy that I hope it is 
the last great compromise that I have to be part of, but 
essentially we are trying to get discretionary spending up a 
little so we have money for some of these projects which are 
really the maintenance of some commitments we have made in this 
country.
    Thank you very much.
    [The following questions were not asked at the hearing, but 
were submitted to the Bureau for response subsequent to the 
hearing:]

                Questions Submitted by Senator Domenici

                            animas-la plata
    Question. What is the current status of efforts (the so-called 
Romer/Schoettler Process) to develop an agreeable solution to the 
Animas-La Plata Project, and how likely is it that an agreeable 
solution can be worked out? Could you characterize the willingness of 
the interest groups, both proponents and opponents, to identify common 
ground and work toward a solution?
    Answer. The Romer/Schoettler Process officially got underway in 
October 1996. Since then six formal, publicly attended meetings and 
numerous, less formal discussions have ensued. Since the last public 
meeting on March 16, 1997, Lt. Governor Schoettler has been working 
with both the Citizens' Coalition and the project proponents to 
determine the level and type of support needed for each groups' 
development of an alternative to the project as currently configured. 
These discussions are also expected to establish commitments by these 
two groups regarding when one or more conceptually developed 
alternatives would be ready to be presented to all the parties to the 
Process.
    We do not wish to try to characterize the willingness of the 
Process parties or to speculate on the outcome of the Process; however, 
it is noteworthy that this Process marks the first time the opposing 
parties are meeting face to face to identify and discuss their 
concerns, and attempt to work out their differences. Reclamation 
remains optimistic that continuing a dialogue among the parties can 
yield a solution that represents a broad consensus and addresses the 
economic and environmental issues presented by the project.
    Question. What would be the implications and impacts of walking 
away from the project?
    Answer. Entities in Colorado and New Mexico who may have planned to 
use water from the Animas-La Plata Project would have to formulate 
alternative ways to support their needs. That portion of the Colorado 
Ute Indian Water Rights Final Settlement Agreement, which provides for 
the delivery of water to the Indian tribes from the Animas-La Plata 
Project, would also have to be addressed. The Colorado Utes Indian 
Water Rights Settlement Act gives the Tribes the ability to sue or 
renegotiate Tribal water rights claims if Reclamation has not completed 
certain major project components by January 1, 2000. Even if 
Reclamation started construction this year, it is extremely unlikely 
that this date would be met.
    Question. Have environmental interests been willing to negotiate or 
engage in serious efforts to identify alternatives which would allow 
the use of available depletions under the Endangered Species Act in a 
downsized project?
    Answer. I am advised that the Citizens' Coalition, which includes 
representatives from local and national environmental organizations, is 
an active participant in the Romer/Schoettler Process and is engaged 
along with the other participants in a serious effort to explore a 
range of possible alternatives.
    Question. Ms. Beneke, if it is unlikely that a compromise can be 
worked out with environmental interests, why should the Bureau of 
Reclamation continue to spend money to evaluate alternatives, perform 
environmental and cultural activities, and other activities related to 
the project?
    Answer. We are hopeful that a broad consensus can be reached soon. 
Reclamation's current work including environmental and cultural 
activities reflects actions necessary to proceed with the Animas-La 
Plata Project as directed by Congress. We have modified our approach 
only by what is necessary to maintain the integrity of the Romer/
Schoettler Process. We are prepared to spend funds in fiscal year 1998 
to evaluate alternatives, as necessary. As the stakeholders endeavor to 
reach an agreement we expect it will become necessary to provide 
support for evaluation of alternatives.
    Question. How much has been expended on the Animas-La Plata project 
to date? Of this amount how much has been spent on resolving 
environmental and endangered species issues?
    Answer. Slightly more than $61 million has been expended on the 
Project, which was initially conceived and planned prior to passage of 
environmental legislation such as the National Environmental Policy 
Act, the Clean Water Act, the Endangered Species Act, and the National 
Historic Preservation Act. This amount includes about $18 million to 
address environmental issues, which include endangered species issues. 
This is an approximate value as it is very difficult to separate 
environmental issues from standard project planning and design 
activities.
    Question. How long would it take to terminate all activities 
related to the Animas-La Plata project, and how much would it cost?
    Answer. It would take approximately 12 months and $1 million to 
terminate all activities related to the Animas-La Plata Project. These 
figures include contract terminations, land disposals, concluding 
reports and costs associated with resulting personnel reductions. This 
figure does not include costs associated with renegotiation of the 
Colorado Ute Indian Tribes' water rights settlement.
          california bay-delta ecosystem restoration (calfed)
    Question. The President's budget includes a request for $143 
million to initiate the California Bay-Delta Ecosystem Restoration 
program in 1998. The authorization which was inserted into the Omnibus 
Continuing Resolution late last year totals $429 million over three 
years. This program is over and above a base program of $70 million 
which has been funded primarily through the Bureau of Reclamation. The 
base program has increased from $20 million in 1993 to a high of $77 
million in 1996. By the end of this fiscal year, over $280 million will 
have been spent on Bay-Delta activities. At the end of this 
authorization, and assuming the base program is funded at about $70 
million per year for the next 3 years, over $900 million will have been 
spent on Bay-Delta restoration activities by the end of the year 2000-- 
and this is federal spending.
    How much of the $143 million request for fiscal year 1998 will 
actually be spent?
    Answer. The request for $143.3 million is for higher priority 
activities that should be undertaken in fiscal year 1998. All such 
``early implementation'' projects must (1) have a lead agency, (2) have 
adequate project specific environmental documentation, (3) not 
prejudice the ultimate CALFED decision, and (4) be reviewed through a 
stakeholder ``roundtable process''. The process is underway and we 
anticipate specific projects will be selected in time to allow 
obligation of the $143.3 million in fiscal year 1998.
    Question. Will the work envisioned under this authorization 
complete the Bay-Delta restoration work?
    Answer. Based on estimates provided by CALFED, the requested 
appropriation for $143.3 million for fiscal year 1998 would be 
approximately 5 to 10 percent of the current total estimates for the 
overall ecosystem restoration program costs.
    Question. What is the estimated cost and how long will it take to 
accomplish the restoration work?
    Answer. Based on estimates provided by CALFED, the capital costs of 
the alternatives to address CALFED's overall objectives (ecosystem 
health, water quality, water supply reliability, and levee system 
integrity problems) are in the range of $4 to $8 billion, with 
implementation of the preferred alternative taking between 20 and 30 
years. The ecosystem restoration component is still being developed but 
their preliminary estimates show costs of approximately $2 billion, 
over 10 to 20 years. This total will be subject to cost-sharing.
    Question. Can you give the Committee an estimated completion date 
for this program?
    Answer. The program is designed to repair the environmental decline 
of the Bay-Delta, a long-term problem that has developed over the past 
150 years. The completion date for all aspects of the Bay-Delta Program 
may take 20 years or longer to implement.
    Question. Have detailed technical analysis of alternatives and 
preparation of some sort of an Environmental Impact Statement been 
completed? If not, when do you expect those to be finished?
    Answer. CALFED has adopted a three-phase approach to identify 
problems, propose solutions, analyze environmental implications, and 
devise a long-range plan to protect and enhance the Bay-Delta system. 
During Phase I, the Program developed a clear definition of the 
problems and issues associated with the Bay-Delta and identified three 
alternative solutions. It involved a collaborative process to consider 
all reasonable options for addressing Bay-Delta problems related to 
fish and wildlife, water supply, water quality, and levee and channel 
vulnerability. The process was aided by a significant amount of public 
participation. Phase I concluded in September 1996.
    In Phase II, the Program is conducting a broad environmental review 
of the three alternatives identified in Phase I to explore their 
various potential impacts. The full implications associated with each 
alternative will be considered, including feasibility, cost and 
benefits. Phase II will produce a programmatic Environmental Impact 
Statement/Environmental Impact Report in compliance with National 
Environmental Policy Act and the California Environmental Quality Act. 
The programmatic EIS/EIR will focus on the broad policy and resource 
allocation decisions required to implement a program. The primary 
purpose of this document will be to inform decision-makers about the 
inter-related and cumulative consequences of the alternatives and to 
recommend a program alternative for implementation. This programmatic 
EIS/EIR is currently scheduled to be completed in late fiscal year 
1998. Projects funded in advance of the final programmatic EIS/EIR will 
have site-specific environmental documentation.
    During Phase III, the final phase, the Program will prepare 
project-specific environmental documents for each element of the 
selected alternatives. The strategies analyzed during Phase III could 
be operational, structural, regulatory and/or legislative in nature. 
Final approval of the environmental documents paves the way for 
implementation. The permit approvals process will also begin in Phase 
III.
    Question. Why are baseline activities being continued in light of 
this large new initiative?
    Answer. The CALFED effort is building upon an existing framework of 
Federal responsibilities to achieve a long-term solution. The 
important, ongoing Federal activities, which constitute the 
``baseline,'' support and are an essential component of the larger new 
initiative. The Congress specifically recognized this institutional 
arrangement in the 1996 California Bay-Delta Environmental Enhancement 
and Water Security Act by authorizing $143.3 million annually, for 
three years, in addition to the baseline funding level. Such additional 
funding is needed because baseline efforts alone were not sufficient to 
stem the decline of the Bay-Delta.
    Question. Provide for the record a detailed breakout showing the 
annual funding of those programs which make up baseline spending from 
1993 through 1998.
    Answer. Details on the baseline spending are being provided to the 
Subcommittee in the attached report to Congress, from Franklin Raines, 
on Federal spending on the environmental restoration of California's 
Bay-Delta region.
    Question. Why is it necessary to have both the Central Valley 
Project Improvement Act and the Bay-Delta program?
    Answer. Congress authorized the 1992 Central Valley Project 
Improvement Act, CVPIA to mitigate for Federal actions related to the 
construction and operation of the Bureau of Reclamation's Central 
Valley Project, which harmed California fish and wildlife populations 
over the past half century. The CVPIA authorizes actions that will be 
needed if the more comprehensive CALFED effort is to succeed and meshes 
well with that effort. The CVPIA mitigates adverse impacts by funding 
activities designed to restore certain fish and wildlife populations 
throughout the Central Valley. The Bay-Delta Program has a related but 
different focus--the need to restore the underlying health of the most 
critical part of the Central Valley ecosystem.
    For example, the CVPIA specifically directs the Secretary of the 
Interior to improve conditions for anadromous fish, such as chinook 
salmon, steelhead trout, sturgeon, striped bass, and American shad. The 
Bay-Delta Program will work to improve conditions not only for these 
fish, but also for other native species such as the delta smelt, a 
species listed under the Endangered Species Act, splittail, other 
aquatic and terrestrial species, and riparian plants that inhabit the 
Delta. Under the CVPIA, Federal efforts include work to restore areas 
of the Central Valley that are located well upstream of the Bay-Delta, 
by providing water and additional habitat for wildlife refuges. 
Finally, the CALFED Program will improve conveyance facilities in the 
Delta and examine whether building additional storage facilities would 
assist restoration efforts.
    Question. Could savings be realized if the two were consolidated 
into one?
    Answer. Each program is necessary and each has differing, but 
complementary areas of emphasis. For example, the CVPIA may place 
higher effort on restoration of rivers upstream of the Delta and refuge 
needs within the Central Valley, while the Bay-Delta Program will place 
its major effort on improved conveyance facilities and restoration of 
ecological processes, habitat, and species in the Delta. Cost savings 
can be accrued through close coordination of each program rather than 
consolidating the two very different programs. Together, the two 
programs provide the policy, management, and technical depth and 
breadth needed for successful resolution of conflicts in the system 
between water management and ecosystem health.
    Question. Since several agencies are not party to the Bay-Delta 
accord, what authority do they have to spend appropriations made 
available through the new authorization?
    Answer. Several federal agencies such as the Army Corps of 
Engineers and Department of Agriculture, not signatory to the 1994 Bay-
Delta Accord, have since then become active participants in the CALFED 
Bay-Delta Program. The federal ecosystem directorate, ClubFed, is 
currently working to formalize these agencies' involvement because they 
play essential roles in formulating and implementing long-term 
alternatives. When agencies formally sign the inter-departmental MOU, 
they will be eligible to receive funding under this authorization. Once 
these Federal agencies have become participants in the Program, the 
broad authorization of section 102(d) of the 1996 California Bay-Delta 
Environmental Enhancement and Water Security Act would apply: ``To the 
extent not otherwise authorized, those agencies and departments that, 
currently or subsequently, become participants in the CALFED Bay-Delta 
Program are hereby authorized to undertake the activities and programs 
for which Federal cost sharing is provided by this section.''
    Question. Like most programs of this type, there will surely be 
more projects than available resources. How will competing projects and 
activities be evaluated to insure only those projects which will have 
the greatest impact on restoration of the Bay-Delta environment are 
funded?
    Answer. Early each year, the CALFED technical staff will develop 
sets of implementation projects and programs to be considered for 
funding. A list of projects recommended for funding will go to the 
Ecosystem Roundtable, along with CALFED Management, for review and 
discussion. The Ecosystem Roundtable is chartered by the Bay-Delta 
Advisory Council and subject to the Federal Advisory Committee Act. Its 
members were appointed to provide stakeholder input into the process of 
priority setting and project selection. Its mission is to provide 
advice on development of an annual integrated planning process for 
restoration project selection and on integration and coordination with 
existing State and Federal restoration programs to increase overall 
restoration effectiveness. The Roundtable will review an annual work 
plan to be approved by CALFED Management.
                                 ______
                                 
                     Letter From Franklin D. Raines
                 Executive Office of The President,
Office of Management and Budget, Washington, DC, March 21, 
                                                      1997.
The Honorable David R. Obey,
Ranking Minority Member, House Appropriations Committee U.S. House of 
        Representatives,
Washington, DC.
    Dear Representative Obey: In accordance with Section 103 of the 
California Bay-Delta Environmental Enhancement and Water Security Act, 
I am transmitting a report on Federal Spending on the environmental 
restoration of California's Bay-Delta region.
    The enclosed report describes spending levels for fiscal years 1993 
through 1998 for each of the Federal agencies participating in a joint 
Federal and State effort to protect and restore the important 
biological resources of this region.
            Sincerely,
                                        Franklin D. Raines,
                                                          Director.
                                 ______
                                 
                           Report to Congress
     interagency budget crosscut of federal spending on ecosystem 
         restoration in california's bay-delta region, 1993-98
                              introduction
    The California Bay-Delta Environmental Enhancement and Water 
Security Act requires the Office of Management and Budget to submit to 
the House and Senate Appropriations Committees an interagency budget 
crosscut of Federal agency spending for ecosystem restoration and other 
purposes in California's San Francisco Bay-Sacramento/San Joaquin Delta 
region (Bay-Delta) for fiscal years 1993 to 1998. Specifically, Section 
103 of the Act states:
    ``The Office of Management and Budget is directed to submit to the 
House and Senate Committees on Appropriations, as part of the 
President's fiscal year 1998 Budget, an interagency budget crosscut 
that displays Federal spending for fiscal years 1993 through 1998 on 
ecosystem restoration and other purposes in the Bay-Delta region, 
separately showing funding provided previously or requested under both 
preexisting authorities and new authorities granted by this title.''
    This report fulfills these requirements.
                        fiscal year 1998 budget
    The President's fiscal year 1998 Budget requests a total of $213.3 
million for ecosystem restoration and other activities in California's 
ecologically and economically important Bay-Delta. Of this amount, 
$70.0 million is baseline spending for programs undertaken pursuant to 
preexisting authorizations. The additional $143.3 million requested in 
fiscal year 1998 is the full amount of fiscal year 1998 spending 
authorized by the Act. The Act became effective in November 1996, when 
California voters approved the provisions of California Senate Bill 900 
(SB 900). This California law authorized a $995 million bond issue to 
cover State cost-sharing for activities to restore the Bay-Delta 
ecosystem and for other California water resources activities. The 
$143.3 million increase provided in the President's Budget for Bay-
Delta represents a 204 percent increase in spending from fiscal year 
1997 to fiscal year 1998. The fiscal year 1998 estimate of $70.0 
million in baseline spending represents nearly a 250 percent increase 
over the fiscal year 1993 funding level of $20.2 million.
Bay-Delta Ecosystem Restoration Account
    The President's fiscal year 1998 Budget requests funding authorized 
by the Act in a new appropriation account (entitled ``California Bay-
Delta Ecosystem Restoration'') under the Department of the Interior's 
Bureau of Reclamation. (See Exhibit 1.) The Department of the Interior 
would transfer funds appropriated to this account to other 
participating agencies based on plans to be approved by the Secretary 
of the Interior. This budget authority would be used to match non-
Federal funding under the terms of a cost-sharing agreement now being 
developed with the State of California.
    The ecosystem restoration plans will be developed by ``CALFED''--a 
consortium of Federal and State agencies with management and regulatory 
responsibilities in the Bay-Delta. CALFED has been charged with finding 
a balanced solution to the four main problems in the Bay-Delta: 
declining ecosystem health, uncertain water supplies, aging levees, and 
threatened water quality. CALFED was established in 1994 when the 
Federal agencies already coordinating their activities entered into a 
framework agreement with the Governor's Water Policy Council of the 
State of California.
    Working with stakeholder groups, CALFED has developed a short list 
of major alternatives, each of which addresses the many problems of the 
Bay-Delta. It is now performing a detailed technical analysis of these 
alternatives and preparing a Programmatic Environmental Impact 
Statement (PEIS). The final PEIS on CALFED's Bay-Delta Program is 
currently scheduled to be filed in late fiscal year 1998. CALFED is now 
developing an Ecosystem Restoration Plan that identifies near-term 
actions that are common to the major alternatives under consideration 
in the PEIS. In addition, CALFED is working to coordinate ecosystem 
restoration with current activities responding to the recent floods.
    As specified in proposed appropriation language, Federal funds 
appropriated for ecosystem restoration in fiscal year 1998 would be 
available for high-priority activities that should be undertaken prior 
to completion of the PEIS. The Administration expects that such 
activities will be identified through the process of developing 
CALFED's near-term Ecosystem Restoration Plan. Such activities are 
likely to include acquisition of fish and wildlife habitat, 
improvements to habitat, fish screens, control of exotic species, and 
monitoring of ecosystem health. After completion of the PEIS, fiscal 
year 1998 and future funds would be available for the Federal share of 
the costs of a broader range of projects.
                  activities included in the baseline
    The Act requires a crosscut of ``Federal spending for fiscal years 
1993 through 1998 on ecosystem restoration and other purposes in the 
Bay-Delta region.'' Neither the Act nor the accompanying conference 
report provided a definition of these purposes. This report uses 
categories of water resources activities referenced in SB 900 to define 
Federal baseline spending in the Bay-Delta. The SB 900 categories used 
are:
  --Delta Improvement program, including: the Central Valley Project 
        Improvement program; the Bay-Delta Agreement program (Category 
        III non-flow measures in the 1994 Bay-Delta Agreement); the 
        South Delta Barriers program; and the CALFED Bay-Delta program 
        (funding of Federal staff responsible for planning, 
        environmental compliance, and implementation of Bay-Delta 
        solutions);
  --Clean Water and Water Recycling program, including: Drainage 
        Management, and the Delta Tributary Watershed program; and
  --CALFED Bay-Delta Ecosystem Restoration program. This includes 
        certain Federal activities, such as work to address Endangered 
        Species Act requirements, that are necessary parts of ecosystem 
        restoration in the Delta that have been undertaken prior to 
        spending by the State of California on this category and will 
        likely continue.
    Exhibit 2 shows, by agency, Baseline Federal spending on ecosystem 
restoration and other purposes in the Bay-Delta region of California 
for fiscal year 1993 through fiscal year 1998. These are the 
discretionary expenditures for programs funded under authorizations 
that predated the California Bay-Delta Environmental Enhancement and 
Water Security Act. Baseline spending during the period ranged from 
$20.2 million in fiscal year 1993 to a high of $77.1 million in fiscal 
year 1996, to $70.0 million in fiscal year 1998.
                     agency components of baseline
    The Federal agencies currently with baseline funding identified for 
Bay-Delta ecosystem restoration activities are the Department of the 
Interior (Bureau of Reclamation, U.S. Fish and Wildlife Service, and 
the U.S. Geological Survey), the Army Corps of Engineers, the 
Environmental Protection Agency, the Department of Agriculture (Natural 
Resources Conservation Service), and the Department of Commerce 
(National Marine Fisheries Service). Other Federal agencies not listed 
below may participate with CALFED in Bay-Delta ecosystem restoration in 
the future.
Department of the Interior
    Bureau of Reclamation.--The Bureau of Reclamation (Reclamation) 
accounts for $55.7 million of baseline spending in fiscal year 1998. 
During the fiscal year 1993-98 period, the Bureau of Reclamation has 
provided most of the Federal funding (about 75 percent) for ecosystem 
restoration activities in the Bay-Delta. Reclamation's primary 
activities are those authorized by the Central Valley Project 
Improvement Act. Funds for this purpose have come from general 
appropriations and from the Central Valley Project Restoration Fund, 
which consists of revenues collected from project beneficiaries. These 
funds have supported a variety of activities intended to restore fish 
and wildlife habitats and populations in the Central Valley, such as 
the development of the Anadromous Fish Restoration Plan; the 
acquisition of water for wildlife refuges and other environmental 
purposes; and the construction of hatchery improvements, fish screens, 
and other facilities. In addition, Reclamation has provided funds to 
support the CALFED Bay-Delta Program, the Interagency Ecological 
Program, and other Bay-Delta restoration activities.
    U.S. Geological Survey.--U.S. Geological Survey (USGS) accounts for 
$3.1 million of fiscal year 1998 baseline funding. Although not yet a 
member of CALFED, the USGS has contributed critical data and scientific 
information related to water resources, wetlands, contaminants, and 
salinity, and assisted in ongoing biological research.
    The U.S. Fish and Wildlife Service.--The U.S. Fish and Wildlife 
Service (USFWS) accounts for $0.7 million in fiscal year 1998. The 
USFWS has been a member of CALFED since its inception and provides 
staff support to the Bay-Delta Program.
Army Corps of Engineers
    The Army Corps of Engineers (Corps) accounts for $5.1 million of 
baseline spending in fiscal year 1998. The Corps is not yet a member of 
CALFED, but has provided support to the Agreement for a number of 
years. Most of the activities for the Corps consist of projects under 
Section 1135 of the Water Resources Development Act of 1986, ant 
General Investigation (GI) program studies. The Corps is working under 
Section 1135 authority to pursue restoration projects along the 
Sacramento River by modifying existing Corps flood control and 
navigation projects. During fiscal year 1998, construction is scheduled 
to be completed on a project that will restore seasonal and permanent 
wetlands on 396 acres. To other Section 1135 projects, now in the 
planning and design stage, will involve restoration of mixed habitats 
on land currently in agricultural use. The GI program studies are 
investigating other potential environmental restoration opportunities.
Environmental Protection Agency
    The Environmental Protection Agency (EPA) accounts for $2.5 million 
of baseline spending in fiscal year 1998. EPA is an original member and 
a cochair of CALFED. EPA participates in the long-term planning process 
for the CALFED program as well as in the Delta tributary and drainage 
management activities. The majority of EPA financial support to the 
effort includes funds for grants under the Clean Water Act (Sections 
319, 205j, and 604b), generally to the State of California. Because the 
State determines how and where to spend these funds, EPA has estimated 
the amounts the State is likely to allocate to the Bay-Delta region in 
fiscal year 1997 and fiscal year 1998. This estimate is based on 
historical trends and presumed State priorities. EPA has not included 
any Safe Drinking Water Act funding in its projection, because this 
program's role in ecosystem restoration and other related activities 
remains to be developed.
Department of Agriculture
    The Department of Agriculture's Natural Resources Conservation 
Service (NRCS) accounts for $2.1 million of baseline spending in fiscal 
year 1998. NRCS provides technical assistance to support ecosystem 
restoration objectives in the Bay-Delta Area. Like the Corps, it is not 
yet a member of CALFED. Part of the NRCS increase from fiscal year 1997 
to fiscal year 1998 reflects support for non-Federal watershed 
coordinators. In the future, USDA may be able to assist CALFED efforts 
using its authorities under the Federal Agricultural Reform Act of 1996 
to purchase flood easements. Also, USDA can use the mandatory 
Conservation Reserve Program, Wetland Reserve Program, and 
Environmental Quality Incentives program to support ecosystem 
restoration.
Department of Commerce
    The Department of Commerce's National Marine Fisheries Service 
(NMFS) accounts for $0.8 million in fiscal year 1998. NMFS, an original 
participant in CALFED, is working on a wide variety of improvement 
activities in the Delta and its tributary watersheds.
                                 ______
                                 
                               Exhibit 1
 fiscal year 1998 president's budget, proposed appropriation language, 
           department of the interior, bureau of reclamation
California Bay-Delta Ecosystem Restoration
    For necessary expenses of the Department of the Interior and other 
participating Federal agencies in carrying out the California Bay-Delta 
Environmental Enhancement and Water Security Act consistent with plans 
to be approved by the Secretary of the Interior, in consultation with 
such Federal agencies, $143,300,000, to remain available until 
expended, of which such amounts as may be necessary to conform with 
such plans shall be transferred to appropriate accounts of such Federal 
agencies: Provided, That such funds may be obligated only as non-
Federal sources provide their share in accordance with the cost-sharing 
agreement required under section 102(d) of such Act: Provided further, 
That such funds may be obligated prior to the completion of a final 
programmatic environmental impact statement only if (1) consistent with 
40 C.F.R. 1506.1(c), and (2) used for purposes that the Secretary finds 
are of sufficiently high priority to warrant such an expenditure.

 EXHIBIT 2.--ESTIMATE OF FEDERAL SPENDING ON ECOSYSTEM RESTORATION AND OTHER PURPOSES IN THE BAY-DELTA REGION OF
                                                   CALIFORNIA                                                   
                                            [In thousands of dollars]                                           
----------------------------------------------------------------------------------------------------------------
                                                      Fiscal year (actual)                     Fiscal year      
                                        ------------------------------------------------------------------------
                                                                                             1997        1998   
                                            1993        1994        1995        1996     (estimated)   (budget) 
----------------------------------------------------------------------------------------------------------------
Estimated Baseline by Agency:                                                                                   
    Department of the Interior:                                                                                 
        Bureau of Reclamation..........      12,061      44,688      42,019      60,678       53,124      55,701
        U.S. Fish and Wildlife Service.          75         125         291         721          721         65O
        U.S. Geological Survey.........       2,756       3,117       3,205       2,933        3,117       3,117
    Army Corps of Engineers............       1,892       6,259       7,202       7,197        8,677       5,127
    Environmental Protection Agency....       1,703       1,819       3,114       3,167    \1\ 1,742   \1\ 2,500
    Department of Commerce: National                                                                            
     Marine Fisheries Service..........         287         292         642         65O          838         838
    Department of Agriculture: National                                                                         
     Resources Conservation Service....       1,400       1,500       1,600       1,707        1,710       2,100
                                        ------------------------------------------------------------------------
      Subtotal, Baseline...............      20,174      57,800      58,073      77,053       69,929      70,033
California Bay-Delta Environmental                                                                              
 Enhancement and Water Security Act....  ..........  ..........  ..........  ..........  ...........     143,300
                                        ------------------------------------------------------------------------
      Total............................      20,174      57,800      58,073      77,053       69,929     213,333
----------------------------------------------------------------------------------------------------------------
\1\ Fiscal year 1997 and fiscal year 1998 are based on assumptions about the State's allocation of Federal      
  grants to the Bay-Delta Region.                                                                               

    Question. What criteria will be used and how will project selection 
be made?
    Answer. Technical staff, including state, federal, and public 
stakeholder representatives, will systematically evaluate and 
prioritize the ecological stress and limiting factors that are impeding 
our ability to restore priority habitats and species. Technical staff 
will then identify and prioritize projects and programs to address 
these stress and limiting factors. This process will also identify 
actions individual agencies can take with respect to their baseline 
activities. Under the appropriations language proposed in the fiscal 
year 1998 Budget, the Secretary of the Interior would have ultimate 
responsibility for decisions involving the use of federal funds. The 
California Secretary for Resources already has a similar responsibility 
for the use of State funds.
                        central arizona project
    Question. Last year, there was a dispute over how much funding 
should be provided to the Central Arizona Project. The dispute centered 
around funding for non-contract costs and costs related to fish and 
wildlife activities. This resulted in Congress reducing the 
appropriations for the CAP by $12.988 million and a subsequent letter 
from the Department informing the Committee of measures being taken by 
the Bureau of Reclamation to carry out the intent of the Conference 
agreement while still meeting its legal obligations and providing 
appropriate oversight where necessary.
    Has the Bureau of Reclamation encountered any problems in carrying 
out the direction contained in the Conference Report on the fiscal year 
1997 bill? If so, please explain what the issues are and what is being 
done to address them.
    Answer. Reclamation encountered three major problems in carrying 
out the directions of the Conference Report. The three issues are 
detailed in the Department's February 24, 1997 letter to the Committees 
on Appropriations, a copy of which follows.
                     letter from patricia j. beneke
                        Department of the Interior,
                                   Office of the Secretary,
                                 Washington, DC, February 24, 1997.
Honorable Joseph M. McDade,
Chairman, Subcommittee on Energy and Water Development, Committee on 
        Appropriations, House of Representatives, Washington, DC.
    Dear Chairman McDade: In September 1996, the Congress, during 
consideration of the Conference Report to the fiscal year 1997 Energy 
and Water Development Appropriations Bill, reduced the funding levels 
requested in the Presidents Budget for the Central Arizona Project 
(CAP) by $12,988,000. This provided a total fiscal year 1997 CAP 
allocation of $58,740,000. The purpose of this letter is to inform you 
of the measures being taken by Reclamation to comply as completely as 
possible with the Conference Report and to follow up on conversations 
with staff earlier this fiscal year. At the request of the members of 
the Arizona Congressional delegation during briefings on this subject, 
we are sending them copies of this letter.
    Over the past several months we have attempted to reconcile the 
intent of the Report language, major funding reductions, and critical 
project needs. We have been in contact with your staff and members of 
the delegation during this process and are continuing our discussions. 
We are making our best efforts to follow the intent of the Report 
including postponement of several environmental and recreation 
enhancement projects. We have been advised by our attorneys, however, 
that the Report does not dispense us from the responsibility to protect 
the interests of the United States and project beneficiaries in 
instances where a literal adherence to the specific reductions called 
for in the Report would prevent us from recovering monetary damages, 
meeting our legal obligations, or accomplishing in an effective manner 
work for which funds were provided. As we continue to work with 
subcommittee and delegation staff to address these issues, we wanted to 
briefly summarize some of these instances so that you would be aware of 
the challenges we face. We are facing difficult choices in the 
following three areas:
    1. Those areas where the report expresses a desire to eliminate 
funding for programs in which the United States stands to recover 
monetary damages. An example of this is the litigation of Reclamation's 
latent defects claim for six Hayden-Rhodes Aqueduct siphons. Failure to 
continue to pursue this litigation could result in not only a loss of 
substantial monetary recovery (tens of millions of dollars) but also a 
judgment against the United States, and, therefore, we will need to 
continue to pursue these programs;
    2. Those areas where the report expresses a desire to eliminate 
funding for activities which Reclamation has a legal requirement to 
undertake, such as the reasonable and prudent alternatives (RPA's) from 
the Biological Opinion pertaining to the construction and operation of 
the CAP. Reclamation will continue to work to ensure that costs for 
these activities are minimized consistent with legal requirements. In 
addition, within available resources, we will need to continue work 
where funds were eliminated for contract and noncontract costs to meet 
specific environmental mitigation commitments that were previously 
made. These actions are necessary to avoid the risk of disabling 
injunctions that could seriously interfere with project operations: and
    3. Those areas where the Report provided funds for ongoing and/or 
new programs or construction contracts but where the report eliminated 
the noncontract costs required for contract administration, quality 
control, and construction management. The Report's expressed desire to 
eliminate these administrative funds makes the oversight of existing 
contracts difficult and will preclude us from entering into new 
contracts. We will need to expend administrative funds to accomplish 
the programs funded in the Report. Examples here include the Sierra 
Vista effluent recharge project, and the New Waddell Dam Roadrunner 
Campground.
    Thank you for the opportunity to inform you of the steps we have 
been taking in seeking to comply as completely as possible with the 
Conference Report accompanying the Fiscal Year 1997 Energy and Water 
Development Appropriations Act. It is clear that we need to resolve 
these matters with your staff and the members of the Arizona 
Delegation. For this reason, I have directed members of my staff to 
work with your staff to continue to provide further details and to keep 
the Arizona delegation staff fully apprised of developments as we 
strive to reach closure on the allocation of these funds. I look 
forward to resolving this matter shortly.
            Sincerely,
                                        Patricia J. Beneke,
                         Assistant Secretary for Water and Science.

    The issues include elimination of funds for programs where the 
United States stands to recover monetary damages, activities which 
Reclamation has a legal obligation to undertake, and non-contract funds 
required to administer ongoing and/or new construction contracts.
    The issue associated with the recovery of monetary damages relates 
to latent defects on six CAP siphons and Reclamation's litigation 
against the original construction contractor. The United States is 
currently in litigation seeking to recover from the contractor $39.5 
million in monetary damages. The elimination of fiscal year 1997 
funding would jeopardize Federal claims against the contractor. To 
avoid such an outcome, Reclamation is continuing to pursue the 
litigation, including pre-trial activities, rather than suspend these 
activities in fiscal year 1997. In addition, dropping the claim at this 
time could result in monetary judgements against the United States.
    The issue of legal obligations relates to compliance with 
requirements of the Endangered Species Act associated with the CAP Gila 
River Basin Biological Opinion. If Reclamation fails to implement the 
Biological Opinion, Reclamation will be vulnerable to charges that it 
is out of compliance with the Endangered Species Act by operating a 
federal project in a manner that jeopardizes the continued existence of 
four endangered native fish species. We have worked extensively with 
all the stakeholders to minimize the costs of implementing the 
Reasonable and Prudent Alternative. Delays in implementing the 
reasonable and prudent alternatives contained in the Biological Opinion 
form a basis for the lawsuit filed by the Southwest Center for 
Biological Diversity against Reclamation, the Department and the Fish 
and Wildlife Service. Further delays ultimately could affect project 
operations adversely.
    The issue of non-contract funds required to administer ongoing and/
or new construction contracts relates to the need for such work as 
contractor claim settlements, warranty inspections, completion reports, 
as-built drawings, and contract records disposition. In fiscal year 
1997 construction contracts were funded, in many cases, without the 
necessary non-contract costs to administer these contracts. Reclamation 
is unable to issue new contracts, administer and inspect on-going 
construction contracts, or resolve contractor claims against the United 
States without these funds. As a result, Reclamation has decided not to 
award any new construction contracts in fiscal year 1997 where there is 
inadequate funding to support the contract administration, to complete 
as rapidly as possible the ongoing construction contracts, and to 
expedite completion of any outstanding administration issues associated 
with these on-going contracts.
    Question. Has the fiscal year 1998 request been structured with the 
fiscal year 1997 Conference Report in mind, and if not, why?
    Answer. To the extent possible, Reclamation has formulated the 
fiscal year 1998 budget for CAP with the fiscal year 1997 conference 
report in mind. The differences relate to the three issues discussed 
earlier.
    Reclamation included funding to comply with the reasonable and 
prudent alternatives necessary to comply with the Endangered Species 
Act Biological Opinion on the Gila River to ensure that the CAP is 
operated without jeopardizing the continued existence of four 
endangered native fish species. We have included sufficient funding for 
non-contract costs to assure that Reclamation carries out its 
responsibilities associated with construction contract administration 
and defense of Reclamation in the lawsuit filed by the Southwest Center 
for Biological Diversity. Finally, we have included sufficient funds to 
continue pursuit of litigation against the construction contractor to 
recover $39.5 million due to latent defects discovered on six CAP 
siphons.
    Question. If it has, have you worked with local interests in an 
effort to head-off problems similar to those we had on the fiscal year 
1997 budget?
    Answer. Reclamation has worked extensively with local interests, 
particularly the Central Arizona Water Conservation District and 
members of the Arizona Congressional delegation, to gain support for 
Reclamation's goal to efficiently complete the CAP. Reclamation's 
efforts at local coordination, while successful in gaining District 
support for several items it opposed in fiscal year 1997, so far has 
not resulted in complete accord. This is particularly true in the area 
of adequate funding for staff and support costs necessary to manage and 
administer a federal project for all beneficiaries and compliance with 
Endangered Species Act requirements.
                          desalination program
    Question. I believe $2 million is included in your budget to 
address desalination problems and technologies. The budget 
justification indicates that a portion is for new Phase II pilot 
projects and new technologies. First, could you tell me what the goals 
and objectives are and how Reclamation is managing the program to meet 
those goals and objectives?
    Answer. Beginning in fiscal year 1992, Reclamation began sponsoring 
limited in-house and contractual research efforts under the Water 
Treatment Technology Program. Beginning in fiscal year 1998, the Water 
Treatment Technology Program will make the transition to the 
Desalination Research Development Program, utilizing the new authority 
under Public Law 104-298, the Water Desalination Act of 1996.
    The principal goal of the program is to lower the cost of 
desalination through research and development activities. A number of 
objectives follow from this primary goal. The program is focused on 
several points:
  --Increasing the ability of communities of varying sizes and 
        financial resources to economically treat saline water, and 
        other sub-standard waters, to potable standards or reuse 
        standards, as needed.
  --Increasing the ability of the United States desalting industry to 
        compete throughout the world, by fostering partnerships with 
        them to develop new and innovative technologies (patent rights 
        will belong to the non-Federal partners for all non-Federal 
        applications).
  --Developing methods to make desalting and reuse more efficient 
        through promotion of dual-use facilities, in which waste energy 
        could be applied to desalting water.
  --Developing methods to ensure desalting technologies are 
        environmentally friendly.
  --Working with regulators to evaluate concentrate streams and ensure 
        that the regulations are appropriate for the application.
  --Finding ways to use by-product streams.
  --Maximizing technology transfer to ensure full transfer of knowledge 
        and commercialization of technology.
    Reclamation will meet these objectives through a three-way 
combination: (1) cost-shared contract and cooperative agreements with 
the private, public and academic sectors; (2) in-house research 
activities; and (3) research activities co-sponsored by our research 
partners from other Federal laboratories. Reclamation will build on its 
findings and developments from its existing Water Treatment Technology 
Program. A draft Research Program Plan has been prepared for the fiscal 
year 1998 Desalination Research and Development Program and is 
presently being peer reviewed by the existing consortium of ten other 
Federal partners and by technical experts from the desalination and 
reuse communities to obtain their input into the program authorized 
under Public Law 104-298.
    Question. Last year, Congress passed the Water Desalination Act of 
1996, Public Law 104-298, which authorized the Secretary of the 
Interior to conduct studies regarding the desalination of water and 
water reuse, and other purposes. How does the Department plan to 
proceed with implementing this program?
    Answer. Reclamation will build on its efforts and technical 
findings from the Water Treatment Technology Program, the predecessor 
to Public Law 104-298. A draft Research Program Plan has been prepared 
and is presently being peer reviewed by technical experts from 
throughout the public, private, and academic sectors.
    Question. Will the program be restructured to include the 
provisions of this legislation?
    Answer. Yes, the new draft program plan includes all provisions 
outlined in Public Law 104-298. These specific provisions would include 
the following objectives in addition to those mentioned before: (1) 
evaluating the potential market and use for by-products of desalination 
processes; (2) investigating the economic prospects of desalination 
facilities versus other methods to increase the supply of quality 
water; and (3) investigating the opportunities for dual-purpose 
desalination/power facilities.
    In addition, Public Law 104-298 lists specific cost-sharing 
guidelines which are different from the non-Federal contribution than 
those presently used. Under Public Law 104-298, the Federal share is 
limited to up to 50 percent of total project costs. But a Federal 
contribution greater than 25 percent is possible only where the project 
is not financially feasible without the additional Federal funds. The 
program will be restructured to include these new cost-sharing 
guidelines.
    Question. When will the Secretary make recommendations on 
desalination demonstration projects as required by the Act?
    Answer. The timing of such recommendations is unclear. First, there 
must be sufficient initial research progress in order to suggest 
innovative technologies in which to demonstrate.
    Question. What is the funding profile for this program through the 
year 2000?
    Answer. The funding available for this program will depend upon 
future fiscal constraints and upon the likelihood of program success in 
reducing the costs of desalting technologies.
    Question. There are several communities in eastern New Mexico which 
have expressed initial interest in developing possible pilot or 
demonstration projects. Will the program allow such small rural 
communities the opportunity to participate in available funding?
    Answer. The program is open to proposals by small and rural 
communities. The present Water Treatment Technology Program provides 
significant pilot testing opportunities to rural, small and/or Native 
American communities on a 50/50 cost share basis. These opportunities 
have been very popular with these communities, and we expect they will 
continue. However, demonstration projects will be funded on a 
competitive basis.
    Question. What will the principal criteria and factors in the 
selection of pilot and demonstration projects?
    Answer. The most important criteria will be:
  --Does the project test or demonstrate an innovative technology?
  --Does the project promote a non-traditional application of a current 
        technology where it is unproven?
  --Does the project promote a technology that could be feasibly 
        implemented in the community?
  --Will the project establish practical applications and have regional 
        applicability and interest?
  --Will its capacity be sized appropriately to demonstrate 
        practicality, but be less than a full-size production plant?
    In addition, Reclamation is working to ensure that its desalination 
program will complement efforts under Title 16 of Public Law 102-575 to 
demonstrate new water recycling technologies.
                        salinity control program
    Question. What are the department's plans in implementing 
provisions of the Farm Bill which allows non-Federal interests to use 
the Colorado River Basin Fund to meet the cost-sharing requirement on 
salinity control projects?
    Answer. Reclamation plans to begin cost sharing as soon as we can 
establish the financial system and controls to make this possible. As 
the fund's manager, Reclamation is working with the USDA to establish 
an Interagency Agreement to allow the USDA to bill the Basin Fund for 
cost sharing in designated salinity control areas in fiscal year 1997. 
Within Reclamation's Basinwide Program, cost sharing from the Basin 
Fund will be used to fund the local share (30 percent) of the Hammond 
Project in New Mexico and the Price-San Rafael Rivers Unit in Utah 
beginning in fiscal year 1998.
             new programs and projects for fiscal year 1998
    Question. Could you tell the Committee what new programs, projects, 
or activities are funded in the fiscal year 1998 budget which were not 
included in the 1997 budget? Provide for the record a list of these new 
items showing the amount requested and a brief description of the 
program.
    Answer. The following activities proposed in the fiscal year 1998 
budget were not included in the fiscal year 1997 budget:
                               new starts
    Arsenic Wellhead Treatment Demonstration Program, New Mexico 
($914,000 is the total cost, of which $500,000 is for fiscal year 1998 
plus $414,000 for fiscal year 1999).--Will develop technologies in the 
Middle Rio Grande Basin to remove naturally occurring pollutants which 
could be applied to groundwater supply systems throughout the 17 
Western States.
    Freeze Thaw Desalination Project, North Dakota ($360,000).--Will 
evaluate the treatment of brackish waters using new technology which 
takes advantage of a natural freeze-thaw/evaporation process of water. 
This involves the economic coupling of freeze crystallization and 
evaporation, using natural climatic conditions. This technology could 
resolve high salinity water quality problems in the Devil's Lake and 
Stump Lake area.
                              new studies
    California Water Augmentation Program, California ($200,000).--To 
optimize benefits from existing State and Federal facilities by 
improving water management practices and augmenting existing supplies.
    Cheyenne Bottoms Wildlife Area Study, Kansas ($101,000).--To 
identify methods to reduce evaporative losses and conserve water to 
protect the Bottoms from adverse drought effects and excessive sediment 
loading. Subdividing a portion of the Bottoms will allow flooding 
portions of the pool to meet wildlife habitat needs.
    Delta Model Development Group, California ($50,000).--To develop a 
technically defensible model with sufficient spatial and temporal 
resolution for examining water alternatives and impacts in meeting Bay/
Delta ecosystem requirements.
    Lugert-Altus Water Resource Management, Oklahoma ($100,000).--The 
model will evaluate the actual quantity of stream and groundwater 
available and the amount discharged into the adjacent watersheds to 
determine the amount of water available for appropriation.
    Mammoth Lakes Water Optimization Study, California ($80,000).--Will 
examine changes to current water management practices and find new uses 
for what are currently considered ``waste'' streams, such as treated 
effluent or geothermal water.
    Mesa County Water Conservation Study, Colorado ($90,000).--Analysis 
of irrigation facilities to identify opportunities for water 
conservation.
    Nebraska Rainwater Basin Assessment, Nebraska ($133,000).--
Cooperative effort to assess the Nebraska Rainwater Basin Wetlands and 
analyze the environmental features and human activities/alterations 
that impact the wetlands and their watersheds.
    Rapid City Wastewater Reuse Study, South Dakota ($75,000).--To 
determine the feasibility of proceeding to final design and 
construction of Brennan Reservoir.
    Rio Grande Project Drains Water Quality Study, New Mexico; Texas 
($95,000).--Initiate sampling and analysis of agricultural drain water 
return flows.
    Rio Grande Riparian Tree Species Consumptive Use Study, New Mexico 
($75,000).--Analysis of water consumption of riparian tree species.
    Question. Why should funding for these new initiatives be included 
when there is insufficient funding to maintain optimum schedules of on-
going projects and activities?
    Answer. We believe these new initiatives are of sufficiently high 
priority to warrant funding in fiscal year 1998. They are intended to 
identify ways to address real local and regional problems and to meet 
current and future water quality, quantity, and environmental needs 
through enhanced management of existing Federal and non-Federal 
facilities. These studies and demonstrations will address options to 
make more efficient use of existing supplies and integration of 
existing surface/groundwater supplies with minimal structural 
requirements. Furthermore, they are not expected to result in large 
future Federal outlays.
             upper rio grande water operations model study
                 middle rio grande project, new mexico
    Question. The Committee provided an additional $450,000 for the 
current fiscal year for the Bureau of Reclamation to accelerate the 
upper Rio Grande water operation model study in order to address 
current and future drought and other water management issues in New 
Mexico.
    Was the Committee's direction to use $450,000 to accelerate the 
water operation model study followed? If not, why?
    Answer. At the start of the current fiscal year, Reclamation 
allocated $160,000 for this program to fund initial up-front design 
work and investments in the Rio Chama test case. The interagency 
Steering Committee is now completing a mid-year progress evaluation of 
the program. As a result of this evaluation, the Region is considering 
transferring additional funds to this program in fiscal year 1997.
    Question. Does the fiscal year 1998 request for the Bureau of 
Reclamation continue the study and activities as contemplated by the 
Committee action in 1997? If not, why?
    Answer. Reclamation has requested $170,000 in its fiscal year 1998 
Middle Rio Grande Project O&M budget for the water operations model. 
This will continue the study and activities contemplated by the 
Committee.
    Question. How much funding is needed in fiscal year 1998 to 
continue the study effort by the Bureau of Reclamation and the other 
Federal agencies involved? How long will it take to complete this 
effort including evaluation of water operation alternatives?
    Answer. It is important to differentiate between the ``backbone'' 
of the water operations model, and associated/supporting studies. The 
backbone will provide the basic water operations functions that will 
codify operating rules and existing data. This will allow for water 
accounting and unrefined evaluations of water operation alternatives on 
a broad scale throughout the basin. The associated activities, such as 
refining hydrologic data that is used by the model, are necessary to 
refine the accuracy and precision of the model. Similarly, the 
development of biological data and associated models will permit the 
broader application of the water operations model. Reclamation is 
funding the associated activities through other program budgets; the 
Corps of Engineers, as we understand it, is funding associated 
activities through its Upper Rio Grande water operations model budget.
    A funding level of $170,000 for Reclamation, as represented in the 
current budget request, would allow Reclamation to continue measured 
progress on the actual water operations model. At this funding level, 
we anticipate that an operating water operations model would first be 
available by the end of fiscal year 2000.
    Question. Provide a table for the Record which shows the 1997 
funding, the budget request for fiscal year 1998 and the amount 
(capability) that could be used by each Federal agency to continue 
activities in fiscal year 1998 along with a brief description of how 
the additional funds would be used.
    Answer. The following table summarizes budgets to support the water 
operations model backbone:

                                               [Amount in dollars]                                              
----------------------------------------------------------------------------------------------------------------
                                                                            Fiscal year                         
                                                 ---------------------------------------------------------------
                     Agency                                                            1998                     
                                                       1997        1998 (budget     (additional     1998 (total 
                                                                     request)       capability)     capability) 
----------------------------------------------------------------------------------------------------------------
Reclamation.....................................     \1\ 160,000         170,000         300,000         470,000
Corps of Engineers..............................         206,000  ..............         330,000         330,000
U.S. Geological Survey..........................  ..............  ..............         200,000         200,000
U.S. Fish and Wildlife..........................  ..............  ..............          50,000          50,000
Bureau of Indian Affairs........................  ..............  ..............          50,000          50,000
International Boundary and Water Commission (US)  ..............  ..............          20,000          20,000
                                                 ---------------------------------------------------------------
      Totals....................................         366,000         170,000         950,000      1,120,000 
----------------------------------------------------------------------------------------------------------------
\1\ $25,000 of this amount thus far transferred to the USGS.                                                    

    Reclamation estimates that the Federal agencies have the ability to 
use in fiscal year 1998 an additional $950,000 beyond the amount 
requested for activities associated with the development of the actual 
water operations model. If this funding level were maintained through 
fiscal year 1999, a preliminary evaluation of broad water management 
options could be completed by the end of that fiscal year as well.
    Funds would be used to support agency staff participation in 
technical activities to develop the water operations model, as well as 
interagency coordination and outreach programs. A portion of 
Reclamation funds would be used to contract model development support 
to accelerate progress.
    The additional capability shown was not included in the President's 
budget and is not a priority of the Department.
    Question. Has one of the 6 Federal agencies involved in this study 
been designated as the lead agency to coordinate and oversee study work 
and progress? If not, please explain why? Does funding of the study in 
a single agency make sense, and if so, which agency is best suited to 
have overall responsibility from a programmatic and funding stand 
point?
    Answer. Reclamation and the Corps of Engineers are the recognized 
de facto lead agencies due to their leadership in conceiving and 
promoting the concept of a basin wide hydrologic model, their more 
focused interest in the development of the model, and their funding of 
the program. In this leadership role, for example, Reclamation has 
transferred some of its funds to the USGS to fund that agency's 
involvement. Each agency accounts for the expenditures of its funds. 
However, the six Federal agencies which signed the Memorandum of 
Understanding collectively make program decisions and monitor progress 
in the Steering Committee.
    While there could be some benefits of having a single lead agency 
for administrative purposes, Reclamation believes that the way in which 
it now shares such a role with the Corps of Engineers ultimately is 
best for the program. Additional cooperative management controls and 
accountability to further ensure the success of the program are 
planned.
    Question. Provide the Committee with a list of major milestones 
through completion, along with annual funding profile for each of the 
agencies participating in the study effort.
    Answer: A funding profile beyond fiscal year 1998 is not available. 
At current funding levels we believe it is reasonable to assume the 
following major milestones for the program:

                                                                                                                
                           Program                                                 Milestone                    
                                                                                                                
Model test case (Rio Chama)...........................  September 1997.                                         
Develop preliminary full basin model..................  September 1998.                                         
(Existing) data base development......................  September 1998.                                         
Preliminary basin water operations evaluation.........  September 2000.                                         
Model and data base refinement........................  September 2002.                                         
                                                                                                                

                arsenic wellhead treatment demonstration
                 middle rio grande project, new mexico
    Question. The budget request includes $414,000 for the Bureau of 
Reclamation to undertake a project to demonstrate new technologies for 
the removal of naturally occurring pollutants from ground water source 
water supply systems in the vicinity of Albuquerque.
    Tell the Committee about this project--what the problems are, and 
how the Bureau developed this demonstration project, and what 
involvement local interests have in this effort.
    Answer. This project is one of the Reclamation projects to receive 
``full funding'' in fiscal year 1998 pursuant to the Administration's 
full funding initiative. The request for fiscal year 1998 is for 
$914,000, (not $414,000), which includes $500,000 for program 
requirements in fiscal year 1998 and $414,000 for program requirements 
in fiscal year 1999 as described in Reclamation's fiscal year 1998 
Budget Justifications.
    Naturally occurring arsenic in Albuquerque Basin Groundwater has 
caused the City of Albuquerque to abandon the use of two production 
wells because they fail to meet the existing drinking water standard. 
Up to 80 percent of the City's current ground water production would 
not comply with proposed more stringent standards. Conventional arsenic 
treatment methods are not amenable to wellhead installation because of 
their physical size and the complexity and the volume of treatment 
residuals that require further processing before disposal. Arsenic 
treatment is therefore impractical, with current technologies, for 
communities that rely on many geographically distributed wells.
    Research has been ongoing by the EPA, the University of Houston, 
and the City of Albuquerque to develop new treatment technologies that 
might be applied to geographically distributed ground water supply 
systems in Albuquerque. As a result of this research, the City is now 
able to test the performance and reliability of new wellhead treatment 
technologies over a period of several years on a production scale. The 
site chosen for the project is one of Albuquerque's production wells 
that is now out of service due to high arsenic levels.
    Question. How will the project costs be shared, and does the Bureau 
have expression of interest of the City of Albuquerque to provide the 
non-Federal share?
    Answer. The City of Albuquerque will fund 75 percent of total 
project costs and Reclamation will fund 25 percent. The cost sharing 
agreement is currently being developed.
                        animas-la plata project
    Question. It is my understanding that as part of the Romer/
Schoettler Process, the Bureau has stated that water from the Animas 
river is needed to meet water entitlements for the two Ute tribes under 
the 1986 settlement agreement and 1988 legislation and to meet the 
water needs of other nearby communities. It is also my understanding 
that the tribes and other supporters of the ALP project are developing 
a proposal to store water off the Animas which would be smaller and 
cheaper than the current configuration.
    Ms. Beneke, is the Bureau working with the Tribes to develop such a 
proposal?
    Answer. Because of the uncertainty concerning future San Juan River 
Basin depletion allowances, the Ute Mountain Ute Tribe, through an 
Indian Self-Determination Act contract, is analyzing different project 
configurations in relation to differing possible project depletion 
allowances. The Bureau of Reclamation is providing technical assistance 
to the Tribe so it can evaluate potential options that are developed 
and providing requested information regarding project-sizing issues.
    Question. Isn't it the responsibility of the Bureau as a trustee to 
do so?
    Answer. Reclamation recognizes its responsibility for providing 
technical assistance to all the Indian tribes in the San Juan Basin to 
address the issue of potential limited depletion allowances and 
competing water demands.
    Question. Would you support an alternative to the current ALP 
project that satisfies the Utes' claims, preserves existing non-Indian 
uses in SW Colorado and NW New Mexico, and provides a reliable supply 
of water to residents of San Juan County, New Mexico?
    Answer. I am advised that the Citizens' Coalition and the Project 
Proponents involved with the Romer/Schoettler Process are currently 
formulating alternatives. The current notion is that these conceptual 
ideas, when ready, would be presented to all the parties to the Romer/
Schoettler Process for further discussion and evaluation. I would be 
able to support an alternative if it represented a consensus solution, 
resolved the Indian water rights claims, and addressed the 
environmental and economic issues facing the project.
    Question. I believe that the failure to store water from the Animas 
River could have serious consequences to the water supply in NW New 
Mexico. What implications could this failure have on users of the San 
Juan/Chama?
    Answer. I am hopeful we can achieve a solution that New Mexico can 
support. Effects to water users associated with the San Juan/Chama 
Project are unlikely due to the fact that the project is not located 
nor dependent upon water from the Animas or La Plata Rivers.
    Question. Mr. Martinez, at the February American Bar Association 
Water Law Conference, you indicated that a failure of the ALP project 
to meet Native American water rights claims would have serious 
implications. Would you please elaborate?
    Answer. For example, it is generally believed that Indian water 
rights are senior to those of non-Indians in the San Juan River Basin. 
If the project is not built as presently authorized and configured, it 
will still be necessary to find a solution for the Colorado Ute tribes 
that resolves their water rights claims.
    Because of difficulties encountered in constructing the Project as 
presently authorized and configured, including concerns regarding 
compliance with the applicable laws for such projects, Governor Roy 
Romer and Lt. Governor Gail Schoettler of Colorado have initiated a 
Process in which Colorado, New Mexico, the Department of the Interior 
and the EPA, and both the proponents and opponents of the existing 
authorized project are participating. The Romer/Schoettler Process is 
an ongoing effort to find a consensus solution, and thus would avoid 
potential impacts that could arise from unsettled Indian water rights. 
We are actively cooperating to help the parties reach a result to which 
all of them, including the Colorado Ute Tribes, can agree.
                        san juan/gallup pipeline
    Question. I have been very active in trying to find a solution to 
the impediments that are hindering advancement of the Gallup-Navajo 
pipeline, which is designed to improve water availability in NW New 
Mexico and the Navajo Nation. I understand the Bureau is studying 
critical issues of water availability and the environmental impact of 
the project. Would you give the Committee an update on your progress?
    Answer. Since fiscal year 1993 Reclamation has been providing 
planning and technical assistance to the Project's local sponsors which 
include the Navajo Nation, City of Gallup, and Northwest New Mexico 
Council of Governments. We have completed a number of technical 
appraisal studies looking at the potential environmental impacts of the 
project as well as engineering and economic aspects. At this point no 
future water for the Gallup-Navajo Project is included in the San Juan 
River Recovery Implementation Plan baseline. Until endangered species 
issues are resolved, the future availability of water from the San Juan 
will remain uncertain.
    In addition, the currently conceived project would cost an 
estimated $150 million to build and about $5 million annually to 
operate and maintain. Because the project would cover a large, sparsely 
populated area it is not expected to be economical.
    There are also some local political obstacles to be overcome. The 
Navajo Nation and the City of Gallup have had difficulty developing the 
cooperation and support between the two governments that would be 
needed if Gallup-Navajo Project is to become a reality.
                                 ______
                                 
                  Questions Submitted by Senator Burns
                  fort peck rural water supply system
    Question. Mr. Martinez, you have a signed letter in which you 
stated ``we must first have specific budget authority from the Congress 
in order to allocate construction funds for the Fort Peck Rural Water 
Supply System.'' I would assume that a bill passed by Congress and 
signed by the President would give you such budget authority. Am I 
right or wrong?
    Answer. The sentence to which you refer was written in response to 
a request that Reclamation allocate $292,982 from its fiscal year 1997 
budget for project startup activities. Under current agreements between 
Reclamation and the Appropriations Committees, work on authorized but 
previously unfunded projects cannot be initiated through reprogramming. 
If funds were to be provided in a future appropriations act for the 
Fort Peck County Rural Water System, we would have authority to 
obligate funds for construction.
    Section 4 of Public Law 104-300 authorized the Fort Peck County 
Rural Water Supply System for construction. However, although Congress 
authorized the project, we do not support funding for it.
                            montana projects
    Question. I am pleased to see that you have included a number of 
Montana specific projects in your budget request for fiscal year 1998. 
However, I wonder if, since many of these projects have a regional 
interest, as we regionalize these type of approaches if it might be 
possible to look toward placing additional money into these projects?
    Answer. We would be pleased to work with you and your staff to 
identify activities in Montana where additional funds could be utilized 
to accomplish important water resource management objectives where 
there is a significant federal interest.
                                 ______
                                 
                 Questions Submitted by Senator Bennett
                      grand canyon protection act
    Question. In last year's Energy and Water appropriations bill, this 
Committee expressed concern about the scope of the long-term monitoring 
and research program authorized in the Grand Canyon Protection Act. To 
ensure that the program was not expanded beyond the parameters intended 
by Congress, we expressly directed the Secretary of Interior to include 
in the annual budget justification for the Bureau of Reclamation, a 
detailed work program and specific information regarding staffing, 
overhead, tasks and projections for out-year expenditures. We directed 
that this information be submitted to this Committee, to the Senate 
Energy and Natural Resources Committee, and to the House Appropriations 
and Resources Committee.
    It is my understanding that the work program has been prepared in 
draft and circulated to the Transition Working Group. I further 
understand that the work program as drafted, contains tasks that may be 
beyond the authorized scope of work, such as an analysis of 
``intrinsic'' or ``existence'' values. Please explain that if this is 
the case, what criteria is used to determine intrinsic and/or existence 
values. What relevance are these values to what is happening to the 
riverine environment caused by changes in operations affected by the 
EIS?
    To the best of my knowledge, this Committee has not yet received 
the work program for fiscal year 1998. Please inform me of the status 
of this report. When will it be submitted by the Department?
    Answer. In response to language included in the Senate report 
accompanying the Energy and Water Development Appropriations bill for 
fiscal year 1997, Reclamation included in the Budget Justifications for 
fiscal year 1998 on page 401-403 under the heading ``Grand Canyon 
Monitoring and Research Center'' information on the fiscal year 1998 
program and out-year projections.
    The Five-Year Strategic Plan (1998-2003) and the fiscal year 1998 
Annual Plan for future monitoring and research programs have been 
completed in draft form by the Grand Canyon Monitoring and Research 
Center and reviewed by the Transition Work Group. Both documents are 
scheduled to be finalized in July 1997.
    The Fiscal Year 1998 Annual Plan does not contain any research or 
monitoring on ``intrinsic'' or ``existence'' values. The only reference 
to these values was the use of the ``existence'' value in a cost-
benefit analysis proposed in an early draft for year 4 (2002) of the 
Strategic Plan. At the request of the stakeholders, the proposed cost-
benefit analysis model has been dropped from the final draft of the 
Five-Year Strategic Plan.
                      privatization of dutch john
    Question. As you know, legislation will soon be introduced to 
provide for the privatization of federal property in the Dutch John 
community in Daggett County, Utah. The Bureau listed a number of 
concerns with the legislation as introduced in the 104th Congress. 
Please provide for me an analysis of those concerns, and what steps 
might be taken to alleviate those concerns through either changes to 
legislative language or other methods. Please provide to me an analysis 
of the estimated costs to the Bureau over the next fifteen years should 
the Bureau continue to administer the properties at Dutch John. How do 
these costs compare to possible savings? Please explain the possible 
benefits of privatization to the Bureau. Is there precedent to 
privatizing other ``dam towns'' and if so, please provide a brief 
overview of the methods that were taken to implement these 
privatization efforts. What is the difference between those efforts and 
the one suggested by the Dutch John legislation?
    Answer. In a hearing before the Subcommittee on National Parks, 
Forests and Lands on July 25, 1996, Reclamation expressed concern with 
several provisions of H.R. 3486, and noted objections to the NEPA 
waiver and to transition payments. However, with the noted objections, 
Reclamation supported the overall effort to transfer the lands and 
facilities of Dutch John to Daggett County, Utah.
    The net present value to Reclamation to continue to administer the 
Dutch John community for fifteen years based on an annual expense of 
$900,000 with an inflation rate of 3 percent, and using an interest 
rate of 8 percent is $8.6 million. The net present value for fifteen 
years, if the community is privatized, based on $300,000 to maintain 
the facilities retained by Reclamation using an inflation rate of 3 
percent and an interest rate of 8 percent is $2.9 million. The 
difference between the net present values is a savings of $5.7 million 
to Reclamation if the community is privatized without additional costs 
to the government.
    The benefits to Reclamation with privatization are: (1) Reduced 
cost of operation and maintenance of Reclamation facilities. (2) 
Reclamation would no longer be responsible for the community 
infrastructure and utilities.
    There are precedents to privatizing other ``dam towns'' from the 
following legislation: Coulee Dam Community Act of 1957, Public Law 85-
240, 71 Stat.524. Boulder City Act of 1958, Public Law 85-900, 72 Stat. 
1726. Page, Arizona Community Act of 1974, Public Law 93-493, 88 Stat. 
1486.
    Some differences between the above acts and that suggested by the 
Dutch John legislation are:
    1. In the enacted acts, Reclamation owned the land and the 
improvements being transferred. In the case of Dutch John the land is 
located on National Forest Service lands.
    2. The enacted acts did not provide an annual grant to the 
community. However, the acts provided one-time payments for such things 
as incorporation, improvements to various facilities, or other 
assistance.
    3. In the enacted acts, funds from the sale of property were used 
to defray expenses in the process of disposal, while under the Dutch 
John legislation proposed in the last Congress, funds received from the 
sale of property would go to Daggett County.
    We understand new legislation will be introduced soon and will be 
happy to provide further comments at that time.
                                 ______
                                 
                  Questions Submitted by Senator Reid
                     regional administrative costs
    Question. What percentage of the regional budgets, such as the Mid-
Pacific or the Lower Colorado Regions are administrative in nature? 
(The management of the office as opposed to the work in the field).
    Answer. The information is provided in the following table:

                               BUREAU OF RECLAMATION REGIONAL ADMINISTRATIVE COSTS                              
                                             [Dollars in thousands]                                             
----------------------------------------------------------------------------------------------------------------
                                                                             Total                              
                  Region                           Fiscal year            obligations   Administrative   Percent
----------------------------------------------------------------------------------------------------------------
Mid Pacific..............................  1994.......................        $139,819         $24,979      17.9
                                           1995.......................         163,057          17,573      10.8
                                           1996.......................         205,313          18,392       9.0
                                           1997.......................         253,877          21,867       8.6
                                           1998.......................         345,630          22,400       6.5
Lower Colorado...........................  1994.......................         361,083          32,645      8.28
                                           1995.......................         374,085          30,785      7.60
                                           1996.......................         308,154          27,403      8.16
                                           1997.......................         405,752          23,639      5.51
                                           1998.......................         376,351          23,324      5.84
Great Plains.............................  1994.......................         120,623          22,159      18.0
                                           1995.......................         119,919          19,510      16.0
                                           1996.......................         148,193          19,454      13.0
                                           1997.......................         158,964          19,655      12.0
                                           1998.......................         146,018          20,438      13.0
Pacific Northwest........................  1994.......................         120,114          26,465      22.0
                                           1995.......................         127,734          27,438      21.5
                                           1996.......................         128,735          24,512      19.0
                                           1997.......................         140,323          24,560      17.5
                                           1998.......................         133,897          25,124      18.8
Upper Colorado...........................  1994.......................         193,083          27,972      14.4
                                           1995.......................         158,818          27,708     17.45
                                           1996.......................         160,091          27,454     17.15
                                           1997.......................         185,672          28,099     15.13
                                           1998.......................         162,620          27,087     16.66
----------------------------------------------------------------------------------------------------------------

    Question. What has been the rate of increase in administrative 
funding over the past few years?
    Answer: The percentage of administrative funding over the past few 
years has decreased in four regions and increased in one, as depicted 
in the following table:

                              [Percentage]                              
------------------------------------------------------------------------
                 Region                      Decreased       Increased  
------------------------------------------------------------------------
Mid Pacific.............................              64  ..............
Lower Colorado..........................              29  ..............
Great Plains............................              27  ..............
Pacific Northwest.......................              15  ..............
Upper Colorado..........................  ..............              15
------------------------------------------------------------------------

                             truckee-carson
    Question. What is the status of the Bureau of Reclamation's 
implementation of Public Law 101-618, The Truckee Carson Negotiated 
Water Settlement? Why is it taking so long?
    Answer. The centerpiece of Public Law 101-618 is the development of 
an operating agreement for the Truckee River based in large measure on 
the Preliminary Settlement Agreement between the Pyramid Lake Paiute 
Tribe and the Sierra Pacific Power Company. This agreement has taken on 
the name of the Truckee River Operating Agreement, or TROA. It has 
taken a long time to get TROA developed because of the number of 
interests involved and the complexity of the issues. For instance, 
extensive analysis had to be conducted to develop a good understanding 
of the impact of TROA on recreation pools and instream flows in 
California so that California would be in position to make 
recommendations on improving them and so that other parties could 
understand the impacts of such improvements on their interests and 
water rights. Further analysis also had to be conducted to factor in 
the Truckee River Water Quality Settlement and other types of credit 
water. These efforts go well beyond the minimum Preliminary Settlement 
Agreement requirements in meeting the needs of the negotiating parties 
as well as improving conditions on the Truckee River and at Pyramid 
Lake. They were also necessary to bring all five of the mandatory 
signatory parties to agreement on TROA, as well as to better assure 
inclusion of other parties such as the cities of Reno and Sparks, the 
town of Fernley, and Washoe County.
    At this point, the negotiators of TROA are close to having a draft 
agreement with sufficient specificity and support to form the basis of 
the proposed action required for the Draft Environmental Impact 
Statement. Depending on the results of negotiations scheduled to be 
completed in early May, the negotiators hope to have the draft TROA 
completed and published with a DEIS in mid-June. On that basis, TROA 
should be ready early next year. Reclamation has participated in the 
negotiations, has done a substantial amount of analytic work to assist 
the negotiators, and, with the Fish and Wildlife Service and State of 
California, is co-lead on the EIS.
    In addition to the negotiation of the TROA, Reclamation has been 
involved in the implementation of the various other aspects of Public 
Law 101-618, either directly or through funding arrangements with other 
agencies. These activities include, but are not limited to, the 
publication of the Newlands Project Efficiency Study dated April 1994, 
the Refuge Water Acquisition Program, the transfer of Carson Lake 
Pasture to the State of Nevada, the closure of the TJ Drain, and the 
implementation of the Newlands Project Operating Criteria and 
Procedures, or OCAP. A clear indication of Reclamation's continued 
commitment to the timely implementation of Public Law 101-618 is that 
approximately 70 percent of Reclamation's Newlands and Washoe Projects 
fiscal year 1998 appropriations request is for activities directly 
associated with implementation of Public Law 101-168.
    Question. What is the Bureau's fiduciary trust relationship to the 
Pyramid Lake Tribe in relation to the Settlement?
    Answer. In implementing the settlement, the Department (including 
all of its Bureaus) is working to protect and enhance the Tribal trust 
resources to the fullest extent possible. Reclamation's principal goal 
has been to help the Pyramid Lake Tribe, through the TROA, to secure 
greater control over water used for spawning flows in the springtime 
and for instream flows and water quality in the Lower Truckee River in 
the summer, which is the traditional low-flow period on the river.
    Reclamation is also contributing to protection of the Tribe's trust 
resources by improving fish passage facilities at Marble Bluff Dam on 
the Pyramid Lake Reservation. The Dam is a major bottleneck for passage 
of the endangered cui-ui fish and for Lahontan cutthroat trout. 
Reclamation, working with the Tribe, has designed improvements and 
awarded a contract for their implementation. Construction work is 
scheduled to be started in July of this year, right after completion of 
cui-ui spawning, and be completed before next year's spawning cycle. 
Additionally, Reclamation assists the Department in meeting its trust 
responsibilities by managing, in consultation with the Tribe and the 
Fish and Wildlife Service, Stampede Reservoir for purposes of improving 
spawning flows on the reservation and by administering the Newlands 
Project Operating Procedures and Criteria so that valid water rights 
are met while minimizing the use of Truckee River water.
    Question. Would you say the Bureau has met its obligations?
    Answer. While much remains to be done to discharge Reclamation's 
obligations under the Settlement Act successfully, the Bureau is making 
good progress toward achieving that objective.
    Question. Would you please report back to the committee with an 
assessment of the Bureau's relationship with the tribe and its goals 
and objectives in carrying out its responsibilities.
    Answer. Reclamation is working with both the Pyramid Lake Tribe and 
Fallon Paiute Shoshone Tribe. Reclamation is committed to establishing 
appropriate government-to-government relationships with the Tribes to 
assure timely and meaningful consultation on actions that may have an 
impact on tribal trust assets. In fiscal year 1998, Reclamation will 
continue to pursue the Secretary's trust responsibilities through the 
development of TROA and its associated implementing agreements, the 
administration of OCAP, the improvement of Newlands Project efficiency, 
completion of the Marble Bluff Fish Facility modification, and the 
pursuit of various cooperative agreements to assist the tribes in 
developing and managing tribal resources.
    In addition, Reclamation has worked with both the Pyramid Lake 
Tribe and Fallon Indian Tribe, in order to provide financial and 
technical assistance in mapping project and other facilities on the 
Reservations. Reclamation is providing funding for Fallon tribal 
members to attend short courses on water measurement and modernization, 
in order to assist them in efficiently operating their irrigation 
system and to enable them ultimately to become an independent 
irrigation district. Reclamation is also pursuing similar opportunities 
with the Pyramid Lake Tribe through Reclamation's Water Conservation 
Technical Field Services Program. A Native American Affairs Liaison has 
been established in Reclamation's local field office to assist in 
identifying opportunities for the Tribes to develop their water and 
other natural resources. Local Reclamation staff routinely attend 
tribal council meetings, to better understand governmental procedures 
and tribal concerns. These actions have been pursued in the spirit of 
enhancing the relationship with the Tribes and promoting their active 
participation in decisions affecting their resources.
                        calfed bay-delta project
    Question. I know that the subject of the CALFED Bay-Delta Program 
has probably been raised. I would like to hear about the coordination 
between the agencies involved in this project, particularly in relation 
to the efficient use of federal dollars.
    Answer. Through the creation of a Restoration Coordination Program 
and the Ecosystem Roundtable, the CALFED Bay-Delta Program has 
established a formal means for coordinating new and existing ecosystem 
funding to achieve efficiencies and greater effectiveness. CALFED 
technical staff have identified many Central Valley Project Improvement 
Act, or CVPIA, restoration activities that are closely aligned with 
those of CALFED. They have been working with CVPIA staff in Reclamation 
and the Fish and Wildlife Service on developing joint priorities and 
procedures for the joint solicitation and review of projects to address 
priorities. CALFED staff are also working with other related programs 
such as the Four Pumps Program administered by California Department of 
Water Resources and California Department of Fish and Game, or CDFG, 
and the Tracy Fish Agreement program administered by Reclamation and 
CDFG. This improved coordination should maximize the effectiveness of 
available funding and will help to ``jump-start'' ecosystem recovery.
                                 ______
                                 
                  Question Submitted by Senator Murray
                         pesticide applications
    Question. I have recently received an excellent response from the 
Bureau indicating it intends to undertake a nationwide review of its 
public notification procedures for pesticide applications. I commend 
the Bureau for tackling this difficult, but critical, public health and 
safety question.
    Can you provide the committee additional details on how and when 
that study will proceed?
    Answer. Reclamation has taken steps to initiate a review process 
concerning notification of the public prior to aerial pesticide 
applications on Reclamation-managed lands in the 17 western states. 
Reclamation addressed this issue at the Pest Management Coordinators 
Conference held May 7, 8, and 9, 1997. The agenda included a discussion 
of Reclamation's policies and directives as it relates to public 
notification before the application of aerial pesticides. The 
discussion focused on liability, health, safety and contractual issues 
along with current State and Federal label requirements for public 
notification and reentry intervals. Reclamation officials will be 
briefed on the concerns and ramifications of current and potential 
notification requirements and policies discussed during this meeting to 
determine a course of action.
    If changes in current policy appear warranted, Reclamation will 
circulate draft proposals to the Regions and the field for comment by 
August 1997. Final draft proposals should be developed and sent to the 
field for final review by late September of 1997. Final proposed policy 
and directives should be available for the Commissioner's action in 
late October of 1997.
                                 ______
                                 
                 Questions Submitted by Senator Dorgan
              garrison diversion project, red river valley
    Question. I would like to raise several questions about the 
Garrison Diversion Project. What is the status of studies to determine 
the water supply needs of the Red River Valley?
    Answer. The Phase I portion of the study provides an assessment of 
future water needs including projections of the magnitude and frequency 
of water shortages in the study area located primarily in the North 
Dakota portion of the Red River Valley. The Phase I report will be 
distributed to the public for review and comment the last week of May 
1997. The Phase I Needs Assessment Study identifies at an appraisal 
level the municipalities that will likely experience water shortages 
during episodes of low flow or drought. The study also examines water 
quality concerns of existing water supplies and characterizes the water 
supply situation in the rural sector.
    The next step in the needs assessment is an alternative formulation 
study (Phase II). The Phase II effort which began in March 1997, will 
present an array of alternatives with economic, environmental, and 
operational tradeoffs highlighted. The Phase II alternative formulation 
study will also be performed at an appraisal level. A draft Phase II 
report will be available in March 1998.
                      southwest pipeline and north
                     valley-walhalla water project
    Question. The fiscal year 1998 funding request for the Southwest 
Pipeline is a reduction from fiscal year 1997. This will hamper plans 
for Garrison Diversion to deliver a reliable supply of quality water to 
North Dakota. I am particularly concerned that not enough funding has 
been requested to complete the Southwest Pipeline to provide drinking 
water to communities that do not presently meet safe drinking water 
standards. Communities failing to meet safe drinking water standards 
would suffer health consequences and have to pay substantial fines. Can 
you identify some of the planned components of the project that will 
not be funded at the requested level?
    Answer. Reclamation's funding request for the Garrison MR&I grant 
program is not tied to specific projects. The grant program is 
administered cooperatively by the Garrison Diversion Conservancy 
District and the North Dakota State Water Commission. Based on their 
ranking of priorities, we anticipate that the Southwest Pipeline may 
receive some Federal funding in fiscal year 1998 at the level requested 
in the budget.
    Funding for water service to the cities of Neche and Hebron and 
their surrounding rural residents would be delayed until fiscal year 
1999.
                            oakes test area
    Question. One key element of the Garrison Diversion Project has 
been the development of environmentally responsible irrigation systems. 
North Dakota Test Area's arid climate and soil types make research into 
this area of great importance. The Oakes Test Area has been an 
essential component in the research. We have requested an additional 
$500,000 for the Oakes Test Area to continue this research. Given the 
administration's proposal that the state take over responsibility for 
the test area, what are the administration's plan for development of 
environmentally sensitive and fiscally responsible irrigation systems?
    Answer. Initial water deliveries through the Oakes Test Area 
distribution system were made in 1988. In 1990, in response to 
discussions with the delegation, the Secretary of the Interior 
established a task force to evaluate future funding support for the 
Garrison Diversion Unit specific to the Oakes Test Area. The task group 
recommended that studies be continued through 1995 to complete the 
eight-year research program. The original research objectives and 
purposes of the Oakes Test Area have been met to the extent possible, 
given the changes in the Garrison Diversion Unit since the Oakes Test 
Area research conception. Therefore, in 1995, Reclamation decided to 
propose that Congress transfer title of the Oakes Test Area or abandon 
the facilities.
    Discussions regarding title transfer were ongoing. In 1996, 
Reclamation executed a water service contract with the Dickey-Sargent 
Irrigation District for the delivery of water in the Oakes Test Area. 
Funding of research activities, however, was discontinued. Discussions 
regarding transfer of title are continuing between Reclamation and the 
Garrison Diversion Conservancy District. However, progress has been 
disappointing and at least two substantial obstacles have been 
encountered. There has been inability or unwillingness by the local 
landowners (i.e., Dickey-Sargent Irrigation District) to assume the 
full costs of operation and maintenance of the system. The Garrison 
Conservancy District advanced a proposal suggesting that the United 
States bear future costs by establishment of an $8.5 million operating 
fund. This proposal is contrary to Reclamation's title transfer policy 
and to a basic requirement of Reclamation law that O&M of facilities 
not be subsidized.
    No Reclamation, non-Indian irrigation facilities are under 
development in North Dakota at this time. In February 1990, The 
Department of the Interior Office of Inspector General released the 
1990 Audit Report on Garrison Diversion Unit Cost Allocations. The 
report concluded that ``the operating costs assigned to irrigators will 
exceed their ability to pay because the project as reformulated does 
not appear to be financially feasible.'' The inability to pay O&M 
costs, at a minimum, prohibits execution of repayment contracts, and 
the 1986 Garrison Diversion Unit Reformulation Act prohibits the 
obligation of funds to construct non-Indian irrigation facilities until 
a contract(s) providing for payment of costs allocated to irrigation 
has been properly executed. The previously mentioned Garrison Diversion 
Unit Task Group Report recommended no further support for Federal 
funding of non-Indian irrigation facilities.
    Reclamation continues to work on studies related to the Turtle Lake 
Irrigation and Wildlife Development Area, as directed by the North 
Dakota Water Management Collaborative Process. In 1992, Reclamation in 
cooperation with Federal, State, and local organizations, prepared a 
conceptual plan for the development of the Turtle Lake area. The goal 
of that study was to develop a plan which placed equal emphasis on 
irrigated agriculture, wildlife, and recreation. Reclamation is 
currently completing an analysis of economic benefits associated with 
the Turtle Lake area and is working with the Turtle Lake Irrigation 
District to identify a small area for demonstrating the viability of 
the concept.
                              indian mr&i
    Question. Recognizing the need for quality water on reservations, 
Indian MR&I was added to the Garrison Reformulation Act of 1986. The 
Reformulation Act authorized irrigation of 60,000 acres and $20.5 
million for design and construction of MR&I projects on the Fort 
Berthold, Standing Rock, and Fort Totten reservations. The needs of the 
tribes are tremendous. What is the administration doing to ensure that 
the water needs of the tribes are met?
    Answer. The Reformulation Act authorized $20.5 million for the 
design and construction of Phase I MR&I facilities on the Standing 
Rock, Fort Berthold, and Fort Totten Indian Reservations. This ceiling 
was later amended in 1992 to allow for cost indexing and was 
subsequently raised to $24.3 million. These funds were allocated among 
the three Tribes to meet the most immediate domestic water needs and to 
provide service to as many residents on the reservations as possible. 
Each of the three Tribes, through Public Law 638 Indian Self 
Determination contracts with Reclamation, completed facilities under 
the Phase I funding ceiling. The $24.3 million ceiling has been 
reached. However, some facilities originally identified to be 
constructed on the Fort Berthold and Fort Totten Reservations under 
Phase I were not able to be completed within the ceiling.
    At the time the Reformulation Act was passed, Congress recognized 
that the original appropriation ceiling was not adequate to meet all 
the reservation-wide needs of the three reservations and that 
additional spending authority may be needed. The Secretary of the 
Interior was directed to keep Congress advised of this situation and to 
return to Congress if additional authorization for these water systems 
was needed. In 1994, Reclamation began working with the Tribes to 
conduct Needs Assessments and Feasibility Studies of MR&I facilities 
that would be constructed under Phase II to meet the remaining 
reservation-wide needs. These studies were completed in March 1997. At 
the request of the Tribes, and based on the findings of the Phase II 
Needs Assessment and Feasibility Studies, Reclamation is participating 
in discussions regarding amendments to the 1986 Reformulation Act to 
provide additional authorization of appropriations for construction on 
the three reservations.
    Question. Currently there is an outstanding need of $1 million on 
the Fort Totten reservation to finish phase I of their MR&I proposal. 
What are the administrations plans to ensure the Phase I moves forward 
as planned?
    Answer. The remaining MR&I facilities necessary to meet the 
reservation-wide domestic water needs, that were not completed within 
the Phase I appropriation ceiling, have been included in the findings 
of the Needs Assessment and Feasibilities studies. Since the Phase I 
appropriation ceiling was reached in fiscal year 1997, Reclamation's 
fiscal year 1998 budget request did not include funds for the Garrison 
Diversion Unit Indian MR&I program. However, there are several Phase I 
facilities that are still under construction that may be completed by 
the Tribes on their own. These facilities include the Crow Hill 
pipeline and the Casino pipeline on the Fort Totten Reservation, and 
the Four Bears and Twin Buttes Treatment Plants on the Fort Berthold 
Reservation.
    Question. What additional funds need to be appropriated to meet the 
long-term needs for Indian MR&I?
    Answer. The total additional funding need identified by the Needs 
Assessment and Feasibility studies for the three reservations is $220 
million.
    Question. Follow Up: How long would it take to complete authorized 
Indian MR&I with that level of funding?
    Answer. The Tribes consultants have established preliminary 
construction schedules to complete Phase II construction over a 10 year 
period. This construction schedule may change as the Tribes' 
consultants complete the Final Engineering Reports.
                            reverse osmosis
    Question. Please provide the committee with a report that fully 
documents all of the Bureau's current and past reverse osmosis 
activities, including the nature of those activities, the outcomes, and 
all of the associated costs.
    Answer. Reclamation invested in research in addition to the design 
and construction of the Yuma Desalting Production Plant, from 1975 
through 1982. This facility utilizes the reverse osmosis technology, 
which was an innovative technology during facility design. Therefore, 
considerable investment was made in the research testing of this 
technology prior to the design and construction of that facility. The 
actual investment in that testing is estimated to be $2.4 million in 
1997 dollars. This early testing of reverse osmosis by the Federal 
Government, along with efforts in the private sector, has had a 
significant impact. Reverse osmosis is now a proven and popular 
technology for desalting brackish water in many locations, as is 
evident by its use in roughly 200 communities nationwide (primarily in 
coastal areas of the United States), and in thousands of brackish water 
and sea water plants world-wide. However, the technology is still 
unaffordable to most people.
    The present research program in support of water treatment 
technologies was created in fiscal year 1992. It includes desalination, 
and is called the Water Treatment Technology Program. Since that date, 
the appropriations specifically dealing with reverse osmosis technology 
have amounted to approximately $2,350,000. By 1992, reverse osmosis was 
a proven technology, so the projects have been primarily directed at 
improving the technology, and making the technology more cost-
effective. Some of the project outcomes can be found in the following 
reports:
    ``The Desalting and Water Treatment Membrane Manual'', USBR WTTP 
Report # 1
    ``Vari-RO Low Energy Desalting for the San Diego Region'', USBR 
WTTP Report # 4
    ``Zeta Potential of Reverse Osmosis Membranes'', USBR WTTP Report # 
10
    ``Eastern Municipal Water District RO Treatment/Saline Vegetated 
Wetlands Study'', USBR WTTP Report # 16
    ``Reverse Osmosis Membranes Raman and FTIR Molecular Spectroscopic 
Measurements'', USBR WTTP Report # 20
    ``Using Raman Microprobe Spectoscopy to Detect Chemical Changes 
Accompanying the Degradation of Cellulose Acetate Reverse Osmosis 
Membranes'', USBR WTTP Report # 21.
                       freeze-thaw demonstration
    Question. What is critically needed at this point in a larger-scale 
field demonstration of the Freeze-thaw technology--at least 100,000 
gallons a day--to gain approval of the process by federal regulatory 
agencies and to evaluate its technical and economic potential as a 
long-term source of water for industrial, agricultural, and domestic 
use?
    Answer. Reclamation is currently working with the University of 
North Dakota to assist with the planning associated with construction 
of a project of this size. Since a new field site has been identified, 
the original project plan will need to be modified. Additionally, 
before proceeding with the construction, the contractor will need to 
acquire appropriate approvals and permits to ensure compliance with 
NEPA requirements and various State and local regulations.
                      DEPARTMENT OF DEFENSE--CIVIL

                         Department of the Army

                       Corps of Engineers--Civil

STATEMENT OF H. MARTIN LANCASTER, ASSISTANT SECRETARY 
            OF THE ARMY FOR CIVIL WORKS
ACCOMPANIED BY:
        LT. GEN. JOE N. BALLARD, CHIEF, U.S. ARMY CORPS OF ENGINEERS
        MAJ. GEN. RUSSELL L. FUHRMAN, DIRECTOR OF CIVIL WORKS, U.S. 
            ARMY CORPS OF ENGINEERS

                           opening statement

    Senator Domenici. Next, we have the Corps, Assistant 
Secretary Martin Lancaster, General Ballard, and General 
Fuhrman, Director of Civil Works. Let me first say that my 
ranking member, Senator Reid, could not be here for the reasons 
he has stated, but he has a series of questions that I will 
submit in his behalf. I would appreciate your answering those. 
I do not think I am going to comment on the Corps. We have had 
an opportunity to talk with you individually, and we are short 
on time, so why do we not proceed.
    Mr. Secretary.
    Mr. Lancaster. Thank you, Mr. Chairman, and members of the 
subcommittee. We will be very brief in recognition of the time 
constraints this morning. I do have with me a new Corps of 
Engineers team whom you have met individually, but this is the 
first time for Lt. Gen. Joe Ballard, the new Chief of 
Engineers, to testify, and the new Director of Civil Works, 
Maj. Gen. Russ Fuhrman, and Fred Caver, the Chief of Programs 
Management Division.
    On February 6, the President submitted his budget. We are 
very pleased that it provides for a steady level of funding for 
the Corps of Engineers for this year and for the out-years. 
This is good news for the Corps which enables us to more 
accurately predict funding availability and better plan for the 
future.

                   full funding of new water projects

    The 1998 budget does propose a transition to full upfront 
funding of all civil works projects with two new proposals. The 
first proposal is to up front full fund all new starts, and, 
for those projects which will be completed before the year 
2002, to do advance appropriations so that the funds are 
available at the time needed for those projects.
    These proposals, full up-front funding of new starts and 
full funding through advance appropriations for projects 
nearing completion, will allow construction to proceed on a 
predictable and efficient schedule, resulting in savings to 
both the non-Federal sponsors and to the Federal Government.

             fiscal year 1997 emergency flood supplemental

    Mr. Chairman, in light of the situation in the upper 
Midwest, and before I begin my detailed 1998 appropriations 
testimony, I do think it is appropriate for me to very briefly 
talk about the supplemental requests which are pending before 
the Congress.
    On March 19 the President transmitted to Congress a request 
for emergency supplemental appropriations for 1997. This 
request included $321.2 million for the Civil Works Program. 
The President's request for the Civil Works Program was 
subsequently updated to $432 million, due to estimates of costs 
related to recent floods that are still plaguing parts of the 
country.
    Of this amount, $232 million would fund repairs to eligible 
nonfederally maintained levees and other flood and storm damage 
reduction facilities, through the FCCE account, in States 
affected by floods. This amount would also fully fund up front 
the design and construction of the emergency outlet works at 
Devils Lake, ND.
    In addition, the President's updated request would provide 
$75 million for contingencies, to become available upon request 
of the President, to respond to flooding from spring snow melt 
and rainfall, which has already occurred in the Ohio River and 
lower Mississippi River basins, and of which more can be 
anticipated in the upper Midwest. The President's March 19 
request included $39 million, which subsequently has been 
updated to $112 million, to finance repairs to the Corps' 
projects damaged in the late 1996 and early 1997 timeframe, as 
well as to restore the gulf coast navigation channels damaged 
by tropical storms. The updated request also would provide $13 
million for the flood control, Mississippi River and 
tributaries account.
    To finance immediate needs until Congress acts on the 
President's emergency supplemental appropriations request, we 
have reprogrammed funds previously scheduled for 1997 through 
the fourth quarter of this year. Unfortunately, we have run out 
of those opportunities, and I am submitting today a letter to 
the Congress notifying you that I am exercising my emergency 
authority to transfer 1997 appropriations from other civil 
works accounts to ensure a prompt response to these emergency 
situations.

                    fiscal year 1998 budget request

    Now back to our 1998 budget request. This request would 
fund a program that balances a number of high priority 
interests and objectives: Investments in water resources 
infrastructure development are balanced with investments in 
watershed and other environmental restoration; continued 
funding to complete ongoing projects and studies is balanced 
with investment in new high priority infrastructure and 
environmental projects; continued maintenance and 
rehabilitation of existing projects is balanced with 
construction of new water resources development projects to 
serve society's current and future needs.
    The 1998 budget continues our historical role as a problem 
solver for the Nation. It includes $380 million to fully fund 
the Federal share of the proposed new investments, including 
$15 million to fully fund an unspecified number of new starts 
in the Continuing Authorities Program.
    Moreover, in the planning targets for the Civil Works 
Program for fiscal years 1999 through 2002, the amount of $200 
million annually is set aside to fully fund the Federal share 
of new starts.
    The 1998 budget provides full upfront funding for the 
following new investments: 10 new surveys, 7 regular 
construction new starts, 2 major rehabilitation new starts, 2 
resumptions of previously started construction, and 1 dam 
safety assurance new start.
    The 1998 budget request proposes funding for several 
provisions of WRDA 1996, including two new starts, the American 
River flood damage reduction project and the Everglades and 
south Florida ecosystem restoration project, as well as $2 
million for section 206, aquatic ecosystem restoration, a new 
program in WRDA 1996.
    Overall the budget includes $120 million for restoration of 
the Everglades and south Florida ecosystem, and we hope that 
the funds will be accelerated to initiate important, critical 
restoration projects of that authorization.

               columbia river fish mitigation, OR and WA

    The 1998 budget requests $164.3 million for Corps 
activities relating to salmon species indigenous to the 
Columbia River basin, including $127 million for the fish 
mitigation project.

                  reprogramming of available resources

    Throughout the year, the Army advises the appropriations 
subcommittees of plans to reprogram funds among projects to 
more efficiently use available funding. In the current funding 
constrained environment, we need to give priority in 
reprogramming to payments owed to current contractors. We may 
be limited somewhat in this regard, and the Corps may not have 
the ability to take advantage of other opportunities to 
expedite work, or in some extreme cases to even maintain 
announced schedules.
    The Corps' ability to reprogram funds is more critical than 
ever when funding is constrained and when unexpected 
expenditures occur, as we have seen so often this year. Your 
continued support for the Corps' current reprogramming 
authority is essential to maintain this management flexibility.
    In conclusion, I would emphasize my commitment to work with 
this subcommittee, others in Congress, the broader array of 
interests within the administration, and the non-Federal 
partners of civil works projects to develop a new consensus on 
priorities for our program. This is necessary to ensure that 
the Army Corps of Engineers continues to serve the vital 
interests of the Nation by providing efficient, priority 
investments in public infrastructure and environmental 
restoration. Moreover, it must be achieved in a way that 
supports and contributes to the President's commitment to 
balance the Federal budget.
    Thank you, Mr. Chairman, and members of the subcommittee. 
We would appreciate the full text of my statement be included 
in the record at this point.
    [The statement follows:]

               Prepared Statement of H. Martin Lancaster

                              introduction
    Mr. Chairman and Members of the Subcommittee: Thank you for the 
opportunity to testify today on the President's fiscal year 1998 budget 
for the Civil Works program of the Army Corps of Engineers. 
Accompanying me are Lieutenant General Joe N. Ballard, the Chief of 
Engineers; Major General Russell L. Fuhrman, the Director of Civil 
Works; and Mr. Thomas F. (Fred) Caver, the Chief of the Civil Works 
Programs Management Division.
    On February 6th, the President transmitted to Congress his budget 
for fiscal year 1998, along with planning targets for the out-years. 
This five-year budget plan was developed with the objective of 
balancing the Federal budget by fiscal year 2002. Like last year, the 
President's plan for balancing the budget shows that the funds 
available for domestic discretionary spending must continue to decline. 
Notwithstanding this, the President's budget supports a relatively 
steady funding level for the Civil Works program. This is good news, 
which will enable the Army Corps of Engineers to more accurately 
predict funding availability and better plan for the future.
    My statement will cover the following subjects: An overview of the 
fiscal year 1998 Civil Works budget; The Government-wide fixed assets 
initiative; Balance among high priority interests and objectives; 
Proposed new investments and continuing program highlights; and 
Efficient and effective delivery of Government services.
                overview of the army civil works budget
Fiscal Year 1998 Civil Works Budget
    The President's fiscal year 1998 budget includes $3.7 billion in 
new discretionary Energy and Water Development appropriations for the 
Army Civil Works program. This amount exceeds the fiscal year 1997 
appropriations by about $180 million. Because of proposed changes in 
financing procedures for new starts, the amount to be spent during 
fiscal year 1998 is approximately $280 million less than the fiscal 
year 1997 level. Also, in order to offset increases necessary in other, 
priority programs of the President, the Administration proposes to 
cancel $50 million of fiscal year 1997 appropriation in the 
Construction, General, account. This would reduce outlays by an 
estimated $30 million in fiscal year 1997 and $20 million in fiscal 
year 1998.
    In addition to the discretionary appropriations, the fiscal year 
1998 program reflects the transfer of $44 million from the Coastal 
Wetlands Restoration Trust Fund, $13 million in mandatory permanent 
appropriations, and $123 million in non-Federal cash contributions from 
project cost sharing sponsors, through the Rivers and Harbors 
Contributed Funds account. Over 20 percent of the overall fiscal year 
1998 Civil Works program would be derived from user fees or non-Federal 
contributions.
    The new appropriations request is distributed as follows: $150 
million for General Investigations; $1.39 billion for Construction, 
General; $1.62 billion for Operation and Maintenance, General; $112 
million for the Regulatory Program; $266 million for Flood Control, 
Mississippi River and Tributaries; and $162 million for other accounts. 
Table A, attached to this statement, shows the Civil Works budget by 
account and source of funding, including anticipated non-Federal 
contributions.
Emergency Supplemental Appropriations Request
    The Corps of Engineers has been almost continuously engaged in 
fighting the severe floods experienced in recent months in California 
and Pacific Northwest states, in the Ohio River and Lower Mississippi 
River basins and, most recently, in the Missouri River and Red River 
basins in the Dakotas and Minnesota. The Corps also continues working 
closely with other Federal and state agencies in the flood recovery 
efforts. The Corps currently is financing its emergency operations out 
of carryover funding from prior emergency supplemental appropriations 
and through reprogramming funds from other Federal projects in the 
Operation and Maintenance, General, account to provide for immediate 
response in flood damaged navigation channels and other projects. I am 
prepared to approve the transfer of funds among Corps accounts to 
finance emergency activities if necessary, despite the potentially 
severe adverse impacts throughout the fiscal year 1997 program.
    On March 19, the President transmitted to Congress a request for 
emergency supplemental appropriations, which included $321.2 million 
for the Army Corps of Engineers. This request subsequently has been 
modified by updated estimates of costs related to recent flood 
disasters in the Ohio River basin, lower Mississippi River basin and 
the Upper Midwest, bringing the total request to $432 million. Of that 
amount, $232.2 million would be appropriated to the Flood Control and 
Coastal Emergencies account to finance repairs to non-Federally 
maintained levees and other facilities damages by the recent floods in 
California and the Pacific Northwest, as well as to fully finance the 
design and construction of emergency outlet works at Devil's Lake, 
North Dakota. In addition, the Administrations's updated request 
includes a contingency amount of $75 million, to become available upon 
the request of the President, to finance responses to flooding from 
rainfall and snowmelt already experienced in the regions I mentioned, 
as well as that anticipated later this spring. Emergency supplemental 
appropriations of $111.8 million are proposed in the President's 
updated request for the Corps' Operation and Maintenance, General, 
account to finance repairs to certain Corps facilities damaged by the 
1996 and 1997 floods and to restore navigation to channels damaged last 
winter by tropical storms. In addition, $13 million is needed for the 
Mississippi River and Tributaries account for flood response and 
repairs necessitated by flooding in recent weeks.
Sacramento and San Joaquin River Basins Comprehensive Study
    On March 6, I wrote to this subcommittee advising you of the Army's 
plan to reprogram fiscal year 1997 funds in the General Investigations 
account to initiate a broad study in response to the emergency 
situation in California and adjoining states. We are envisioning a 
Comprehensive Basin Investigation of flood damage reduction and 
associated environmental restoration in the Sacramento and San Joaquin 
River basins in California. This study would give us a better 
perspective on current flood facility capacities and operations, levee 
stability, flood bypass systems, and water uses within the basins. The 
overall scope and cost of this study are still under development.
    Related to this study, the Corps will apply available fiscal year 
1997 funding under the Flood Plain Management Services program to 
undertake a Small Communities Investigation that specifically addresses 
flood damage reduction solutions for smaller communities within the 
flood affected areas, particularly in California and Nevada. These 
studies are scheduled to be completed within two years.
Joint Study of the Cumberland and Tennessee Rivers
    The fiscal year 1998 budget proposes to initiate in fiscal year 
1997 a joint study by the Corps and the Tennessee Valley Authority of 
their respective activities on the Cumberland and Tennessee Rivers. The 
objective of the study would be to submit to OMB by September 1, 1997, 
a report and recommendations on management arrangements by which these 
activities could be integrated, in order to improve the operation of 
the river systems for navigation, flood damage reduction, the 
production of electric power, recreation and other public benefits and 
reduce the costs of such operations to both taxpayers and electricity 
customers. The cost of the study would be borne equally by TVA and the 
Corps, with the Corps' share being financed out of available fiscal 
year 1997 funds in the Operation and Maintenance, General, 
appropriation account.
                government-wide fixed assets initiative
    For many years, most Federal capital acquisitions have been fully 
financed up front, as required by OMB Circular A-11. Requiring full 
funding of projects, or useful segments of projects, is expected to 
improve Federal project programming and accountability for meeting 
cost, schedule and performance goals across the Government. Previously, 
water projects were exempt from this requirement. However, the practice 
of full funding has benefits, especially to local sponsors and Federal 
project managers, that warrant its use for water projects as well. The 
fiscal year 1998 budget proposes a transition to full funding of all 
Civil Works acquisition of fixed assets with two new proposals.
Full Up-front Funding of New Starts
    The first proposal for change in financing Civil Works projects in 
the fiscal year 1998 budget is full up-front funding of the Federal 
share of seven regular construction new starts, five items of other new 
construction work, and a number of construction new starts in the 
Continuing Authorities Program (CAP). Full up-front funding will allow 
these projects to proceed on the most efficient schedules, improving 
the Corps' ability, as well as that of non-Federal sponsors, to manage 
the completion of projects on time and within budget. Funds proposed to 
be appropriated in fiscal year 1998 for these projects would remain 
available until project completion, thus avoiding slowdowns some 
projects have experienced when insufficient incremental funding has 
been available.
Advance Appropriations for Ongoing Projects with Near-term Completions
    The second proposal involves appropriation during fiscal year 1998 
of amounts required in each year from fiscal year 1999 through fiscal 
year 2002 to fully fund the Federal balance to complete 65 continuing 
projects scheduled for completion during that time frame. These advance 
appropriations would become available for obligation in the year 
specified, which would provide the Corps and sponsors of these projects 
greater predictability in managing the schedules and costs to complete 
them and bring their benefits on-line.
Incremental Budgeting for the Other Projects Under Construction
    Continuing projects with completion dates of 2003 or beyond, 
including 105 projects in the Construction, General, account and all 
projects in the Flood Control, Mississippi River and Tributaries 
(MR&T), account are budgeted incrementally, based on estimated annual 
requirements to complete the projects. For these projects in the 
Construction, General, account, the remaining Federal cost of 
construction after fiscal year 1998 is $13.6 billion. For similarly 
funded projects in the MR&T account, the remaining Federal cost of 
construction after fiscal year 1998 is $4.9 billion.
          balance among high priority interests and objectives
Balance of Priorities in the fiscal year 1998 Budget
    The fiscal year 1998 budget would fund a program that balances a 
number of high priority interests and objectives. This budget balances 
investments in water resources infrastructure development--principally 
commercial navigation and flood damage reduction--with investments in 
watershed and other environmental restoration. It balances continued 
funding to complete ongoing projects and studies with investments in 
new, high priority infrastructure and environmental projects. 
Similarly, it balances the continued maintenance and rehabilitation of 
existing projects with the construction of new infrastructure that will 
serve society's current and future needs.
Budget Allocations for Future New Investments
    For the past several years, the Army has been engaged in continuing 
discussions within the Administration concerning the importance of a 
regular program of new investments in the Civil Works program. This 
would enable the Corps to maintain and improve its technical 
capabilities and to continue its historical role as a problem solver 
for the Nation. This year, not only does the budget include a wide 
variety of important new starts, but the Administration has directly 
addressed the larger issue in its five-year planning targets for the 
Civil Works program.
    In the fiscal year 1998 budget, the Administration has addressed 
this issue in a way that assures adequate funding for the completion of 
proposed fiscal year 1998 new starts, fully funded under the Fixed 
Assets Initiative, and in the near term reasonable trade-offs among 
priorities for the ongoing program. We are hopeful that we can engage 
Congress in discussions on the future priorities and program levels 
that are appropriate for the Civil Works program, in the context of the 
current budgetary constraints.
    Concerning the larger issue of the role of the Corps as a national 
problem solver, in the planning target for the Civil Works program for 
each year from now until fiscal year 2002 is an amount set aside for 
new starts in studies, projects, major rehabilitations and other new 
work. The amount reserved for new work in the fiscal year 1998 budget 
is $380 million, which would fully fund up front the Federal cost of 
the proposed new starts, including those in the Continuing Authorities 
Program. The planning target for each future year includes a new 
investment amount of $200 million to fully fund new investments to be 
identified and proposed for that year.
          summary of the fiscal year 1998 civil works program
                      new civil works investments
New Starts and Other New Work
    The budget provides for initiation of specifically authorized new 
Civil Works investments with a remaining cost of $547 million, of which 
the non-Federal share is $182 million. Full funding of the remaining 
Federal cost of $365 million to complete these investments is included 
in the fiscal year 1998 budget. In addition, the budget provides for 
full funding of an unspecified number of new starts in the Continuing 
Authorities Program (CAP) and Section 1135 program with a remaining 
Federal cost of approximately $15 million.
    The new investments included in the fiscal year 1998 budget are 10 
new surveys; seven construction new starts; two major rehabilitation 
new starts; two resumptions of previously started construction; and one 
dam safety assurance new start. Of the seven regular construction new 
starts, two are for flood damage reduction, three are for commercial 
navigation, and two will provide environmental restoration. Attached to 
this statement is a table listing the new construction work funded in 
the fiscal year 1998 budget (see Table B). The weighted average 
remaining benefit-to-cost ratio for these new investment is estimated 
to be 2.1 to one.
Water Resources Development Act (WRDA) of 1996
    The fiscal year 1998 budget proposes funding for several provisions 
of WRDA 96. Two of the new starts in the Construction, General, program 
were authorized in WRDA 96. One is the American River flood damage 
reduction project, for which the $47.5 million Federal share is 
proposed to be fully funded up front. This project would stabilize and 
raise levees along the lower Sacramento River and the east side of the 
American River, providing much needed flood protection for the 
Sacramento area. The other new start authorized in WRDA 96 is the $75 
million Everglades and South Florida Restoration program authorized in 
Section 528 of WRDA 96, which will enable the Corps to proceed 
expeditiously with small, but critical, activities consistent with the 
restoration program endorsed by the interagency South Florida Task 
Force. Both of these new authorizations are fully funded up front in 
the fiscal year 1998 budget.
    The budget would provide $2 million for Section 206 of WRDA 1996, a 
new program for Aquatic Ecosystem Restoration which authorizes the 
Corps to pursue projects determined to improve the quality of the 
environment, to be in the public interest, and to be cost effective. 
The Section 206 program is an important addition to the ongoing 
environmental restoration activities in the Civil Works program, 
because it allows the Corps to pursue small aquatic restoration 
projects not necessarily associated with an existing Civil Works 
project, provided that a non-Federal sponsor agrees to provide the 
necessary cost sharing, including all operation, maintenance, 
replacement and rehabilitation.
    Other WRDA 1996 provisions initially funded in the fiscal year 1998 
budget include the following: Section 202, which authorizes the Corps 
to enter into an agreement with the National Academy of Sciences to 
conduct a study of the Corps' use of risk-based analysis; Section 212, 
which authorizes the Corps to undertake surveys, plans and studies for 
the development of engineering and environmental innovations of 
national significance; Section 215, which reauthorizes the Corps' 
Inventory of Dams program; Section 234, which authorizes the Corps to 
engage in activities in support of other Federal agencies or 
international organizations to address problems of national 
significance; and Section 510, which authorizes the Corps to expand its 
environmental assistance to non-Federal interests in the Chesapeake Bay 
watershed.
                     continuing program highlights
General Investigations
    Improving the planning process.--The diligent effort that has been 
underway for the past year to streamline the Corps study process is 
continuing. The majority of the new fiscal year 1997 new reconnaissance 
studies and all of the proposed new fiscal year 1998 studies are funded 
at $100,000 and are scheduled for expedited completion. Policy and 
procedural changes to shorten the time and reduce the cost of the 
feasibility phase of studies will be implemented very soon. In 
addition, we intend to take maximum advantage of the findings of a two-
year assessment by a panel of the National Academy of Sciences of the 
Corps' investment decision process, for which the Corps entered in a 
contract with the Academy in November 1996.
    Seamless funding for new preconstruction engineering and design 
activities.--Under the ``seamless funding'' practice followed in recent 
years, the budget also includes funding to proceed into the PED phase 
on 17 projects for which feasibility studies currently are underway. 
For one of these PED's, which addresses inland navigation, the 
feasibility study was Federal financed. The other 16 follow from cost 
shared feasibility studies scheduled for completion before the end of 
fiscal year 1998.
    Concurrent non-Federal financing for PED and other new design 
efforts.--In the Civil Works budget last year, the Administration 
proposed to reduce the budgetary impact of new PED efforts, in the 
short-run, and guarantee sponsor commitment to costly new engineering 
and design efforts, in the long run, by requiring concurrent financing 
by non-Federal project sponsors of 25 percent of the costs of new PED 
efforts. This represented a change from the past practice of Federally 
financing PED costs and then recovering the non-Federal share during 
the construction phase. We can no longer afford the luxury of federally 
financing all of these costs. In implementing this policy during fiscal 
year 1997, we have executed one PED financing agreement, with more than 
20 additional agreements scheduled for execution later in the year.
    The fiscal year 1998 budget would continue this concurrent 
financing policy for new PED activities. All new PED's are budgeted at 
75 percent of their expected fiscal year 1998 cost, based on the policy 
that the non-Federal sponsors will concurrently finance the remaining 
25 percent. Adjustments to reflect final project cost allocations will 
be made to ensure the overall cost sharing for each project is 
consistent with applicable law.
    Fairness to non-Federal sponsors who agree to concurrently finance 
their share of budgeted PED's requires that we also apply this policy 
to any new PED project added to the General Investigations account by 
Congress, as well as to comparable activities which may be added by 
Congress in other accounts.
    Research and development (R&D).--The Secretary of the Army has 
placed a high priority on R&D throughout the Army. Consistent with this 
priority, the fiscal year 1998 program includes $37 million for R&D 
funded through the General Investigations account. Aggressive R&D 
effort can help us to improve efficiency and effectiveness of the Civil 
Works program by developing technologies and techniques that offer 
significant savings and greater reliability, safety, and overall 
effectiveness of our Civil Works projects. For example, the Innovative 
Design and Construction Techniques for Navigation Projects Research 
Program will develop the needed guidance for the implementation of 
innovative concepts that will result in rapid construction and 
modernization of navigation projects, at much reduced cost and with 
minimal impact to navigation and the environment during construction. 
Development of cost-reducing design and construction techniques will 
permit the construction and modernization of more navigation projects 
with limited funds in the Inland Waterways Trust Fund and will reduce 
the potential for major disruptions in inland navigation during periods 
of construction, thus decreasing operating costs to the Nation's inland 
navigation industry.
Construction, General
    The budget provides for continued construction of 170 individually 
authorized projects, of which 65 are proposed to receive advance 
appropriations through fiscal year 2002 for project completion and 106 
are proposed to be incrementally funded through annual budgets. 
Remaining items in the Construction, General account continue to be 
budgeted incrementally, except for new construction starts in the 
Continuing Authorities Program and Section 1135. Highlights of the 
Construction, General continuing program for fiscal year 1998 follow.
    South Florida ecosystem restoration.--The fiscal year 1998 budget 
includes $120 million, within the total funding for associated 
projects, for the restoration of the Everglades and South Florida 
ecosystem, a major environmental activity to which we are committed. 
This amount includes $75 million to fully fund Section 528 of WRDA 
1996, as discussed above. It also includes $3 million to continue the 
Kissimmee River Restoration project. The enactment of WRDA 1996 was an 
important milestone in the restoration of the Everglades and South 
Florida ecosystem. That legislation specifies responsibilities, time 
frames and cost sharing for the Corps and for the non-Federal sponsor 
for the restoration, preservation and protection of the ecosystem in 
the vicinity of the Central and Southern Florida project. The Act also 
codifies in Federal law the South Florida Ecosystem Restoration Task 
Force, which has been so effective in bringing Federal and State 
agencies and private interests together in the development of a 
restoration plan. On April 21, I notified this Subcommittee of the 
Army's plan to reprogram $1.2 million of fiscal year 1997 funds to 
accelerate the initiation of this important effort, which would 
expedite certain activities identified in other, ongoing South Florida 
activities as having particularly high priority.
    Pacific Northwest salmon program.--The fiscal year 1998 budget 
includes $164.3 million for Corps activities relating to salmon species 
indigenous to the Columbia River Basin. That amount is financed through 
several different appropriation accounts. The largest item in this 
program is the Columbia River Fish Mitigation project, for which $127 
million is budgeted to continue the construction of fish bypass 
improvements at eight Corps dams on the Columbia and Snake Rivers and 
to continue the mitigation analysis, which evaluates additional 
measures to increase fish survival at those dams. This includes more 
than $30 million for Bonneville Dam surface bypass and outfall 
monitoring facilities and more than $13 million for surface bypass 
facilities at Lower Granite Dam. This project is responsive to the 
National Marine Fisheries Service's March 1995 Biological Opinion for 
operation of the Federal Columbia River Power System. The amount 
requested is consistent with the Memorandum of Agreement executed in 
September 1996 among the Departments of the Army, Commerce, Energy and 
the Interior, concerning the financial commitment of the Bonneville 
Power Administration for Columbia River Basin fish and wildlife costs.
    Continuing Authorities Program.--The Administration has included 
$50 million in the fiscal year 1998 budget for a full program of 
continuing and new work. In this budget, we propose that $8 million of 
the request be applied to fully fund the Federal snare of fiscal year 
1998 construction starts. These funds will be committed when initiation 
of construction is approved. This provides for treatment of new 
construction starts in this program in a way comparable to treatment of 
individually authorized construction new starts. Full funding will 
ensure that those projects funded for construction can proceed on 
optimal construction schedules, ultimately producing savings for both 
the sponsor and the Federal Government. It also avoids potential 
problems which could arise in the future, considering the constrained 
funding environment in which the Federal Government now operates, such 
as insufficient funding to continue construction of all projects that 
have been started.
    Section 1135 environmental modifications.--The fiscal year 1998 
budget includes $21.2 million for the program authorized by Section 
1135 of the Water Resources Development Act of 1986, as amended. This 
amount includes $7 million to fully fund the Federal share of fiscal 
year 1998 construction new starts. The program provides for ecosystem 
restoration either by directly modifying the structures and/or 
operation of water resources projects constructed by the Corps or, as 
the authority was expanded by WRDA 96, by restoring areas where a Corps 
project contributed to the degradation. Since the initial funding for 
the Section 1135 program in 1991, physical construction of 12 projects 
has been completed, and 15 additional projects are under construction. 
Completed projects include Trestle Bay Restoration, Oregon; Salt Bayou, 
McFaddin Ranch Wetlands, Texas; and Narrows Dam, Lake Greeson, 
Arkansas. This program demonstrates that the Corps can develop 
innovative, cost effective and technically sound solutions to a variety 
of environmental problems. Interest in the program is expected to grow 
in response to the expanded authority provided by WRDA 1996.
    Section 204 beneficial uses of dredged material.--The fiscal year 
1998 budget includes $2 million for the program of Beneficial Uses of 
Dredged Material under Section 204 of WRDA 92, as amended. This 
includes funds to fully fund the Federal share of any new construction 
starts. Two projects in Louisiana have been essentially completed under 
this authority. This valuable program benefits the environment, while 
making good use of clean material dredged from navigation channels 
maintained by the Corps.
    Hurricane and storm damage reduction policy.--The budget includes 
$66 million to continue previously initiated projects on which long-
term Federal commitments already have been made, regardless of the type 
of area served or the length of the commitment. However, continuing the 
policy articulated last year in the President's budget, we are 
proposing no new Federal commitments for shore protection projects to 
protect primarily recreation destinations which provide substantial 
regional income to the state or local economies or would involve long 
term Federal responsibility for periodic nourishment.
    Reprogramming in a funding constrained environment.--Throughout the 
course of the year, the Army advises the Appropriations Subcommittees 
of plans to reprogram funds among projects in accordance with long-
standing procedures agreed to by the Executive Branch and the 
Subcommittees, as recently expanded by Section 106 of the Fiscal Year 
1997 Appropriations Act. The Corps proposes to exercise these 
reprogramming authorities when doing so would more efficiently use 
available funding, taking into account such factors as unanticipated 
slippage in project schedules or changes in cost estimates. In the 
past, the Corps has reprogrammed funds from projects which experienced 
schedule delays or cost savings to other projects with unanticipated 
needs, such as accelerated contractor earnings or settled claims. 
Generally, this was accomplished without controversy. Project 
proponents were aware of the reprogrammings, understood that cost 
effective management of the Civil Works program required these 
adjustments, and were confident that funds would be returned to the 
original projects when they were required.
    Over the past year, the Corps has experienced unusual difficulty in 
identifying sources of funds in its programs that are excess to the 
current requirements of the project to which they were allocated and 
can, therefore, be reprogrammed to help keep another project on 
schedule without adversely affecting the original project. Overall 
fiscal constraints, combined with the success of our efforts to 
significantly reduce the Corps' unobligated carryover, have in some 
cases prevented the Corps from making payments to contractors that keep 
up with the contractors' progress. In the current funding constrained 
environment, the need to give priority in reprogramming to payments 
owed to current contractors may limit somewhat the Corps ability to 
take advantage of other opportunities to expedite work or, in extreme 
cases, even maintain announced schedules.
    The Corps' ability to reprogram funds is more critical than ever 
when funding is constrained. Given the importance of reprogramming to 
efficient and effective program management, I ask this Subcommittee to 
continue to support the Corps' current reprogramming authorities during 
the coming year.
Operation and Maintenance (O&M), General
    Prudent management of the Nation's investment in water resources 
projects is an important part of our program. Nearly half of the Army's 
$3.7 billion Civil Works budget--$1.62 billion--supports the 
preservation of the valuable assets that make up the existing 
infrastructure. This budget request will help ensure that the Corps of 
Engineers can continue to deliver justified levels of service at the 
least cost to the taxpayer in the five mission areas described below.
    Navigation.--A total of $868 million is requested to operate and 
maintain an extensive system of coastal ports and inland waterways that 
provide for safe and efficient movement of waterborne commerce. Within 
this total, $46 million is included to maintain shallow draft harbors, 
including inland waterway ports, coastal harbors and connecting 
channels, where the economies of the communities are dependent on 
commercial fishing and related purposes.
    Flood damage reduction.--The prevention of flood damages continues 
to have a high priority in the Civil Works program. The budget includes 
$212 million to save lives and reduce the level of property damage 
incurred by floods.
    Hydropower.--The Corps plays a significant role in meeting the 
Nation's electric power generation needs. The budget request includes 
$276 million for the production of reliable and cost effective 
electricity from a renewable source of power.
    Recreation.--The Corps is one of the Federal government's largest 
providers of outdoor recreation opportunities. The budget includes $176 
million to provide this service at multipurpose reservoirs, of which an 
estimated $30,000 would be derived from recreation user fees collected 
at Civil Works projects.
    Environmental stewardship.--In order to assure that the operation 
of Civil Works facilities and management of associated lands comply 
with environmental requirements, the budget request includes $80 
million to manage Corps projects in an environmentally responsible 
manner.
    Remaining items in the amount of $35 million make up the rest of 
the O&M budget request. These funds are for research and development 
and other programmatic activities that support the five mission areas 
described above. Savings and slippage in the amount of $29 million has 
been deducted from the above amounts, for a net total O&M request of 
$1.62 billion.
    In support of the Administration's goal to balance the budget by 
the year 2002, we are exploring various cost saving measures in the O&M 
program. Aligning operation and maintenance levels at projects with the 
demand for services is one avenue. For example, where utilization of 
locks is relatively low, perhaps the same service could be provided for 
our customers at something less than 24 hours a day. Another example 
would be to align the length of the recreation season with visitation 
rates at Corps lakes. Support activities, such as condition and 
operation studies, master planning, water control management and real 
estate management are potential cost saving areas. Under current budget 
constraints, we will need to critically examine all our facilities to 
ensure that available resources are devoted to the highest priority 
maintenance requirements.
    The above examples are conceptual and will be analyzed further, 
coordinated with our customers and refined as necessary to achieve the 
cost savings in an informed and open forum. Also, the individual 
project amounts included in the fiscal year 1998 budget represent our 
best estimates of what will be required next year. Undoubtedly, 
intervening events will change these requirements. The Corps will 
closely monitor project conditions and will apply the flexibility the 
Subcommittee has afforded the Civil Works program to make adjustments 
among projects to ensure that the most urgent O&M requirements are met.
Flood Control, Mississippi River and Tributaries (MR&T)
    The President's fiscal year 1998 budget includes $266 million for 
the MR&T program. All MR&T projects are budgeted for incremental annual 
funding, as in the past. The budgeted funding level treats MR&T 
continuing construction schedules comparably with those in the 
Construction, General, account. The amount budgeted for the streambank 
Demonstration Erosion Control (DEC) program is intended to complete the 
Corps' involvement in the DEC in fiscal year 1998. Funding for limited 
new DEC construction contracts is included as necessary to protect work 
that is currently in place. In addition, the budget would continue 
necessary engineering and design for future work, in order to turn the 
DEC over to the local sponsor in an orderly manner. We ask the 
Subcommittee to reconsider this proposal, which would phase out an 
essentially completed demonstration program.
Regulatory Program
    Funding level.--The budget includes $112 million for the Corps 
Regulatory Program to maintain fair and effective regulation of the 
Nation's wetlands and other aquatic resources. This is the same amount 
requested in the President's fiscal year 1997 budget and an increase of 
$11 million over the $101 million appropriated for fiscal year 1995, 
1996 and 1997. The increase is necessary to implement important 
initiatives that make the regulatory program more responsive, more 
equitable, and more efficient. Unfortunately, while these initiatives 
have been planned for several years, they have been delayed due to lack 
of funds.
    For example, the administrative appeals process allows applicants 
to challenge regulatory decisions without litigation and has drawn 
support from the private sector. However, implementation of the 
administrative appeals process has been partial and slow, because of 
inadequate funding to fully carry out this highly regarded initiative. 
Of the amount requested in the fiscal year 1998 budget for this 
program, $5 million is to fully implement the administrative appeals 
process in fiscal year 1998. Efforts to increase cooperation and 
coordination with State and local governments on regulatory matters 
have also been delayed due to funding constraints. These efforts will 
increase state and local responsibilities for wetlands management, 
eliminate duplication with Federal programs, provide better service to 
the public, and reduce costs for the Federal Government. The additional 
funds also will allow the regulatory program to continue its improved 
service to the public, such as shorter processing time for permit 
applications, which currently is only 12-20 days for most permits. 
Efficiencies which have been introduced into the program are apparent 
in the fact that permit processing time has improved every year for the 
last four years, despite a 50 percent increase in the number of permit 
actions. Without the support of Congress in the form of funding at the 
requested levels, improvements in performance have leveled off and 
performance can soon be expected to decline, because the program cannot 
afford to maintain adequate staffing levels.
    Regulatory program user fees.--The Administration is again 
proposing legislation to establish a more rational system of permit 
application fees for the Corps regulatory program. In the current 
system, most permit fees do not cover the cost of collection, let alone 
the cost of administering the program. Under this proposal, the fees 
for individual landowners would be eliminated, and fees for commercial 
applicants would be increased to cover the costs of evaluating and 
processing the permits, using a sliding scale based on the complexity 
of the application.
Flood Control and Coastal Emergencies
    Civil Works program budget.--The President's budget provides $14 
million for basic planning and preparedness in the Flood Control and 
Coastal Emergencies program. The budget request ensures a minimum level 
of funding for salaries and expenses, training, coordination with other 
Federal and non-Federal agencies.
    Emergency requirements for natural disasters contingency fund.--A 
major Government-wide initiative reflected in the President's fiscal 
year 1998 budget is the proposal to establish a centralized funding of 
future emergency requirements. This fund is intended to finance a broad 
range of potential emergency requirements of the Executive Branch and 
to serve as an alternative to agency-specific emergency supplemental 
appropriations requests. The President's request for funds appropriated 
to the President includes $5.8 billion for this contingency fund, the 
estimated average annual Federal emergency spending from fiscal year 
1991 through fiscal year 1997. It is intended for the Corps of 
Engineers to be provided access to this fund after current 
appropriations for meeting emergencies are obligated and a Presidential 
decision has been made to make additional funds available.
Improving Government Efficiency and Effectiveness
    The draft Civil Works Strategic Plan, being prepared in response to 
the Government Performance and Results Act, is currently under 
discussion between the Army and OMB. Our challenge is to describe how 
the Corps of Engineers will continue to fulfill its Civil Works 
missions while meeting the challenges of the five-year funding targets 
allowed for this program in the President's plan for balancing the 
budget by 2002.
    The Corps is preparing program performance goals and performance 
measures for each of its eight business programs: flood and coastal 
storm damage reduction, navigation, environment, hydropower, 
recreation, regulatory, emergency preparedness and disaster response, 
and support for others. We will consult with this subcommittee and 
others on the Strategic Plan as soon as we have completed our 
consultations with OMB.
                               conclusion
    In conclusion, I would emphasize my commitment to work with this 
Subcommittee, others in Congress, the broader array of interests within 
the Administration, and the non-Federal partners of Civil Works 
projects to develop new policies and priorities to ensure that the Army 
Civil Works program in the Corps of Engineers continues to serve the 
vital interests of the Nation by providing efficient, priority 
investments in public infrastructure. Moreover, this must be achieved 
in a way that supports and contributes to the President's commitment to 
balance the Federal budget. Managing the Civil Works program during the 
coming years of severe funding constraints will be a tremendous 
challenge requiring the cooperation of all interests. I ask for your 
support as we move forward to meet these challenges.
    Thank you Mr. Chairman, Members of the Subcommittee. This concludes 
my statement.

                                                                 TABLE A.--FISCAL YEAR 1998 DIRECT PROGRAM--PRESIDENT'S PROGRAM                                                                 
                                                                                    [In thousands of dollars]                                                                                   
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                           Fund                                                                 
                                                                             Trust      Coastal               -----------------------------                            Trust rivers             
                           Program                               Harbor      inland     wetlands   Recreation      Special        Permit      General       Total      and harbors      Total   
                                                              maintenance  waterways  restoration   user fees     permanent    application                            contributions             
                                                                                                               appropriations    fees \1\                                                       
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Combined (Discretionary and Mandatory):                                                                                                                                                         
    General Investigations..................................  ...........  .........  ...........  ..........  ..............  ...........      150,000      150,000        22,000       172,000
    Construction, General...................................  ...........     70,185  ...........  ..........  ..............  ...........    1,323,065    1,393,250        82,000     1,475,250
    Operation and Maintenance, General......................      489,600  .........  ...........      30,000  ..............  ...........    1,098,400    1,618,000         2,000     1,620,000
    Mississippi River and Tributaries Project...............  ...........  .........  ...........  ..........  ..............  ...........      266,000      266,000         6,086       272,086
    Regulatory Program......................................  ...........  .........  ...........  ..........  ..............       7,000       112,000      112 000  .............      112,000
    General Expenses........................................  ...........  .........  ...........  ..........  ..............  ...........      148,000      148,000  .............      148,000
    Flood Control and Coastal Emergencies...................  ...........  .........  ...........  ..........  ..............  ...........       14,000       14,000  .............       14,000
    Revolving Fund..........................................  ...........  .........  ...........  ..........  ..............  ...........  ...........  ...........  .............  ...........
    Coastal Wetlands Restoration............................  ...........  .........      44,000   ..........  ..............  ...........  ...........  ...........        11,000        55,000
    Permanent ppropriations.................................  ...........  .........  ...........  ..........        13,075    ...........  ...........  ...........  .............       13,075
                                                             -----------------------------------------------------------------------------------------------------------------------------------
      All...................................................      489,600     70,185      44,000       30,000        13,075         7,000     3,104,465    3,701,250       123,086     3,881,411
Discretionary...............................................      489,600     70,185  ...........      30,000  ..............  ...........    3,104,465    3,701,250  .............    3,701,250
Mandatory...................................................  ...........  .........      44,000   ..........        13,075    ...........  ...........  ...........       123,086       180,161
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Proposed fees for processing permit applications.                                                                                                                                           


                                TABLE B.--FISCAL YEAR 1997 NEW CONSTRUCTION WORK                                
                                               [Fiscal year 1998]                                               
----------------------------------------------------------------------------------------------------------------
                                                    Fiscal year                                                 
                  Project name                      1998 budget    Total project   Federal cost     Non-Federal 
                                                      request          cost                            cost     
----------------------------------------------------------------------------------------------------------------
New Construction Starts:                                                                                        
    American River, CA..........................     $44,744,000     $63,300,000     $47,500,000     $15,800,000
    Everglades and South Florida Ecosystem                                                                      
     Restoration, FL............................      75,000,000     150,000,000      75,000,000      75,000,000
    Anacostia River and Tributaries, MD and DC..      10,799,000      16,000,000      12,000,000       4,000,000
    Wilmington Harbor Channel Widening, NC......      17,512,000      24,871,000      18,600,000       6,271,000
    Las Cruces, NM..............................       6,000,000       8,800,000       6,600,000       2,200,000
    Houston-Galveston Navigation Channels, TX...     119,100,000     185,100,000     137,900,000      47,200,000
    AIWW Bridge at Great Bridge, VA.............      21,139,000      26,900,000      23,100,000       3,800,000
Major Rehabilitation:                                                                                           
    Buford Powerhouse, GA.......................      27,200,000      27,200,000      27,200,000  ..............
    Lock and Dam 3, Mississippi River, MN.......      12,400,000      12,400,000      12,400,000  ..............
Dam Safety Assurance: Tygart Lake, PA...........      28,043,000      29,500,000      29,500,000  ..............
Resumptions:                                                                                                    
    Alton to Gale Organized Levee District, IL                                                                  
     and MO.....................................         575,000       7,891,000       7,589,000         302,000
    Cooper River, Charleston Harbor, SC.........        2,738,00       2,738,000       2,738,000  ..............
                                                 ---------------------------------------------------------------
      Totals....................................     365,250,000     554,700,000     400,127,000     154,573,000
----------------------------------------------------------------------------------------------------------------

                      statement of joe n. ballard

    Senator Domenici. Thank you very much. General Ballard, I 
appreciate your coming. It was a pleasure meeting with you. 
Congratulations on being the Army's top engineer. It is great 
to have you on board.
    General Ballard. Thank you very much, sir. Mr. Chairman and 
members of the subcommittee, I am pleased to be testifying on 
the President's fiscal year 1998 budget for the Civil Works 
Program, and am honored to be appearing before you for the 
first time as Chief of Engineers.
    Thanks to your great support, the Civil Works Program is 
strong, is balanced, and is highly productive. I look forward 
to our continued partnership in this essential program that is 
so beneficial to our great Nation.
    Mr. Chairman, with your permission I will now summarize my 
complete statement, and submit that statement for the record.

                        corps division structure

    My summarized statement covers two topics: the new division 
structure, and the fiscal year 1998 Civil Works Program budget. 
First I want to take a few minutes to discuss our new division 
structure that was implemented on the first of April. I know 
that there is great interest in this, and I want to hit that up 
front.
    You have each been provided an outline of our new 
structure, so rather than spending time describing it, I would 
like to address the structure's background and its merits.
    I want to make several points. The first point is that we 
have been trying to restructure since 1989 without success. The 
second point is that during the intervening years the Corps has 
made many significant reductions in its work force, 
particularly at the division and at the headquarters level. 
Much of the large savings originally envisioned as a result of 
division office restructuring have been of necessity achieved 
through other steps. These savings are reflected in the budget 
request. The third point is that many other efficiency actions 
were on hold pending resolution of restructuring. We could not 
effectively proceed without knowing the outcome. Finally, the 
years of ongoing restructure initiative were taking their toll 
on our employees and their morale, since there has been great 
uncertainty about what would happen. It is important for all of 
those reasons that we have come to closure on this issue.
    The plan submitted to you by the Secretary of the Army and 
implemented at the beginning of this month responded to all of 
the requirements of the law, ensuring continued presence in key 
areas, allowing us to draw down in selected areas, while still 
maintaining watershed integrity. The new structure optimizes 
our support to the Army and Air Force, which are also major 
considerations.

                            work force size

    Let me briefly discuss some key points on resourcing. The 
Corps has already made significant reductions in its executive 
direction and management work force since 1989. We achieved 
these reductions through down sizing and reorganization 
initiatives independent of formal restructuring.
    From 1989 to the present, we reduced the size of the Corps 
headquarters by 24 percent. As a result of this action, the 
Corps headquarters now accounts for less than 2 percent of the 
total civil works work force, making it one of the leanest 
headquarters of any agency in Washington. In October 1996, the 
Corps completed a major division office restructure initiative. 
We divested the divisions of operating functions, such as 
technical review, and we eliminated duplications of efforts. A 
typical division headquarters has been reduced from 90 Civil 
Works Program funded FTE's to 76. In total the Corps has 
reduced its general expenses work force by 29 percent since 
1989.
    The new structure will provide a work force within which we 
can continue to draw down without hurting program execution. It 
allows us to appropriately shape the work force consistent with 
program workloads.
    I want to thank you for your continued support in this 
difficult area. I strongly feel this structure is the best one 
for the Corps, and sets in place a more efficient 
organizational structure permitting greater efficiency in the 
future.

                  fiscal year 1998 civil works program

    Turning briefly now to the civil works direct program, I 
know that you have seen and your staffs have analyzed the 
proposed funding levels. Let me highlight a few key points. The 
proposed funding level includes the traditional incremental 
funding plus categories called full and advance funding. As the 
Secretary explained, this approach is in support of the 
administration policy to fund up front all Federal investments 
in fixed assets.
    Of the proposed funding, 20 percent will come from sources 
other than the general fund of the Treasury. All but 7 percent 
would come from the nine existing special and trust funds. The 
one new source is a proposed special fund based on fees for 
permits from commercial applicants.
    The overall impact of this budget is positive given the 
major efforts underway to balance the budget, which is 
important to the Nation. It provides reasonable amounts for 
Corps traditional measures. It also provides considerable 
funding for new starts in each of the 5 years to allow us to 
respond to the Nation's many pressing water resource management 
needs.
    A special concern of mine is our ability to maintain our 
existing civil works infrastructure. The facilities are getting 
older and the dollars are declining. I have asked Major General 
Fuhrman to make this a special focus area.
    In conclusion, Mr. Chairman, the President's budget for the 
Corps of Engineers provides stable funding with a balance among 
competing priorities. However, we must continue to find ways to 
reduce our costs and shift more of those remaining to direct 
beneficiaries of our services. Meanwhile, we will do our very 
best to execute the Civil Works Program for the maximum benefit 
of the Nation. I am confident in our ability to meet that 
challenge, in continuing to benefit our great Nation.
    Thank you, Mr. Chairman, and members of the subcommittee. 
This concludes my statement.
    [The statement follows:]
             Prepared Statement of Lt. Gen. Joe N. Ballard
                              introduction
    Mr. Chairman and Members of the Subcommittee: I am pleased to be 
testifying on the President's fiscal year 1998 Budget for the Civil 
Works Program, and am honored to be appearing before you for the first 
time as Chief of Engineers.
    Thanks to your great support, the Civil Works Program is strong, 
balanced, and highly productive. I look forward to your continued 
partnership in this fine program, so broadly beneficial to our Nation.
    My statement covers six topics: New Division Structure, Fiscal year 
1998 Civil Works Program Budget, Improvement of Business Processes, 
Corps of Engineers Financial Management System, Civil Works Program 
Execution and Outlook, and Corps Vision and Strategic Plan.
                         new division structure
    I want to take a few minutes to discuss our new division structure 
that was implemented on the 1st of April. You have each previously been 
provided an outline of the structure. Rather than spending time 
describing the structure itself, I would like to address the background 
and merits.
    I want to make several points. The first point is that we had been 
trying to restructure since 1989 without success. The second point is 
that during the intervening years, the Corps has made many significant 
reductions in its workforce, particularly at the division and 
headquarters levels. Much of the large savings envisioned as a result 
of division office restructuring has been, of necessity, achieved 
through other steps. The savings are reflected in the budget request. 
The third point is that many other efficiency actions have been ``on-
hold'' pending resolution of restructuring. In many cases it would have 
been premature to implement these, not knowing the outcome. Finally, 
the years of the ongoing restructuring initiative were taking their 
toll on our employees and their morale, since there has been great 
uncertainty about what would happen. It is important for all those 
reasons that we have come to closure on this issue.
    The plan submitted to you by the Secretary of the Army, and 
implemented at the beginning of this month, responds to all 
requirements of the law, ensuring continued presence in key areas, 
allowing drawdown in selected areas, maintaining watershed integrity, 
and optimizing our support to the Army and Air Force, which is also a 
key consideration. Let me now discuss some key points on resourcing.
    The Corps has already made significant reductions in its Executive 
Direction and Management (ED&M) workforce since 1989. We have made 
significant progress, exceeding the requirements of the Federal 
Workforce Restructuring Act (enacted in 1994). We achieved these 
reductions through downsizing and reorganization initiatives 
independent of formal restructuring.
    For example, from 1989 to the present, we reduced the size of the 
Corps headquarters in Washington by 24 percent. As a result of this 
action, the headquarters now accounts for less than 2 percent of the 
total Civil Works Program workforce, making it one of the leanest 
headquarters of any federal agency. In October 1996, the Corps 
completed a major division office reorganization initiative. This 
initiative reoriented the divisions on their primary functions of 
command and control, regional coordination, program management, and 
quality assurance. We divested the divisions of operating functions, 
such as technical review, and eliminated duplication of effort. A 
typical division headquarters has been reduced from 90 Civil-Works-
funded full-time equivalent employment years (FTE's) to 76. In total, 
the Corps has reduced its General Expenses (GE) workforce by 29 percent 
since 1989.
    We anticipate that the GE account will be flat-funded in the 
future. There are two Army-wide initiatives--regionalization of Human 
Resources Offices (HRO's) and consolidation of Finance Offices. At the 
end of fiscal year 1995, the Corps had 35 HRO's with a total operating 
staff of 687 FTE's. In fiscal year 1996, five of these HRO's were 
regionalized and the operating staff was reduced by 142 FTE's, or 21 
percent, to 545 FTE's. We hope to see minor savings from the 
consolidation of Finance Offices. Also, we will continue to seek ways 
to reduce the size of the headquarters staff.
    We were in a position where we could not make further cuts within 
division headquarters without affecting their abilities to perform 
essential functions noted earlier. This new structure will provide a 
framework within which we can continue to draw down without hurting 
program execution. It allows us to shape the workforce consistent with 
program workload.
    Thank you for your continued support in this difficult area. I 
strongly feel the new structure is the best one for the Corps, and sets 
in place a more efficient organizational structure, permitting greater 
efficiencies in the future.
              fiscal year 1998 civil works program budget
                              introduction
    New fiscal year 1998 funding for the Civil Works Program, including 
the Direct and Reimbursed programs, is expected to approach $4.68 
billion. The Direct Program is formulated by the federal government and 
funded through appropriations of discretionary and mandatory amounts 
directly to the Corps. The Reimbursed Program is formulated, under 
provisions of law, by the Corps in collaboration with other federal 
agencies, State and local governments, and other nations. Usually, it 
is funded from discretionary amounts of the Direct Program, initially, 
and, ultimately, through reimbursement by the agencies, governments, 
and nations.
                             direct program
Overview
    The proposed fiscal year 1998 Civil Works Direct Program budget 
provides for continued funding of nearly all studies and projects 
underway, including many started in fiscal year 1997. It also provides 
for funding of new starts under the General Investigations (GI) and 
Construction, General, (CG) programs.
    Funding includes traditional ``incremental'' and newly instituted 
``advance'' and ``full'' funding amounts. All programs, except the CG 
Program, are funded in the traditional incremental way. Appropriations 
are made for the budget year of amounts needed then, based on estimates 
in the justification statements for that year. The CG Program is funded 
in all three ways in order to comply, as fully as currently 
practicable, with the government-wide initiative to fund, upfront, 
federal investments in fixed assets. Ongoing projects not completing in 
the 5-year program, fiscal year 1998--2002, are incrementally funded, 
as described above. Those completing within outyears of the 5-year 
program, fiscal year 1999--2002, are fully funded through advance 
appropriation in each year of amounts needed in that year, based on 
outyear estimates in the budget year justification statements. All 
fiscal year 1998 new start projects, including any under the Continuing 
Authorities Program (CAP) and the Project Modifications for Improvement 
of the Environment Program (Section 1135), are fully funded, upfront, 
through appropriation in fiscal year 1998 of the full amount needed to 
complete these projects.
    The new start program includes 10 new studies, including nine 
reconnaissance studies and one new feasibility study. Also, 17 
preconstruction engineering and design studies, following cost-shared 
feasibility studies, are being funded for the first time. The new start 
program also includes new construction projects, including 12 
specifically authorized by Congress, and an undetermined number 
generally authorized under the CAP. The specifically authorized 
projects include seven regular construction projects, two project 
resumptions, two major rehabilitation projects, and one dam safety 
assurance project.
New Funding
    The fiscal year 1998 budget provides for $3.88 billion in new 
funding. This includes $3.70 billion in discretionary appropriations 
being requested through the Fiscal Year 1998 Energy and Water 
Development Appropriations Act, and $180 million in mandatory 
appropriations to be made available under existing law. Discretionary 
funding includes incremental, advance, and full funding amounts of 
$3.09 billion, $228 million, and $380 million, respectively. Mandatory 
appropriations include $13 million in permanent appropriations for 
maintenance of hydraulic mining debris reservoirs in California; $44 
million from the Coastal Wetlands Restoration Trust Fund (CWRTF); and 
$123 million in nonfederal contributions from the Rivers and Harbors 
Contributions Trust Fund (R&HCTF), representing costsharing paid under 
five programs and one project. The programs are the GI; CG; Operation 
and Maintenance, General (O&M); and Coastal Wetlands Restoration 
programs. The project is the Flood Control, Mississippi River and 
Tributaries (MR&T) Project.
Effect of Full Funding
    As shown in the table, new funding for the fiscal year 1998 budget, 
including discretionary and mandatory funding, is slightly larger than 
the total of appropriations for fiscal year 1997, exceeding the total 
by $104 million. However, the discretionary part exceeds last year's 
total by more than $179 million. Of the $1.39 billion in discretionary 
appropriations for this program, $380 million, or 28 percent, is 
provided to fully fund new construction starts upfront, in accordance 
with the government-wide initiative to fully fund fixed assets. Of this 
full funding amount, an estimated $42 million will be obligated in 
fiscal year 1998; the remaining $338 million is programmed for use over 
the next four years. Outlays of discretionary funding for fiscal year 
1998 are expected to be about $280 million less than for fiscal year 
1997.
Net New Funding
    Of the $3.88 billion in total new funding, $777 million, or 20 
percent, would come from 10 sources other than Treasury's General Fund. 
These sources--nine existing and one proposed--include five Special and 
five Trust Funds. The largest amounts would come from the Harbor 
Maintenance Trust Fund (HMTF) ($490 million), R&HCTF ($123 million), 
Inland Waterways Trust Fund (IWTF) ($70 million), CWRTF ($44 million), 
and Special Recreation User Fees (SRUF) Fund ($30 million). As 
discussed later, under Program Execution and Outlook, the one proposed 
source would be a special fund for the Regulatory Program, with 
collections estimated to amount to $7 million in fiscal year 1998 and 
increase to $14 million, annually, thereafter.
Significance of Budget for Corps
    Given the President's plan to balance the federal budget by fiscal 
year 2002, the Corps' relatively strong budget and flat funding ceiling 
of nearly comparable magnitude in the outyears of its 5-year program 
are very encouraging. It provides adequate amounts for our traditional 
missions. It enables continuing, with few exceptions, ongoing planning, 
design, and construction projects. Additionally, it provides 
considerable funding for new construction starts in each of the five 
years, supporting the Corps' traditional, highly developed, and 
important role in water resources problem-solving for the Nation.
    Ever-shrinking resources challenge us to become even more efficient 
and innovative in producing for our customers. As discussed later, we 
have been working hard at this, and have met with many successes 
already. However, much more is needed. My recently released Strategic 
Plan, discussed under the Corps Vision and Strategic Plan, commits us 
to achieve ``dramatic improvement in performance and customer 
satisfaction.'' Our goal is to ``revolutionize'' our effectiveness in 
problem-solving--continually maximizing the actual and potential values 
of our organization to Civil Works Program customers and the Army, and, 
thereby, the Nation. This budget promotes implementation of the 
Strategic Plan, not only confirming its necessity, but also providing 
adequate funding to facilitate its diligent pursuit.
    Full funding for acquisition of fixed assets will allow us to 
coordinate far more intensively, quickly, and effectively with local 
sponsors in determining optimum work and funding schedules based on 
capabilities and constraints of both parties. Both parties should 
benefit significantly--the Corps, because of more efficient work 
schedules; and the customer, because of greater certainty of financial 
obligation and faster delivery of needed facilities and expected 
benefits.
                           reimbursed program
    Through the Civil Works Reimbursed Program we help other agencies 
with timely, cost-effective implementation of their programs, while 
maintaining and enhancing capabilities for execution of our Civil Works 
Direct Program and Military Program missions. Other agencies look to us 
for help with engineering and construction management because of our 
vast experience and capabilities, enabling us to do the work better, 
faster, and cheaper. In recognition of this, OMB makes available 
manpower for response to agency requests.
    We provide reimbursable support for about 60 other federal agencies 
and several State and local governments through help with 
environmental, engineering, and construction management work. Total 
reimbursement for such work in fiscal year 1998 is projected to be 
close to $800 million. About half of this is for environmental work. 
The largest share--nearly $300 million--is expected from the 
Environmental Protection Agency (EPA) for cleanup of wastes at numerous 
sites under its Superfund program. 98 percent of our Reimbursed Program 
funding is provided by federal agencies.
                                staffing
    Total staffing for the Civil Works Program for fiscal year 1998 is 
26,371 FTE's. This reflects a reduction of 830 FTE's from the fiscal 
year 1997 total. Of the total, 25,133 FTE's are for the Direct Program 
and 1,238 FTE's are for the Reimbursed Program. Total staffing is 90 
percent to districts, 4.5 percent to laboratories and other separate 
field operating agencies, 3.5 percent to division offices, and less 
than 2.0 percent to headquarters. Under our new structure, the 
headquarters share will remain essentially unchanged, while district 
and separate field operating agency shares will grow from reallocation 
of division office savings.
                   improvement in business processes
                              introduction
    This part of my testimony summarizes efforts to improve business 
processes of the Civil Works Program over the past few years, with 
emphasis on accomplishments in fiscal year 1996, and efforts underway 
in fiscal year 1997.
                   decision document review/approval
    We have implemented important changes in our Civil Works Program 
document production and approval processes. Headquarters now restricts 
its review of decision documents to ``policy review,'' ensuring 
compliance with law and Administration policy. Divisions restrict their 
reviews of these documents to ``quality assurance reviews,'' ensuring 
quality of planning and engineering in accordance with approved quality 
assurance plans implemented for each of their districts. Districts 
accomplish ``technical reviews,'' controlling the technical adequacy of 
the planning and engineering in these documents. Each district has 
adopted generic quality control plans for routine projects, and 
specific quality control plans, as needed, for high risk projects.
    Former successive reviews by districts, divisions, headquarters, 
the former Washington Level Review Center, Army, and OMB made review 
times for project reports exorbitant. Implementation of the new 
``division of labor,'' based on new roles and missions, has 
significantly reduced these times. For example, assigning districts 
complete responsibility for technical review, including independent 
review, enables ``one stop'' accomplishment of a function formerly 
requiring three stops--one at district, division and headquarters 
levels. This greatly compresses review time, promoting much more timely 
approval of project designs and implementation of project starts.
              headquarters responsiveness to field offices
    In addition to restricting its review to policy review, our 
Washington-level review office continues to improve its review process 
in an effort to provide more timely decisions to districts.
    In fiscal year 1996, we received and completed review of more than 
320 decision documents, including reconnaissance, feasibility, design, 
and real estate reports. These reviews led to preparation of 31 Chief 
of Engineers Reports recommending projects ultimately authorized in the 
Water Resources Development Act of 1996 (WRDA96). Average processing 
time for these and other decision documents reviewed during the first 
quarter of fiscal year 1997 was 110 days. This is 18 days fewer than 
the 128-day-average in fiscal year 1995. We will continue to try to 
shorten this average.
    Additionally, in fiscal year 1996, this office completed review of 
and approved more than 46 Project Cooperation Agreements (PCA's) for 
specifically authorized projects. Average processing time for these 
documents was only 55 days, enabling project construction to begin 
expeditiously.
    Much of our success in shortening policy review time has resulted 
from aggressive monitoring of timeliness through use of a recently 
implemented internal control system.
    Finally, in the interest of further expediting the decision 
document review process, Army recently proposed to reduce State and 
agency review times from 90 to 30 days. In light of the significant 
involvement of State and federal agencies in development of project 
proposals, we found the 90-day review time to be lengthy and 
duplicative. This initiative was enacted into law in WRDA96, and, 
combined with the internal control system, promoted timely signing of 
13 Chief's Reports for projects authorized in Section 101(b) of WRDA96.
                     project cooperation agreements
    A key milestone in execution of cost-shared projects is execution 
of Project Cooperation Agreements (PCA's). These legal contracts spell 
out roles and responsibilities of both the federal government and 
nonfederal sponsor. Negotiation and processing of PCA's are complex and 
time-consuming and can lengthen project schedules. Since 1991, we have 
worked to make such negotiation and processing more predictable and 
efficient in two ways.
    First, in consultation with nonfederal project sponsors, we have 
developed several new model PCA's reflecting principles of partnering, 
described below under Partnering, and addressing recurring concerns of 
sponsors. We continue to develop models to respond to needs of sponsors 
and expedite the process. Two of the models, cover a major portion of 
the Corps' program. They cover specifically authorized flood control 
projects, including recreation features, and commercial navigation 
projects. Other models cover continuing authorities projects; four new 
models cover WRDA92 section 304 projects. Latest versions of all models 
are available and easily accessible on the world-wide web.
    Second, we have delegated authorities to division and district 
commanders to execute PCA's conforming to the models, without 
Washington-level review.
    These steps have fostered partnerships and expedited negotiations, 
and in cases of conforming PCA's for specifically authorized projects, 
cut 60 days off the average schedule of 120 days.
                               partnering
    The Alternative Dispute Resolution (ADR)/Partnering Program--our 
new way of doing business--is a corporate success story which has 
spawned a cultural phenomenon. Through partnering, goals are 
established in common interest to produce win-win outcomes. The process 
is based on trust, openness, teamwork, and risk-sharing by all 
stakeholders in projects--customers and vendors alike. Its purpose is 
to minimize misunderstandings and claims, avoid costly litigation, and 
expedite production. The success of partnering has resulted in better 
administrative and cost control throughout the Corps. Contract claims 
have been reduced by more than 70 percent in five years. Appeals have 
also been dramatically reduced.
    Success has been achieved in related areas as well. For example, 
the Corps training program in ADR/Partnering techniques was first of 
its kind in the Federal Government, and has been the longest running as 
well. It has served as a model for programs of other federal agencies, 
including the Office of Personnel Management's program for executive 
management, and for programs of several law schools and universities. 
Also, under the Administration's National Performance Review and 
Reinventing Government Initiative, the Corps was given the lead in 
producing the tri-service's Partnering Guide for Environmental Missions 
of the Air Force, Army, Navy. This guide, now in its second printing, 
is strongly supported by EPA.
    We expect additional successes in partnering and customer service 
in the future. In September 1996, we conducted a partnering workshop 
with our division offices. The objectives of the workshop were to 
examine ways to:
  --increase the use of partnering techniques throughout the entire 
        project development process prior to, as well as during, the 
        construction phase;
  --increase the involvement of our local sponsors in more of the day-
        to-day management activities of the project, and;
  --increase the amount and type of work that our local sponsors may 
        accomplish during the project development process.
    The workshop resulted in a number of recommendations that are being 
pursued. One of the most significant was for development of a Civil 
Works partnering guide, following the pattern of the tri-service's 
environmental guide. This document will provide policy, tools and 
techniques for partnering throughout the project development process.
             government performance and results act of 1993
    The landmark Government Performance and Results Act of 1993 (GPRA) 
requires that we show how improvements in our business processes, and 
efforts to balance scarce budgetary resources between operation and 
maintenance and new investments, ultimately impact delivery of our 
products and services to the Nation.
    The improvements in our business processes, discussed elsewhere in 
this statement, include: streamlined decision document review 
processes, eliminating duplication of functions at different levels; 
intensively monitored policy review, significantly reducing average 
review times; standardized PCA models, simplifying and expediting 
development, review, and approval of PCA's; broader application of 
partnering techniques to strengthen partnerships with sponsors, 
expediting construction and minimizing costs; and intensively managed 
program execution, for more efficient and timely production and greater 
customer satisfaction.
    Until recently, we could demonstrate benefits of these process 
improvements only at the project level; we did not have means to 
display them at the program level. Likewise, we could demonstrate the 
impacts of varying funding levels on levels of program services and the 
timing of program results at the project level; however, again, we did 
not have means to measure such impacts at the program level.
    Currently, we are testing an initial set of results-oriented 
performance measures for demonstrating the contributions of internal 
process improvements and impacts of different levels of funding for 
programs. Our goal is to comply with GPRA in development of a 
comprehensive set of results-oriented program performance measures. We 
are discussing these measures with OMB, and beginning the consultation 
process with Congress. This should lead to successful development of 
our first Annual Performance Plan in fiscal year 1999, as required. The 
plan will assist managers, the Administration, Congress, and the 
American people in determining what program results should be achieved 
with resources entrusted to us.
             corps of engineers financial management system
    Since our last appearance before you, we received formal Department 
of the Army Major Automation Information Systems Review Council 
(MAISRC) approval to deploy the Corps of Engineers Financial Management 
System (CEFMS) Corps-wide. As a result, during fiscal year 1996, we 
completed deployment in the Southwestern Division and in the National 
Capitol Region, initiated and completed deployment in the South 
Atlantic Division, and initiated deployment in the Missouri River 
Division. In fiscal year 1997, to date, we have completed deployment in 
the Missouri River Division and initiated deployment in the Pacific 
Ocean and the Great Lakes and Ohio River divisions. We anticipate 
completing the process in February 1998 with the North Atlantic 
Division.
    The Department of Defense, in the person of Dr. John Hamre, the 
Under Secretary of Defense (Comptroller/Chief Financial Officer), has 
endorsed CEFMS by selecting it as a migratory system for General Fund 
Accounting for the Army and Air Force, and for Defense Transportation 
Business Systems, and by supporting the nomination of CEFMS for the 
1997 Innovations in American Government Award from the Ford Foundations 
and the Kennedy School of Government at Harvard University.
                     program execution and outlook
                              introduction
    Program Execution continues to be very important throughout the 
Corps. In fiscal year 1996, our divisions and districts generally 
succeeded in improving their execution, as measured in terms of 
expenditures. We are continuing to emphasize the importance of meeting 
obligation and expenditure schedules in fiscal year 1997.
    In following discussions, the term ``expenditure'' is substituted 
for ``accrued expenditure.''
                         general investigations
    Scheduled expenditure for the General Investigations (GI) Program 
in fiscal year 1996 was $162 million. We spent $147 million, or 91 
percent of this, and 80 percent of funding available. Performance based 
on funding available surpassed that of the preceding four years.
    Scheduled report production for the program in fiscal year 1996 
included 52 reconnaissance and 25 feasibility reports. The performance 
goal for reconnaissance reports was completion of 47 of the 52, or 90 
percent, within the 12-18-month legislative time frame. We completed 51 
for a performance result of 98 percent. The performance goal for 
feasibility reports was completion of 20 of the 25, or 80 percent, 
within the four-year regulatory time frame for reports of cost-shared 
studies. We completed 24 for a performance result of 96 percent.
    Scheduled expenditure for the GI Program in fiscal year 1997 is 
$161 million. Our goal is to expend 95 percent of this amount. Based on 
first quarter results, we will exceed that goal.
    We continue to streamline the study process. New start 
reconnaissance studies are being budgeted and funded at the $100,000 
level and prosecuted under the Expedited Reconnaissance Study Program. 
Additional steps will be taken to shorten the time and reduce the cost 
of feasibility studies.
    The President's Budget provides for $150 million in new funding for 
the GI Program. The outlook for program workload is healthy. We will 
continue striving to enhance our performance during these times of 
limited resources.
                         construction, general
    Last year we scheduled and expended $1.10 billion and carried an 
unexpended balance of $279 million over into fiscal year 1997. This 
unexpended carryover was significantly less than our historical 
average. Moreover, it included $154 million earmarked in law for 
specific activities or projects which could not be accomplished that 
year.
    In fiscal year 1997, $1.36 billion was available for expenditure in 
the CG account at the beginning of the year. Expenditures scheduled for 
this year total $1.10 billion, leaving $250 million to be carried over 
into fiscal year 1998. Again, this is significantly less than our 
historical average. At the end of the first quarter expenditures were 
on schedule at $204 million.
    The President's Budget provides for $1.39 billion in new funding 
for the CG Program in fiscal year 1998. It also provides for advance 
new obligation authority of $576 million for the four-year fiscal year 
1999-2002 period for completion of 65 specifically authorized projects 
scheduled for completion during that period. Of the fiscal year 1998 
amount, $380 million is for full funding of 12 new starts and other new 
work projects, and an undetermined number of new starts under the 
Continuing Authorities Program (CAP). These new start funds will be 
expended over the five-year fiscal year 1998-2002 period. The balance 
of $1,013 million, reflecting reduction for savings and slippage of the 
total program, is for specifically authorized continuing projects and 
remaining items, including projects under CAP. About $978 million of 
this is for specifically authorized projects.
    We expect to expend $1.16 billion in fiscal year 1998, and to carry 
over about $490 million unexpended into fiscal year 1999. About $328 
million of the carryover will be used to complete the fully funded 
fiscal year 1998 new starts, including any under CAP. The rest 
represents the balance of funding for Congressional adds not completed 
in fiscal year 1998.
                   operation and maintenance, general
    In fiscal year 1996, we expended 94 percent of funds available for 
expenditure to operate and maintain water resources projects for the 
benefit of navigation, flood damage reduction, hydropower generation, 
recreation, and environmental stewardship. Our normal workload was 
financed with the $1.7 billion regular appropriation. In addition, we 
received a $30 million emergency supplemental appropriation to repair 
projects damaged by flooding in the Northeast and Northwest parts of 
the Nation at the end of 1995 and in early 1996.
    Our fiscal year 1997 O&M Program performance is off to a good start 
and should equal or exceed that of fiscal year 1996. The regular 
appropriation is once again $1.7 billion. This has been augmented by 
another emergency supplemental appropriation, this time of $19 million, 
to fund repair of projects impacted by Hurricane Fran in September 
1996. Our projects have also been damaged by other natural disasters, 
including more flooding in Western states, Tropical Storm Josephine, 
and Hurricane Dolly.
    On March 19, 1997, the President submitted an emergency 
supplemental funding request to Congress for $39 million. This request 
has been subsequently modified by our updated estimate of costs related 
to recent flood disasters, bringing the total request to $112 million. 
This amount would be used to repair facilities damaged by winter 
flooding in the Pacific Northwest, California, and the Ohio and 
Mississippi and River Basins, as well as facilities damaged by other 
natural disasters.
    Fiscal year 1998 performance is expected to be on a par with, or 
greater than, that of fiscal year 1996. We are working on ways to 
constrain the growth of the O&M Program in order to achieve a balance 
in the overall Civil Works Program, explained below, under Balancing 
New Construction and O&M.
            flood control, mississippi river and tributaries
    In fiscal year 1996, we expended 98 percent of funds available for 
expenditure on the MR&T Project. Of the unexpended funds, $4 million 
was left unobligated with an additional $7 million obligated but 
unexpended. The unobligated carryover was about 1 percent of new budget 
authority for fiscal year 1996.
    We anticipate excellent financial performance on the MR&T Project 
in fiscal year 1997.
    Updated estimates since the President's March 19 emergency 
supplemental request to Congress contain $13 million for the MR&T 
account. This amount would be used to pay for emergency operation 
activities in fighting winter flooding in Louisiana and other 
Mississippi River Basin states and to repair federal levees and other 
facilities damaged by the flooding.
    The President's Budget request for $266 million in new funding for 
the MR&T Project continues the recent downward trend of funding for 
this program. We anticipate completion of the Yazoo Basin Demonstration 
Erosion Control work in Mississippi, and transferring implementation of 
any remaining work to the local sponsor.
                           regulatory program
    The President's Budget provides for $112 million in new funding for 
the Regulatory Program. The increase of $11 million over the fiscal 
year 1997 appropriation is necessary to maintain a high level of 
service to the public and to continue implementation of the President's 
Wetlands Plan of August 1993.
    Requested new funding supports a labor intensive initiative to 
increase the roles of States and local entities in wetlands regulation 
through development of programmatic general permits. This will enable 
State and local entities to handle permitting responsibilities for 
specific activities in certain areas, which will greatly reduce Corps 
workload. Funds will also be used to develop special area management 
plans for environmentally sensitive geographic areas and watersheds.
    Additionally, requested new funding supports a program, authorized 
in WRDA90, to certify individuals as wetland delineators in order to 
improve quality of jurisdictional determinations by private consultants 
and reduce need for Corps verifications in the future.
    As mentioned earlier, we propose a new special fund for the 
Regulatory Program, with collections to be derived from fees to the 
cost of processing and evaluating permit applications for commercial 
activities. These fees would only be assessed against commercial 
applicants, and would be assessed on sliding scale in accordance with 
the complexity of the permit evaluation. No fees would be assessed 
against private landowners. We estimate that collections for this fund 
would amount to $7 million in fiscal year 1998 and increase to $14 
million, annually thereafter.
                 flood control and coastal emergencies
    The President's Budget provides for $14 million in new funding for 
the Flood Control and Coastal Emergencies (FC&CE) Program. This is 
sufficient for administration of the Disaster Preparedness and 
Emergency Response programs, in the absence of major events. Such 
events requiring extraordinary flood-fighting or subsequent repair of 
damaged water management facilities, would necessitate additional 
funding from the proposed contingency fund. The President's Budget 
proposes the establishment of a contingent emergency reserve to fund 
anticipated needs arising from both natural and man-made disasters. 
This fund would be used by the Departments of Agriculture, Interior, 
and Transportation, the Federal Emergency Management Agency, the Small 
Business Administration, and the Corps to cover costs that exceed 
budget assumptions for these types of requirements.
    Under this program, we provide leadership and expertise in 
preparation for and response to disasters throughout the Nation. Since 
receiving our emergency mission in 1941, we have developed and 
sustained an engineering organization capable of responding to both 
natural and technological disasters, such as hurricanes, floods, 
earthquakes, and oil spills. This mission also entails supporting 
deployed U.S. Forces and accomplishing reimbursable work for other 
agencies, particularly, the Federal Emergency Management Agency.
    Recently, we responded to several natural disasters, including the 
Northeast and Northwest Floods of 1996, and Hurricanes Bertha and Fran 
along the Atlantic coast. We are working to restore flood protection 
and normalcy to distressed communities in the Western United States, 
especially in California, recently ravaged by severe flooding. Damage 
assessments will continue as the floodwaters recede.
    On March 19, 1997, the President submitted an emergency 
supplemental funding request to Congress for $252 million. The March 19 
request has been subsequently modified by our updated estimates of $25 
million for additional needs, bringing the total request to $277 
million. This amount would be used to pay for emergency operation 
activities in fighting winter flooding in western States, including 
California, Idaho, Oregon, and Washington; to repair federal and 
nonfederal levees that are in the Corps program damaged by this 
flooding; and to implement nonstructural alternatives to levee repair, 
as appropriate. It would include $75 million in contingency funding for 
natural disasters, including potential spring flooding in northern 
California, the Northwest, and the Midwest. The supplemental also 
requests authorization of construction of an emergency outlet at Devils 
Lake, North Dakota, and appropriation of $2 million to begin 
construction of the emergency outlet. The supplemental request also 
includes an advance appropriation request of $30.5 million to complete 
construction in fiscal year 1998 of the emergency outlet. While the 
Secretary is urged to expedite the process, the project must fulfill 
all NEPA requirements, meet all obligations under the 1909 Boundary 
Water Treaty with Canada, and consider the views and sovereignty of the 
Spirit Lake Nation.
    Additionally, we supported security and contingency planning for 
last Summer's Olympic Games in Atlanta, and, currently, are providing 
support for U.S. forces in Bosnia.
                            general expenses
    The President's Budget provides for $148 million in new funding for 
GE, allocated approximately 70 percent, 20 percent, and 10 percent for 
labor, fixed, and discretionary costs, respectively. It includes 
funding for deployment of CEFMS at the remaining four division offices.
    The budget supports projected staffing of 1,257 FTE's in the 8-
division organization. This represents less than 5 percent of the Civil 
Program workforce, and includes headquarters staff of less than 500 
FTE's, representing less than 2 percent of the workforce.
                   balancing new construction and o&m
    Consistent with reducing discretionary spending to balance the 
federal budget, we expect that funding for the Civil Works Program will 
be constrained into the foreseeable future. In light of this, we are 
challenged to prioritize our work in order to distribute, or 
``balance,'' funding among programs, especially those providing for 
construction of new water resource management facilities, on the one 
hand, and for care of existing facilities and facilities under 
construction, on the other.
    Programs providing for construction of new facilities include the 
CG Program and construction part of the MR&T Project. Programs 
providing for care of facilities, existing and scheduled to come on 
line, include the O&M Program and maintenance part of the MR&T Project.
    Presently, we are addressing this challenge by reviewing the O&M 
Program for cost saving opportunities. In the coming months, we will be 
exploring ways of working within constrained resources to provide 
justified levels of service. Our goal is to align provided and demanded 
levels of operation and maintenance service.
                    corps vision and strategic plan
    Finally Mr. Chairman, I would like to present, briefly, the new 
Corps Vision and Strategic management plan. The Corps is a great 
organization with a long proud history. But, every organization needs 
to be challenged to improve and must adapt to the many changes 
occurring in our Nation at every level. We need to have an end state in 
sight and a road map to get there. Here is our Vision for the Corps.
    The U. S. Army Corps of Engineers is:
  --the world's premier engineering organization, trained and ready to 
        provide support any time, any place.
  --a full-spectrum engineer force of high quality, dedicated soldiers 
        and civilians: a vital part of the Army; the engineer team of 
        choice--responding to our Nation's needs in peace and war; and 
        a values-based organization--respected, responsive, and 
        reliable.
  --changing today to meet tomorrow's challenges!
    As you can see, the Vision touches on many different areas. All of 
these are important, but several are critical. The first of these is to 
focus on our customers, as embodied in ``The Engineer Team of choice.'' 
The second is to build on the successes in responding to our Nation's 
needs in peace, with the Civil Works Program being the cornerstone. The 
third is to become more relevant to the Army, where our roots are.
    This Vision and Plan were arrived at through a rigorous ongoing 
program, which will continue for my entire tenure. The team that helped 
me to develop this consisted of employees and commanders at every 
level, customers from both the Civil Works and Army side and other 
stakeholders in our success. The resulting strategic management plan, 
augmented by the campaign plans, will start moving us toward that 
Vision. You can expect a series of changes over the years, that will 
keep what is good, significantly improve some weak areas, and posture 
us for the next century.
                               conclusion
    The President's Budget for the Corps of Engineers provides stable 
funding with a balance among competing priorities. However, we must 
continue to find ways to reduce our costs and shift more of those 
remaining to direct beneficiaries of our services. Meanwhile, we will 
do our very best to execute the Civil Works Program for maximum benefit 
of the Nation.
    We have a long history of improving production of the Civil Works 
Program and achieving greater customer satisfaction, while conserving 
resources. A recently passed milestone in this history was formalized 
Corps-wide institution of project management, given impetus by 
nonfederal cost sharing requirements of WRDA86. This led to marked 
improvement in program execution and greatly improved partnerships with 
state and local governments.
    Lately, we have been improving business processes, including the 
decision document review and approval process, project cooperation 
agreement execution process, and partnering process. Improvements 
adopted have eliminated duplication of effort; empowered districts to 
accomplish work formerly done at higher levels; expedited policy and 
nondepartmental reviews, yielding more timely answers for districts; 
and preset compatible goals for stakeholders in projects, enabling win-
win outcomes with less rework, claims, and lawsuits. These improvements 
have further improved our production and customer satisfaction, while, 
simultaneously, enabling us to participate significantly in ongoing 
efforts to downsize government.
    And now, my Strategic Plan commits us to dramatic improvement in 
performance and customer satisfaction within available resources, with 
a goal of revolutionizing our effectiveness in problem solving--
continually maximizing actual and potential values of our organization 
to the Civil Works Program and the Army, and, thereby, the Nation. 
This, in conjunction with our ongoing implementation of GPRA, promises 
even greater improvements in future business operations.
    Finally, the Energy and Water Development Appropriations Act, 1997, 
challenges us to accomplish a large workload in the current year. I am 
confident in our ability to meet that challenge, in continuing to 
benefit our great Nation.
    Thank you Mr. Chairman and Members of the Committee. This concludes 
my statement.

                                     FISCAL YEAR 1998 DIRECT PROGRAM FUNDING                                    
                                     [New obligation authority in thousands]                                    
----------------------------------------------------------------------------------------------------------------
                                                                                    Fiscal year                 
                         Source/account                          -----------------------------------------------
                                                                    1996 actual    1997 assumed   1998 requested
----------------------------------------------------------------------------------------------------------------
Appropriation:                                                                                                  
    Discretionary: General Investigations.......................        $121,767        $153,872        $150,000
    Construction, General:                                                                                      
        General Fund (Finally):                                                                                 
            Incremental Funding.................................         744,447       1,003,255         949,015
            Full Funding........................................  ..............  ..............         374,050
                                                                 -----------------------------------------------
              Total.............................................         744,447       1,003,255       1,323,065
                                                                 ===============================================
    Harbor Maintenance Trust Fund:                                                                              
        Inland Waterway Trust Fund:                                                                             
            Incremental Funding.................................          58,750          78,687          63,985
            Full Funding........................................  ..............  ..............           6,200
                                                                 -----------------------------------------------
              Total.............................................          58,750          78,687          70,185
                                                                 -----------------------------------------------
              Total (General Fund, Initially)...................         803,197       1,081,942       1,393,250
                                                                 ===============================================
    Operation and Maintenance, General:                                                                         
        General Fund (Finally)..................................       1,184,674       1,167,743       1,098,400
        Harbor Maintenance Trust Fund...........................         523,607         519,272         489,600
        Special Recreation User Fees Fund.......................          22,298          29,000          30,000
                                                                 -----------------------------------------------
          Total (General Fund, Initially).......................       1,730,579       1,716,015       1,618,000
                                                                 ===============================================
    Flood Control, Mississippi River and Tributaries............         307,434         310,374         266,000
    Regulatory Program:                                                                                         
        General Fund (Finally)..................................         101,000         101,000         105,000
        Proposed Permit Fees....................................  ..............  ..............           7,000
                                                                 -----------------------------------------------
          Total (General Fund, Initially).......................         101,000         101,000         112,000
                                                                 ===============================================
    General Expenses............................................         151,500         149,000         148,000
    Flood Control and Coastal Emergencies.......................         145,000          10,000          14,000
    Oil Spill Liability Trust Fund..............................             850  ..............  ..............
                                                                 ===============================================
      Total (General Fund, Initially)...........................       3,361,327       3,522,203       3,701,250
                                                                 ===============================================
    Mandatory:                                                                                                  
        Permanent Appropriations................................          12,324          13,271          13,075
        Coastal Wetlands Restoration Trust Fund.................          38,372          43,000          44,000
        Rivers and Harbors Contributions........................         174,907         198,900         123,086
                                                                 -----------------------------------------------
          Total.................................................         225,603         255,171         180,161
                                                                 ===============================================
          Total.................................................       3,586,930       3,777,374       3,881,411
----------------------------------------------------------------------------------------------------------------

                          new army corps team

    Senator Domenici. Thank you very much. General Fuhrman, I 
understand you have no statement.
    General Fuhrman. No; I do not, sir.
    Senator Domenici. What we have got is almost a whole new 
top leadership team, correct, 8 months old.
    General Ballard. About 8 months for me, sir.
    Senator Domenici. The Secretary is more than that.
    Mr. Lancaster. But not much.
    Senator Domenici. A year, they say. Is that about right?
    Mr. Lancaster. About 16 months.
    Senator Domenici. Let me recognize the presence of Senator 
Kohl. Would you like to make a statement?

                         STATEMENT OF HERB KOHL

    Senator Kohl. I have a couple of questions, Mr. Chairman.
    Senator Domenici. Do you need to go somewhere at a time 
certain?
    Senator Kohl. I would just take 5 minutes.
    Senator Domenici. Proceed.
    Senator Kohl. Thank you, Mr. Chairman. I am delighted to be 
a member of this committee. I appreciate having the opportunity 
to work with you and members of the committee.
    Senator Domenici. It is a pleasure to have you on board.

                          fox river locks, WI

    Senator Kohl. General Fuhrman, as you know, in my State of 
Wisconsin, we have a system of very historic locks called the 
Fox Locks, which have been a navigation project operated by the 
Corps of Engineers since 1872. Currently, the locks continue to 
be significant from a historic and recreational boating 
perspective, but commercial use of the locks is now less 
significant. The Corps has proposed to turn over the locks to 
the State of Wisconsin, to let the State and the Fox River 
communities decide what to do with the system. The problem is 
that the locks, under prior management, have been allowed to 
fall into a state of disrepair, and the cost of rehab and/or 
closure will be very high.
    I understand the State of Wisconsin and the Corps of 
Engineers have been in negotiations over this issue of 
disposition of the locks, however, the main question of how 
much funding the Corps will be offering to the State when the 
locks are turned over is still not resolved. Can you tell us 
the status of those negotiations and the time line for letting 
the Wisconsin negotiators know how much funding the Corps is 
offering to compensate for the transfer?
    General Fuhrman. Sir, the Detroit district engineer has 
sent a letter to Mr. George Meyer, the secretary of the 
Wisconsin Department of Natural Resources, just a couple of 
days ago. This letter provides the best estimate of the maximum 
potential lump sum settlement the Federal Government could 
provide to the State of Wisconsin for assuming responsibility 
for all or part of the navigation portion of that system, sir.

                            lafarge dam, wi

    Senator Kohl. All right. One other question, General 
Fuhrman. In the mid-1960's, Congress authorized the Corps of 
Engineers to build a flood control dam on the Kickapoo River at 
Lafarge. In order to proceed with the project, the Corps of 
Engineers condemned 140 farms, covering an area of about 8,500 
acres. To Lafarge, a community of only 840 people, that is a 
significant loss. With the loss of economic activity, the 
community eagerly awaited the completion of the dam and the 
creation of a lake that promised to provide some economic 
benefits in the form of recreational and tourism activities. 
But because of budgetary and environmental concerns the project 
was never constructed and the people of Lafarge were left 
holding the bag.
    We now have a solution to the problem, and it involves 
returning the land back to the State of Wisconsin for the 
creation of a large preserve. A provision was included in last 
year's water resources bill to authorize this land transfer, 
and a small amount of funding to accompany the transfer. A 
small amount of funding was provided in fiscal year 1997 for 
preliminary work on this project. Since it is the assumption of 
most all parties involved that a larger amount of funding will 
be provided for the process in 1998, I was alarmed to see no 
money requested in the Corps' 1998 request.
    It is my intention to request funding for this project for 
1998. Would you explain why no funding was included in the 
Corps' budget request?
    General Fuhrman. As you are aware, Senator, in 1997 the 
Appropriations Committee authorized $20,000 for us to gather 
data and do preliminary work with the State of Wisconsin and 
various Federal, State, and local interests. In addition to 
that, we have reprogrammed an additional $75,000 into that 
effort in fiscal year 1997 to move forward with that.
    From the 1998 perspective, it is a matter of budget 
priorities. Subject to the usual qualifications our capability 
for that work would be about $450,000.
    Senator Kohl. If Congress provides funding in 1998, you 
will cooperate with that?
    General Fuhrman. Yes, sir.
    Senator Kohl. All right, that would be fine.
    Senator Domenici. What he is saying, Senator, is that they 
could only use $450,000 this year. That is what he is telling 
you.
    Senator Kohl. But there was no funding requested in 1998.
    Senator Domenici. So, if we get $450,000 for you, that is 
the full capability that they could apply to the project. I did 
not say when we get it yet, I said if.
    Senator Kohl. Can I count on it, Mr. Chairman, in 1998?
    Senator Domenici. Well, let us see what we can count on you 
for. [Laughter.]
    Senator Kohl. Thank you, Mr. Chairman. I have another 
question, but I will insert it in the record. I thank you very 
much for your support.
    Senator Domenici. Sorry about your basketball team this 
year.
    Senator Kohl. Yes, well, as we always say, there is next 
year.
    Senator Domenici. You do a great job. I do not know how you 
can put up with this for so long, but it is sort of like me 
trying to get a balanced budget
    Senator Kohl. Well, I will tell you one thing. We did not 
do badly this year because I do not pay them enough. They get 
paid in full.
    Thank you, Mr. Chairman.
    Senator Domenici. Senator Craig, do you have some 
questions?
    Senator Craig. Mr. Chairman, I do. But, I think both you 
and I want to leave at about 10:45, do we not?
    Senator Domenici. Shortly around there. When I have to 
leave, if nobody else is here--I understand Senator Byrd will 
be here shortly, and we will let him go as acting chairman for 
as long as he wants.

                         recent idaho flooding

    Senator Craig. Mr. Chairman, I will have several questions 
then that I will submit for the record, but let me very quickly 
say that the Army Corps and I and the State of Idaho have a 
close working relationship. We got a lot closer in the last 2 
years with two major flood incidents, one just concluded in 
early January in 13 counties. In fact, it is interesting to 
note that the Army Corps was on the ground in a small community 
in north Idaho last night because we were flooding again. So, 
while it was not as dramatic, certainly, as what is going on in 
the Dakotas, it is dramatic for the citizens of Julietta. I 
must say for the record that Lieutenant Colonel Curtis in Walla 
Walla has been a delightful man to work with. He has been most 
responsive.
    We have got several situations, though, and one of them--
and I say this, Mr. Chairman, and I think it responds to, 
General, your reorganizational concerns and how that gets 
handled. In early January, we had several major counties under 
water. We had our major north-south highway breached in nine 
locations. Idaho and the Pacific Northwest was besieged by a 
Chinook climatal transition, warm, lots of rain, and lots of 
snow. The community of Emmett, the city of Emmett lost a major 
dike, and some limited flooding occurred. In some instances 
major flooding occurred.
    But the dike had to be quickly rebuilt. This was a dike 
that, when reviewed by the Corps, the levee itself I should 
say, when it looked at the benefits of fixing the levee 
outweighed the cost by about a 16-to-1 ratio. Yet it took, from 
the time of the incidence, from the time the city itself 
requested assistance, it took a grand total of 52 days. Now, 
that does not seem like a lot, I guess, in the mix of things. 
But this was January, and it was still snowing and raining, and 
the major run off is about to occur in Idaho now, my mention of 
flooding last night. So what had happened was a unique 
situation that deserved tremendously quick response. We got it 
done. Fortunately we got it done. We could have had flooding 
within just a few days or weeks later.
    I only use that as an example to suggest to you that areas 
for approval, levels of approval from the time the district 
office signs off, such as Walla Walla, to review the field 
officer's recommendations and make approval of emergency work--
I guess is it necessary that it goes to Seattle and then it 
comes to Washington? I mean, in these instances where it is 
everyone's obvious recognition of the problem and the ratios 
are tremendously high, yet I got on the phone here encouraging 
the Washington office to get with it. It just so happened that 
at the time I was doing that, the applications were on the 
desk, approval was being made.
    But my point is 2 months, just about 2 months at a time 
when this city is basically exposed and bare to its needs to 
repair a problem. So, I wish you would look at that. I have 
talked with Colonel Curtis about it. I have to think there are 
times when these actions can move along a good deal more 
quickly.
    General Ballard. Senator, I appreciate your comments. If I 
recall correctly, I think you and I talked about this on the 
telephone.
    Senator Craig. Yes, we did.
    General Ballard. I am looking into that. It is an area that 
concerns both the Secretary and I on how quickly we address 
situations of this nature. I will take your comments under 
advisement. We will definitely consider how we can speed some 
of these processes along.
    Senator Craig. Well, I appreciate that, because response, 
especially in communities where a levee is down and they are 
bare to exposure of an additional run off coming--I mean, there 
are just circumstances where the normal process does not fit. 
There are times where it should fit.

                     levee maintenance requirements

    Here is another problem--a year ago in February, another 
major flooding incident in north Idaho, the community of St. 
Mary's underwater, aerial photos of it. I was over it in Army 
helicopters looking at it, and on the ground with Senator 
Kempthorne and Congressman Chenoweth. Same situation as Grand 
Forks, hundreds of homes under water, major levees breached in 
a better than 100-year flood. The community of St. Mary's 
received a block grant from the Economic Development 
Administration to fix two severely damaged levees in the middle 
of the town. A condition of the grant was that the levees' 
repair met Corps of Engineers standards. As a result, all trees 
greater than 2 inches in diameter were removed from the levee.

    impact of endangered species act on levee maintenance and repair

    Since then, U.S. Fish and Wildlife Service got into it, 
Audubon Society got into it, section 7 ESA consultation process 
began. A year later, we are seeing that situation now at near 
flood stage again, and we are in a battle over trees and 
habitat. I think we are going to get it worked out, but my 
point is we could have destroyed a lot of people's properties 
again.
    While I know this problem was not caused by the Corps, I 
would appreciate any comments you have and an analysis of the 
effects of the Endangered Species Act on your ability to 
respond quickly. First off. And second off, are you aware of 
the legislation in the House that would exempt flood control 
activities from the Endangered Species Act, and has the Corps 
taken a position on it?
    General Ballard. I think this requires a two-part answer. I 
will give you my answer to your questions, and defer to the 
Secretary for any additional comments he may have. First of 
all, we support the Endangered Species Act.
    Senator Craig. Sure, we all do.
    General Ballard. Now, there are some cases where the act 
has precluded effective maintenance of some of our flood 
control projects, and it is a matter of sequence and the timing 
of when we do that work. That has occurred.
    Senator Craig. I would suggest that the loss of the levee 
in Emmett this year was probably a result of the inability to 
get in-stream and do necessary maintenance over the last 
decade. We had tremendous buildup and movements of gravel bars 
and that kind of thing in a flood prone area, and we just 
simply cannot get to them anymore. Now we are thousands, if not 
millions, of dollars later, additional property damage and some 
loss of life, still trying to figure out a way to get around 
it.
    General Ballard. We are currently evaluating that. I would 
tell you that it is my opinion that there have been cases where 
the Endangered Species Act has possibly impacted on our 
maintenance capability. We have not determined or seen any 
indication, at least that I am aware of, where the act has 
contributed to failure of a project due to a lack of 
maintenance. We are currently assessing that.
    The other part of your question is whether or not I am 
supportive of an exemption, I think?
    Senator Craig. Exemption--there is a piece of legislation 
in the House now that would exempt flood control activities 
from ESA.
    General Ballard. Mr. Secretary.
    Senator Craig. First of all, it is very nice to see you 
again, Secretary Lancaster.
    Mr. Lancaster. Good to see you. First of all, we believe 
that we are not inhibited in emergency work by the Endangered 
Species Act, because there are waivers that exist which allow 
us to take immediate action, and then to catch up the ESA 
provisions following the emergency. We believe that that is 
adequate for us to meet our emergency needs, and do not believe 
in the California instance, which is the impetus for this 
legislation to which you refer, we do not believe in any case 
were we inhibited in our doing the work, the emergency work 
necessary.
    Our concern with that legislation is the breadth of that 
language is such that in our opinion it will completely 
abrogate the Endangered Species Act in a wide range of 
activities that have nothing to do with emergencies, because 
ongoing maintenance, ongoing construction of new flood control 
structures that would be totally exempted from the Endangered 
Species Act we believe is far broader than is necessary to 
respond to emergency work, especially in light of the fact that 
we believe that emergency work has not been hampered in any way 
by the ESA. So we would oppose that legislation as being overly 
broad and not necessary to respond to emergencies.
    Senator Craig. Martin, one of the things that is happening 
on the ground, two instances, ESA and the Clean Water Act--in 
the instance of ESA, the word on the ground is the moment a 
flood happens, go like heck. Get in the stream, fix it, and get 
out before the Feds get there, because you will be stopped. Or 
the window is closed of the emergency, no longer does the 
incident of the emergency occur, now we are in the rehab stage. 
And the moment we go to rehab, or reshaping, then we fall under 
all these structures. That is clearly an attitude on the 
ground. I have been involved in conversations where the word on 
the ground is go for it, get in there, redo that thing, 
rechannel, restructure before we have to fall under this thing, 
and then nothing will get done for 1 year or 2 or 3, and cost 
later.
    The second thing is--and I will say, General, your people 
on the ground comment to me about it, the inability to get in-
stream, redirect water because of gravel bar buildup over 
decades and does put levee structures at risk. Levees that you 
constructed, that are under your auspices. The inability to get 
in the stream or to get the permit to do that kind of thing is 
inhibiting, and in my opinion probably this year on the Payette 
and the Weiser Rivers in Idaho ended up costing us money, a 
loss of marvelous agricultural ground, because of the buildup 
over the last decade in those rivers where we could not get in 
and do the appropriate management.
    Mr. Chairman, I have taken enough time. I will have other 
questions. Thank you, gentlemen.

                     endangered species act waiver

    Senator Domenici. Thank you very much. Let me be very 
precise on this issue Mr. Secretary. On repair of levees and 
the like that have been damaged and are in need of repair 
because of flood, do you oppose waiver of the Endangered 
Species Act for a reasonable period of time?
    Mr. Lancaster. Mr. Chairman, it is our belief that we have 
that waiver authority already, and that further broadening of 
that authority is not necessary.
    Senator Domenici. I did not talk about broadening it. I 
talked about that. And you do support that on the basis that 
you think you already have that authority?
    Mr. Lancaster. We believe that we already have it, Mr. 
Chairman.
    Senator Domenici. OK. How long do you think that exists for 
you now?
    Mr. Lancaster. For doing the initial work necessary to 
repair----
    Senator Domenici. What if that takes a long time, 3 years, 
2 years--do you still have it for that period of time if it 
takes that long?
    Mr. Lancaster. Well, during that time we believe we can 
respond to whatever requirements of the ESA occur, if it is 
going to be a long-term rehabilitation project. What we believe 
is necessary is to get in, as Senator Craig said, and to get 
the work done and get out before we get bogged down in these 
kinds of coordination. But if it is a 3 or 4 year project, then 
we believe that there is adequate time in a project of that 
nature to respond to the various requirements of the ESA.

                        mitigation requirements

    Senator Domenici. I guess what is concerning some of us, 
and I understand the House in its counterpart bill is trying to 
address the issue, you may think what they are talking about is 
too broad, you may think it is not needed. But what if it 
happens that additional mitigation related to this repair work 
is required? Should we reach that point where we are talking 
about additional mitigation if we are just repairing the 
facility?
    Mr. Lancaster. Well, the waiver authority that we have now 
allows us to do the emergency work immediately, and then to do 
whatever mitigation is required by the interagency process, 
dealing with Fish and Wildlife and other agencies after the 
fact. The authority that we have now does not waive the 
requirement for mitigation later, it simply allows us to do the 
work immediately and then to take whatever mitigation actions 
are needed after the fact.
    Senator Domenici. I guess the fundamental question is why 
additional mitigation would be necessary. Did we not have a 
structure constructed and mitigated under the Endangered 
Species Act? If we repair or replace it, why should there be 
additional mitigation?
    Mr. Lancaster. Well, oftentimes we are not replacing it 
with exactly the same structure that existed before the storm 
event. In some cases it is, in fact, a modification.

                    level of the civil works program

    Senator Domenici. We will get into that in more detail. I 
have two questions, and then I am going to, from my standpoint, 
leave. As I indicated, Senator Byrd has a series of questions 
for you, and I am going to turn it over to him.
    Mr. Secretary, let me go through your statement a bit and 
see if I can clarify something. On page 2 of your statement you 
indicate that the amount requested by the President for Corps 
Civil Works Program for 1998 exceeds the 1997 appropriation by 
$180 million, but because of changes in financing procedures 
for new construction starts, the amount to be spent in 1998 is 
approximately $280 million less than 1997. Your statement also 
says that the President's budget proposes to cancel, rescind, 
about $50 million of 1997 construction with general 
appropriations to offset increases necessary in other high 
priority programs.
    Now, this does not make sense to me. It seems to me you are 
saying it is going up, but it is really coming down. Which is 
it?
    Mr. Lancaster. It is going up because of the 
administration's proposal to full fund up front all fixed asset 
to investment, so that we are appropriating in advance the full 
cost of new starts. In some cases, of course, these funds will 
not be needed in the first year, but will be available for 
expenditure as needed so as to expedite the construction of 
these projects without the necessity of coming back for 
periodic appropriations. So that is the reason. It goes up 
because of the full funding up front of projects, but the 
amount that we will have available is less because some of that 
is not actually going to be spent in this first year.
    Senator Domenici. OK. Now, we are not on board on this new 
process yet. I hope you understand that, this advance funding. 
First of all, what I look at is, if I look at your entire 
package, then the logical progression of that is that under 
full funding concept, which includes a $200 million wedge for 
new starts annually into the future, if that would leave the 
Corps at some point in time with a $200 million construction 
program down the line some place as projects underway are 
completed. Is this the formal goal of this administration?
    Mr. Lancaster. The administration's goal is, as is the case 
with many other Federal construction programs unrelated to the 
Corps of Engineers, to full fund up front all capital 
investment. The $200 million wedge is for the first time 
putting into our 5-year projection new starts, something that 
we have never done before. It may very well be that if full 
funding is adopted as a philosophy of the committee and of the 
Congress and it is determined that $200 million a year for new 
starts is inadequate, that that is a matter to be discussed as 
a part of the budget deliberations.
    However, the approach that the administration is taking 
here is to put the Corps of Engineers on the same footing with 
other Federal agencies which do, in fact, fully fund their 
construction at the beginning of the project. We are one of the 
unique agencies that has had annual funding for many years.
    Senator Domenici. A lot of us are not so sure we ought to 
get rid of the incremental approach to funding. Frankly, I want 
to make sure that if we were, and I am not suggesting this 
subcommittee is going to do this, but if we were to go with 
this wedge funding scheme--fund all the new starts up front. I 
am not sure that we would not be committing that about $200 
million is the total amount we will ever get, that this 
administration, at least for the next 3\1/2\ years, is going to 
say $200 is all you get, and I do not know that we would agree 
to that. I just want you to know I will not. This committee 
might, but I doubt it.
    I hope that I have hit on a couple of points that you 
concur with me on, Senator Byrd.
    Senator Byrd. You have, you have, Mr. Chairman, and I would 
say right on. I liked what I heard you say.
    Senator Domenici. Thank you, Senator. I am going to proceed 
to this other meeting.
    Mr. Lancaster. We will be happy to discuss this full 
funding matter with the chairman more fully as we proceed down 
the road.
    Senator Domenici. Fine. I want very much to make sure that 
the two people in the Corps know that for the next few months 
we want to work with you very closely. We do not have a big 
staff like you all, but we trust you for giving us honest 
numbers and information, and we are pretty good at it. We want 
to make sure we know where we are going, and we want to make 
sure we can tell Senators what is happening to their projects 
out there. That is very important to this subcommittee.
    Mr. Lancaster. Thank you.

                    full funding of new construction

    Senator Byrd [presiding]. Thank you, Mr. Chairman, and 
thank you, Mr. Secretary, and gentlemen, for your appearance 
and for your testifying. I want to pursue the line of questions 
that was last opened by the distinguished chairman, the 
financing of new construction projects by proposing to provide 
the full amount of funding up front. The proposal appears to 
fund a few selected projects while numerous other projects that 
are capable of proceeding are not funded. Now, I understand the 
argument for this new approach, but how do you think that this 
fixed asset initiative will contribute to improved control of 
cost, schedule, and performance goals on Corps projects?
    Mr. Lancaster. Senator Byrd, at the present time, not 
having full funding in place, it is necessary, with the 
incremental funding basis, to structure our contracts 
accordingly. If you have the money up front, you know that it 
is going to be in place when needed, you can structure your 
contract in a way that is not only more efficient, but also has 
greater certainty for the contractor. The theory is that, that 
being the case, the contractor will give a lower bid than if he 
has to prepare his contract on a basis that has contingencies 
for future reductions in funding or perhaps even in some years 
there not being funding for a multiyear project. If you have 
the money up front, then you can contract in a more efficient 
way, can pay out in a more efficient way.
    As the Senator knows, we have a number of projects where 
the contractor moves much more quickly than anticipated, and 
when that occurs if only a certain amount of money is 
appropriated for that project and he is moving more quickly 
than the money is available, we then have to reprogram funds 
from other projects rather than pay interest on that project.
    Senator Byrd. Has not that approach worked very well during 
this period, especially during this period of tight budget 
constraints?
    Mr. Lancaster. We have tried to make it work as effectively 
as we could. The argument is that you can more efficiently plan 
these projects and more efficiently fund them if you have all 
of the money up front, rather than depend, as we must at the 
present time, on reprogramming or slowing up the project.
    Senator Byrd. Has this new approach as of now ever been 
utilized before?
    Mr. Lancaster. It is, in fact, a process that is used in 
most Federal construction----
    Senator Byrd. No; I am talking about in your area.
    Mr. Lancaster. As far as I am aware, Senator, it has not 
been used previously in the Corps.
    Senator Byrd. My attention is being called to the fact that 
we have been doing it the current way for about 75 years.
    Mr. Lancaster. We are not aware of it being used in the 
Corps projects. It is used for other Federal agencies.

                     informing congress of progress

    Senator Byrd. Yes; well, there is nothing inherent in the 
full funding initiative that will control costs. How do you 
propose to keep the Congress informed regarding the cost and 
schedules for projects if the agency does not have to come back 
and justify its funding each year?
    Mr. Lancaster. Well, we would assume, Senator, that when 
the Congress authorizes, first through the authorizing 
committees and then appropriates the funds, that it is their 
intention that the project be built, and we will simply build 
the project using the funds that have been appropriated and 
according to the contract signed. The hearing process, of 
course, would hold us accountable to doing just that.
    Senator Byrd. So you think that Congress would be kept 
informed regarding the cost and schedules for projects if the 
agency does not have to come back and justify its funding each 
year?
    Mr. Lancaster. Mr. Chairman, we believe that if this 
funding scheme were used, that this would be an element of 
oversight as opposed to a request for funding on an annual 
basis. It would change the manner in which Congress received 
its information and had its oversight over our budget. It would 
not necessarily change the level of information that the 
Congress had, but simply the manner in which that information 
would be transmitted to the Congress. It would be an oversight 
hearing instead of an appropriations hearing.
    Senator Byrd. Well, are you saying that appropriations 
hearings are not oversight hearings?
    Mr. Lancaster. No, sir; by no means. They are, in fact. But 
it would be in a different context. Instead of an annual 
request for funding there would be oversight hearings to 
determine, if it were determined that that was necessary, there 
would be oversight hearings to determine if we were spending 
the funds according to the authorization in the appropriation 
for the fully funded program.
    Senator Byrd. It seems to me that any cost overruns would 
be presented to the committee down the road if we proceed on 
this multiyear project basis with funding fully up front. Cost 
overruns would be presented to the committee down the road, and 
the appropriations committee would be faced with a fait 
accompli. The OMB will control the rate that the project could 
proceed through the level of outlays to the Corps, the level of 
outlays that the Corps is allocated each year.
    So it seems to me to some extent this puts a wall between 
the Congress and its constitutional responsibility of 
oversight. We want to stay right on the scent, s-c-e-n-t, as an 
old hound dog hunter, right on the scent, up close, not let 
that scent grow cold. Do you want to comment further?
    Mr. Lancaster. No, Senator. I am a hound dog hunter too. 
[Laughter.]
    Senator Byrd. General, do you have any comment on this?
    General Ballard. No, sir; I do not have anything to add to 
what the Secretary said.
    Senator Byrd. The budget proposes that Congress appropriate 
$365 million to fund fully 12 projects in fiscal year 1998. 
What is the Corps' estimate as to how much of this $365 million 
can actually be expended in fiscal year 1998?
    General Fuhrman. About $50 million, sir.
    Senator Byrd. Fifty million dollars? How would you see the 
rest of the $365 million, how would you see the flow of the 
remainder? Fifty million the first year would be expended, but 
$365 million would be appropriated. You see, we are not talking 
about full funding for a battleship or an aircraft carrier. How 
would you see the flow of the remainder? What would you see the 
second year?
    General Fuhrman. I do not have the numbers, sir, but that 
would be spread over 5 years, the remaining $315 million spread 
over the remaining 5 years.
    Senator Byrd. Suppose you see the remaining $315 million is 
not going to be enough, you are going to run short. What 
happens then?
    Mr. Lancaster. It would be necessary then, as with all cost 
overruns, for Congress to appropriate the funds to complete--
whether it is an aircraft carrier or a lock and dam project.
    Senator Byrd. Do you not see the overruns being brought to 
the attention of Congress in the fifth year most of the time 
rather than in the second or the third year?
    Mr. Lancaster. There is certainly the potential for that, 
Senator, but again, it is the theory at least that the 
oversight hearings during that 5-year period would keep the 
Congress fully informed on the expenditure rate so that it 
would not be a surprise at the fifth year.

                        full funding of wrda 96

    Senator Byrd. Do you have an estimate of the total amount 
of funding necessary to fund fully all of the new project 
authorizations contained in the omnibus water authorization 
bill passed last year?
    General Fuhrman. The total is around $5.4 billion, of which 
$3.8 billion of that would be Federal dollars, sir.
    Senator Byrd. If dollars remained constricted for the out-
years, how would the administration determine which projects to 
fund fully in any given year when the vast number of authorized 
projects are taken into consideration?
    Mr. Lancaster. That would simply be, as is currently the 
case, a weighing on the part of the White House, of its 
priorities with the funds that are available. They would then 
be submitted in a request and it would be up to Congress to 
actually make the final determination by the appropriations 
process as to which of those projects would be fully funded and 
begun in any given year.
    Senator Byrd. I happen to be of the old school that 
believes the determination of priorities remains here, not at 
the White House.
    Mr. Lancaster. The White House must, however, have its own 
priorities in the request. It is, as I have indicated in my 
most recent answer, up to the Congress to ultimately set those 
priorities, and I concur fully with the Senator's statement.

                         fate of large projects

    Senator Byrd. Another concern with the proposed policy is 
that it might create a disincentive to large capital-intensive 
projects such as inland navigation, for which a large project 
is the most effective solution. Would it be possible, Mr. 
Secretary, that the full funding approach would cause the 
organization to underengineer solutions out of a belief that 
such approaches would fare better in the quest for funding?
    Mr. Lancaster. Well, there certainly is, I guess, that 
potential. However, we believe that we have demonstrated in 
this budget request with the example of the Houston-Galveston 
Harbor a method in which very large projects can be segmented 
with requests in the budget for full funding of segments of the 
project as opposed to doing it all in one fully funded 
appropriations request.
    Senator Byrd. So you think it would indeed be possible that 
the full funding approach might cause, might bring about an 
underengineering solution?
    Mr. Lancaster. I say there is always the potential for 
that. We do not believe that the Corps would do that, because 
we are an organization made up of professional engineers and 
planners. We would propose what we think is the very best 
solution to the problem, and would do so, if it were a very 
large project, in a way that could still fit within the fully 
funded philosophy.

             impact of full funding on helping communities

    Senator Byrd. I am asking a question now on behalf of 
Senator Domenici, the chairman. How does this proposal increase 
our ability to help more communities in need of infrastructure 
improvements or help, for example, commercial navigation to be 
more efficient and competitive in the world marketplace?
    Mr. Lancaster. That, of course, is not the objective of the 
fully funded philosophy. The philosophy is to more efficiently 
use the funds that are available for projects by allowing them 
to be built on a basis that gets the maximum amount of project 
for the dollars available. It may very well result in some 
communities getting projects sooner than others, but in both 
cases, the community that gets the project first and the 
community that gets the project second, will get projects for 
less cost than if they were both to receive them but on a 
stretched out basis using incremental funding.
    Senator Byrd. Mr. Secretary, you have stated the 
philosophical side. There is a practical side also. I think my 
question really had to do with that practical side, which we 
have to consider in this equation. There will be communities 
that will be in need of infrastructure improvements. There will 
be a need for commercial navigation to be more efficient and 
competitive in the world marketplace. So I am interested in 
philosophy and in the philosophy behind the administration's 
approach here, but I am also very interested in the day-to-day 
practical side of things, and I do not see this new approach as 
being conducive to our helping more communities in need of 
infrastructure improvements, and smaller projects, for example, 
that might be very, very vitally needed by smaller communities 
in rural areas.
    So I am conveying my concern about the impact of this 
proposed policy. I think it will have an impact on the efforts 
of communities around the country to address their water 
resource management requirements. And while the administration 
is to be commended for at least acknowledging the need for new 
starts, I do not believe it is prudent at this time to fund a 
selected few while many other communities are forced to wait 
until funding becomes available.
    Now, if we were not subject to the very strict 
discretionary caps, it might be possible to consider a new way 
of financing large public infrastructure investments. We are 
going to have some projects in West Virginia that we think are 
very important, and they are going to be pushed aside if this 
approach is used. I cannot be unmindful of that, philosophy 
aside. The consequence of fully funding a limited number of 
projects is to create further delay and opportunity for cost 
growth on other projects in the pipeline that are also needed 
and that are ready to proceed.
    In West Virginia there are people who know that they will 
have to relocate as a result of the rehabilitation of the locks 
and dam at Marmet along the Kanawha River. Now that 
authorization is finally in place, the Corps' proposal to 
include funding to initiate real estate activities was cut out 
of the budget in order to shift resources to the fully funded 
projects. Now, I cannot explain this to my colleagues on the 
basis of philosophy, so I urge my colleagues to reject this 
policy which will have a few winners, but many losers.
    Do you care to comment?
    Mr. Lancaster. No, Senator Byrd, I do not care to comment 
further.
    Senator Byrd. General Ballard, do you care to comment?
    General Ballard. No, Senator, I do not care to comment.

                          marmet lock and dam

    Senator Byrd. Let us talk about Marmet Lock and Dam 
project, now that I have brought up the subject. The Corps is 
in the process of initiating a major lock replacement program 
at Marmet Lock and Dam along the Kanawha River. The Kanawha 
River might be referred to as a Ruhr Valley, when we think in 
terms of the giant chemical industries that are in the movement 
of coal. This project was authorized in the Water Resources 
Development Act of 1996, but unfortunately the fiscal year 1998 
budget includes funding only to complete the preengineering and 
design activities, and no funding is requested to begin the 
necessary real estate acquisition which must occur before 
construction can proceed.
    If funding is provided, is the Corps ready to proceed with 
real estate acquisitions for those individuals whose homes and 
businesses must be relocated to accommodate this project?
    General Fuhrman. The answer to that, Senator, is yes.
    Senator Byrd. What is the Corps' estimate of land 
acquisition that could be conducted in fiscal year 1998 if 
funding were to be provided?
    General Fuhrman. Subject to the usual qualifications, we 
could use $8 million for engineering and design, and land 
acquisition, sir.
    Senator Byrd. Why were those funds not included in the 
budget?
    Mr. Lancaster. Again, Senator, it was necessary in order to 
achieve the allocations of funding within the Corps. Some 
needed projects of necessity had to be dropped out so that we 
would come within the allocation given to us.
    Senator Byrd. Well, West Virginia has been in the dropped 
out category a long time in many respects, and I do not want to 
see us continue to be dropped out. I understand that funding 
was included in the Corps' initial request. Is that correct?
    Mr. Lancaster. That is correct, Senator.
    Senator Byrd. But it was not included in the final amounts 
approved by OMB. Would Marmet have received funding in the 
fiscal year 1998 budget request if there were no full funding 
initiative?
    Mr. Lancaster. That, of course, Senator, is difficult to 
say. In our recommended budget it was present. If we had not 
been subject to this new funding philosophy, it is difficult to 
know what would have ultimately been approved for the request 
that was ultimately submitted to the Congress.
    Senator Byrd. But does it not stand to reason that it would 
have stood a better chance of being included?
    Mr. Lancaster. Yes, Senator, because there would have been 
funds available for a broader range of projects if we had not 
fully funded those that are present in the request.
    Senator Byrd. Thank you, Mr. Secretary. Let me say again I 
am disappointed in this new approach, because it is obvious 
that while the Secretary cannot say with definiteness that 
Marmet would have been included otherwise, it is also clear 
that, as the Secretary stated, it potentially might have made 
the grade. So, I am disappointed that the Corps' fiscal year 
1998 budget does not include the funding necessary to proceed 
with real estate acquisition and other preconstruction 
activities at Marmet Lock and Dam. The people in that community 
are supportive of the work that is to be done there, I 
understand. Does the Corps know of any objections from people 
in the locale?
    Mr. Lancaster. Senator, it was my pleasure to visit Marmet 
last year and to meet with the people there. There appears to 
be broad and deep support for this project in the community.
    Senator Byrd. The people in that community are anxious to 
have the uncertainty which has clouded their lives removed, and 
I will do whatever I can do to ensure that the fiscal year 1998 
Energy and Water bill provides sufficient funding to allow the 
Corps to get on with the business of acquiring properties and 
allowing my constituents to relocate so that the project can 
get underway.

                 greenbrier river flood warning system

    Now, if we might shift to the Greenbrier River. Last year 
this committee agreed to provide the funding necessary to 
install early flood warning systems in the Cheat and Greenbrier 
River basins. These are intended to be interim measures while 
the Corps continues to assist these communities as they seek to 
address their long-term flood control requirements. What is the 
status of your efforts to install these systems in the 
communities in these areas?
    General Fuhrman. Senator, equipment will be procured, and 
it is scheduled for installation beginning in October 1997.
    Senator Byrd. The Corps of Engineers is in the process of 
completing phase 2 of its evaluation report regarding possible 
flood control protection for the Greenbrier River basin. This 
assessment will reflect information updated following the 
devastating floods that occurred during 1996. Is the Corps 
still on schedule for completion of the report this fall?
    General Fuhrman. Yes, sir; that is still scheduled for 
October 1997 also.
    Senator Byrd. Do you anticipate being able to provide an 
array of alternatives for the local communities to consider in 
evaluating how best to address their flood protection 
requirements?
    General Fuhrman. Yes, sir.
    Senator Byrd. Do you anticipate that the Corps will endorse 
one of the alternatives, or would it simply provide comparable 
information regarding each of the options?
    General Fuhrman. What we would like to do, sir, is develop 
consensus within the community on one of those plans.
    Senator Byrd. So you are not likely to present alternatives 
until that hope is realized?
    Mr. Lancaster. I think the report will be issued in October 
even if there is not consensus, but the hope is that consensus 
will develop around one of the recommendations.
    Senator Byrd. If a local consensus then develops around one 
of the alternatives presented this fall, what will be the next 
step to address flood protection in the Greenbrier River basin?
    Mr. Lancaster. It would then be necessary, Senator, for an 
authorization to be requested for the project around which 
consensus has been built. And following that, of course, the 
appropriation.
    Senator Byrd. If local opinion remains divided, and it is 
divided about how to proceed, what options are available to the 
Corps in order to continue addressing flood control 
requirements along the Greenbrier River?
    Mr. Lancaster. At that point, Senator, it would be up to 
the Congress to make that determination as to which project is 
to be authorized and funded. That would not be a prerogative of 
the Corps to make a decision for the community, but rather that 
its elected officials do that.
    Senator Byrd. Absent any authorization to proceed with any 
alternative, would the Corps follow normal channels and conduct 
further study if money were provided, and prepare a decision 
document for policy review by Corps headquarters and the 
Congress?
    Mr. Lancaster. If that were the manner in which Congress 
directed us to proceed, yes, sir.
    Senator Byrd. Does the Corps have any cost estimate or a 
range of possible cost estimates for the various alternatives?
    Mr. Lancaster. At this point we do not, because we do not 
have the alternatives. As alternatives are developed, a measure 
of that would be an estimated cost.
    Senator Byrd. This subject has been discussed with the 
Corps and with the people of the area involved. Are you saying 
that you do not have any estimates of the range of these cost 
estimates, because various alternatives have been discussed?
    Mr. Lancaster. That is a part of the process, Senator, to 
develop not only the alternatives but the costs, because the 
cost will affect the consensus which you are able to achieve in 
the community, because they will need to know what their cost 
sharing would be if cost sharing is required, and the nature of 
the recommendations so that they can balance the various 
elements of cost and effectiveness of the project.
    Senator Byrd. Now, I have heard of options that range from 
$60 million to $125 million. Any comment?
    Mr. Lancaster. I do not have information with regard to 
that, but General Fuhrman may.
    General Fuhrman. I could not comment on the accuracy of 
those numbers.
    Senator Byrd. General Ballard?
    General Ballard. No, sir; I am not privy to any estimates 
along those lines, sir. I would not care to comment on it.
    Senator Byrd. Well, whatever the cost, and whatever the 
alternatives, and whatever the option exercised, it is going to 
become more expensive as time passes.
    Mr. Lancaster. That is why it is so important for consensus 
to be developed in the community, and we hope that the Corps 
can work with the community in developing that consensus.

                         impact of full funding

    Senator Byrd. If the new philosophy is implemented and goes 
into effect, how might it affect the situation we are talking 
about here in the Greenbrier Valley?
    Mr. Lancaster. That, of course, would depend on the total 
cost of the project and how that stacked up with other projects 
that were being considered by the administration in setting its 
priorities for requesting funds in subsequent years' 
appropriations.
    Senator Byrd. If a project were to be selected, what would 
be the cost sharing requirements for construction?
    Mr. Lancaster. I assume it would be the normal 65-35 
percent cost sharing established by Congress last year.
    Senator Byrd. May I say, Mr. Secretary, I remain supportive 
of the efforts of the residents of the Greenbrier River basin 
to address their flood control needs, and in this respect I 
should recognize the efforts that have been put forth by 
Representative Rahall, Nick Rahall, who represents this 
particular district that we are discussing. He is very, very 
concerned, and he has made a proposal, I believe. I have not 
endorsed any particular alternative, but have sought to ensure 
that the Corps of Engineers has the resources necessary to 
provide these citizens with adequate information regarding the 
alternatives.
    Is the Corps to stay on schedule for the completion of the 
updated study this fall so that consensus hopefully can develop 
around a viable option? I share the desire of many of my people 
to have the studies come to an end and get on with the business 
of taking action to preclude the potential for future flood 
damages in the Greenbrier River basin.

                        reprogramming procedures

    Now, with respect to reprogramming procedures, we are in a 
constrained budget environment. Nevertheless, project 
proponents are necessarily concerned about the impact that 
reprogrammings may have on donor projects as replenishment 
becomes more and more difficult. As a stalwart defender of 
Congress' role in determining spending priorities, I share that 
concern. What is your policy with regard to keeping Congress 
informed when the Corps needs to reallocate funds among 
projects?
    Mr. Lancaster. Senator, any reprogramming request exceeding 
the guidelines of the committee is immediately reported to 
committee, and committee then has the authority to act, if it 
chooses to do so.
    Senator Byrd. Therefore, you consult with Members from the 
affected States, or do you just report any reallocations to the 
appropriations committee after the fact?
    Mr. Lancaster. We generally report when we make the 
reprogramming request. If there is any anticipation that there 
will be an adverse impact on a project, then we do attempt to 
discuss that with the Member affected. But in reprogramming, we 
try always to only reprogram from projects that cannot use the 
funds immediately and where we anticipate that the funds will 
be available by various means before those funds are needed. 
Oftentimes this has been the case. All of this year we have 
been struggling to meet the needs all over the country where 
there have been unanticipated disasters. We sometimes are 
scrambling for the dollars. We hope that we do not adversely 
impact any Member's project of interest, but if so then we do 
attempt to discuss that with the Member in advance.
    Senator Byrd. I would expect to be informed of any 
reprogrammings that impact on West Virginia.
    Mr. Lancaster. Yes, sir.
    Senator Byrd. Before the fact. General Ballard.
    General Ballard. Yes, sir.
    Senator Byrd. I can appreciate the Corps' desire to retain 
as much flexibility as possible, but I must express my 
reservation about the consequences of too much flexibility 
absent congressional approval during a time when replenishment 
is so difficult. I encourage you and the Corps to make every 
effort to keep all those affected by possible reprogrammings 
informed so that we do not learn about these situations through 
panicked phone calls from our constituents who are often the 
local sponsors on these projects.
    I have several other questions. I will submit those for the 
record. Is there anything that I should know at this point 
about West Virginia projects?
    Mr. Lancaster. Senator, I think you know all there is to 
know about West Virginia projects, so I would not even suggest 
that there is something you do not know that you should.
    Senator Byrd. That is a very dangerous question. 
[Laughter.]
    I hope you fully realized that, because that shifts the 
burden, you see.

                     Additional committee questions

    All right, the following Senators have questions which will 
be submitted for the record, Senator Reid, Senator Murray, 
Senator Burns, Senator Hollings, Senator Domenici, and Senator 
Byrd.
    Senator Byrd. Do you have anything further?
    Mr. Lancaster. No, Senator. Thank you for your attention 
and time today.
    [The following questions were not asked at the hearing, but 
were submitted to the Corps for response subsequent to the 
hearing:]
                Questions Submitted by Senator Domenici
major challenges facing the u.s. army corps of engineers over the next 
                               few years
    Question. Mr. Lancaster, General Ballard, and General Fuhrman, what 
are the major challenges facing the U.S. Army Corps of Engineers over 
the next few years, and what are you doing to meet those challenges?
    Mr. Lancaster. Consistent with reducing discretionary spending to 
balance the federal budget, we expect that funding for the Civil Works 
Program will be constrained into the foreseeable future. In light of 
this, we are challenged to prioritize our work in order to distribute, 
or ``balance,'' funding among programs, especially those providing for 
construction of new water resource projects, on the one hand, and for 
care of existing facilities and facilities under construction, on the 
other.
    Presently, we are addressing this challenge through review of the 
O&M Program for cost saving opportunities. In the coming months, we 
will be exploring ways of working within constrained resources to 
provide justified levels of service. Our goal is to align provided and 
demanded levels of operation and maintenance service.
    Also, by improving the Corps' efficiency, we intend to make better 
use of the resources available to us.
    General Ballard. Mr. Chairman, the Corps is a great organization 
with a long proud history. But, every organization needs to be 
challenged to improve and must adapt to the many changes occurring in 
our Nation at every level. To this end, we need a guiding ``vision.'' 
Our new vision is to be:
  --the world's premier engineering organization, trained and ready to 
        provide support any time, any place.
  --a full-spectrum engineer force of high quality, dedicated soldiers 
        and civilians: a vital part of the Army; the engineer team of 
        choice--responding to our Nation's needs in peace and war; and 
        a values-based organization--respected, responsive, and 
        reliable.
  --changing today to meet tomorrow's challenges!
    All of these premises are important, and three are critical. The 
first is that we remain ``the engineer team of choice,'' as determined 
by satisfied customers; the second is that we build on the successes of 
responding to our Nation's needs in peace, with the Civil Works Program 
being the cornerstone. The third is that we become more relevant to the 
Army, where our roots are.
    The ``strategic plan'' for achieving our vision has been formulated 
through a rigorous ongoing program, which will continue for my entire 
tenure. The resulting plan, augmented by ``campaign plans,'' will 
enable us to start moving toward that vision. You can expect a series 
of changes over the years that will keep what is good, significantly 
improve some weak areas, and posture us for the next century.
    General Fuhrman. Mr. Chairman: The President's Budget for the Corps 
of Engineers provides stable funding with a balance among competing 
priorities. However, we must continue to find ways to reduce our costs 
and shift more of those remaining to direct beneficiaries of our 
services. Meanwhile, we will do our very best to execute the Civil 
Works Program for maximum benefit of the Nation.
    We have a long history of improving production of the Civil Works 
Program and achieving greater customer satisfaction, while conserving 
resources. A recently passed milestone in this history was formalized 
Civil-Program-wide institution of project management, given impetus by 
nonfederal cost sharing requirements of WRDA86. This led to marked 
improvement in program execution and greatly improved partnerships with 
state and local governments.
    And now, our strategic plan commits us to dramatic improvement in 
performance and customer satisfaction within available resources, with 
a goal of revolutionizing our effectiveness in problem solving--
continually maximizing actual and potential values of our organization 
to the Civil Works Program and the Army, and, thereby, the Nation. 
This, in conjunction with our ongoing implementation of GPRA, promises 
even greater improvements in future business operations.
    level of support the corps' civil works program has within the 
                             administration
    Question. Mr. Lancaster, on page 2 of your statement you indicate 
that the amount requested by the President for the Corps' Civil Works 
program for 1998 exceeds the 1997 appropriations by $180 million, but 
because of changes in financing procedures for new construction starts, 
the amount to be spent for fiscal year 1998 is approximately $280 
million less than fiscal year 1997. Further, it also states that the 
President's budget proposes to ``cancel'' (rescind) $50 million of 
fiscal year 1997 Construction, General appropriations to offset 
increases necessary in other, higher priority programs of the President 
in fiscal year 1997.
    Mr. Secretary, the above statement seems to be contradictory to an 
earlier statement on page 1 which indicates that the President's budget 
supports a relatively steady funding level for the Civil Works program. 
Could you help the subcommittee better understand what level of support 
the Corps' Civil Works program has within the Administration?
    Mr. Lancaster. Given the President's plan to balance the federal 
budget by fiscal year 2002, the Corps' relatively strong budget and 
flat funding ceiling of nearly comparable magnitude in the outyears of 
its 5-year program are very encouraging. The plan provides adequate 
amounts for our traditional missions. It enables continuing, with few 
exceptions, ongoing planning, design, and construction projects. 
Additionally, it provides considerable funding for new construction 
starts in each of the five years, supporting the Corps' traditional, 
highly developed, and important role in water resources problem-solving 
for the Nation.
    Full funding for acquisition of fixed assets will allow us to 
coordinate far more intensively, quickly, and effectively with local 
sponsors in determining optimum work and funding schedules based on 
capabilities and constraints of both parties. Both parties should 
benefit significantly--the Corps, because of more efficient work 
schedules; and the customer, because of greater certainty of financial 
obligation and faster delivery of needed facilities and expected 
benefits.
     full funding initiative and advanced appropriations proposals
    Question. The budget request for fiscal year 1998 includes two, new 
major initiatives: one dealing with full funding new construction 
starts for fiscal year 1998; and the other involves providing advanced 
appropriations for fiscal years 1999 through 2002 to fully fund the 
Federal share to complete 65 continuing construction projects.
    Why is a change of this type needed? What evidence, e.g. studies or 
analysis, support the conclusion that the historic incremental funding 
approach is flawed or has caused increased costs? What specific 
examples can you point to where incremental funding has caused project 
costs to increase?
    Mr. Lancaster. Mr. Chairman, incremental funding works quite well 
during times when budgetary ceilings match or exceed the needs of the 
continuing construction program. As projects complete, new projects 
take their place in the program. That is not the current situation, 
however. This year's budget preparation started with project schedules 
that were based on completing projects in the most efficient manner. 
However, after a portion of the fiscal year 1998 budget ceiling was set 
aside for new construction starts, high priority projects, and 
remaining items, the balance of available ceiling for the remainder of 
our continuing projects was approximately 62 percent of the funds 
needed to meet the recommended schedules. The result was stretched out 
project completions and increased costs due to inflation over the 
extended time periods as compared to the project schedules that could 
be achieved without funding constraints. Consequently, 170 projects had 
their schedules and costs revised this year to reflect our constrained 
budgetary ceiling. This is the third year in a row in which such an 
adjustment has had to be made in a large number of projects. If these 
projects had been fully funded at the outset, they could have proceeded 
on the most efficient schedules possible.
    Question. The logical progression under the full funding concept, 
which includes a $200 million wedge for new starts annually into the 
future, would leave the Corps with a $200 million construction program 
down the line as projects underway today are completed. Is this, in 
fact, a goal of the Administration?
    Mr. Lancaster. No, Mr. Chairman. The total Federal cost for new 
construction starts has averaged about $1.4 billion per year from 
fiscal year 1990 through fiscal year 1996. A $200 million per year cap 
would be significantly smaller than the recent average. This amount, 
however, was set to provide funds for new starts in the fiscal years 
from 1999 to 2002, when normal assignment of ceiling would have 
provided little or no funds for new construction starts.
    Question. How do you respond to concerns that proposals such as 
these are just another way to reduce funding for the Corps' Civil Works 
program over time down to a level which can accommodate only a very 
small number of water resource development projects?
    Mr. Lancaster. In the past, new work was always considered to have 
a lower priority than the continuing program, and there were years in 
which either the executive or legislative branch did not recommend or 
fund new construction starts for budgetary reasons. The present 
proposal assumes that a predictable level of funding will be available 
every year for new construction starts, regardless of the progress in 
completing ongoing work. In that sense, it reverses historical 
priorities, and allows new investments to proceed in a fiscal 
environment that might otherwise discourage funding of new initiatives. 
It is very important that the Civil Works program continue to address 
new water resource problems and work with our present study sponsors to 
address identified problems
    Question. How does this proposal increase our ability to help more 
communities in need of infrastructure improvements, or help, for 
example, commercial navigation to be more efficient and competitive in 
the world marketplace?
    Mr. Lancaster. We believe that full funding for these projects will 
improve our ability and that of local project sponsors to manage and 
complete projects on time and within budget. At the district level, 
there are a number of practical advantages. The most time and cost 
efficient sequencing of design, land acquisition, and construction can 
be followed. Lump sum fully funded construction contracts can be used, 
rather than incrementally funded continuing contracts. Local sponsors 
and contractors can be provided with firmer information about project 
schedules. Project slowdowns will be avoided due to insufficient 
incremental funding to award subsequent contracts. Clear accountability 
by districts for overall accomplishment of project construction on time 
and within budget is possible. The end result will be to allow our 
limited budget authority to be used on more badly needed projects than 
we can presently afford to pursue.
                          completion schedules
    Questions. What impact do these proposals have on the completion 
schedules of other ongoing projects in the Civil Works program? Please 
provide for the record a list which shows the expected completion 
schedule for all construction projects for fiscal 1996, 1997, and 1998; 
along with a brief explanation of why the schedule has changes.
    Mr. Lancaster. As I indicated before, fiscal year 1998 new start 
proposals will have little or no impact on the completion of other 
projects because the schedules had already been stretched out for the 
ongoing projects and the new start projects were allocated additional 
budget ceiling over and above the ceiling without new starts to 
implement the full funding proposal. I will provide a list for the 
record.
    [The information follows:]
    [GRAPHIC] [TIFF OMITTED] T10AP24.000
    
    [GRAPHIC] [TIFF OMITTED] T10AP24.001
    
    [GRAPHIC] [TIFF OMITTED] T10AP24.002
    
    [GRAPHIC] [TIFF OMITTED] T10AP24.003
    
    [GRAPHIC] [TIFF OMITTED] T10AP24.006
    
    Question. How would regional balance be kept under the full funding 
proposal? Is regional balance important?
    Mr. Lancaster. The Civil Works program is a nationwide program that 
addresses infrastructure needs that are common to all parts of the 
country. Every year, in making our budget recommendations we 
specifically examine our choices to insure that the program contains a 
balanced workload, both as to project types and regional distribution. 
If we simply let a calculation set the program's priorities, we might 
find ourselves in a situation where our relationship to regional 
interests was stronger than our relationship to the Nation's goals. We 
might also find ourselves losing valuable engineering skills in 
portions of the country where, in fact, the nation has need of those 
skills.
    Question. I understand that the Corps is proceeding with Division 
Restructuring as required by law. Could you describe how the new 
structure is designed to meet the Corps' current and future operational 
needs?
    General Ballard. Let me start by pointing out that all projections 
indicate that funding for the Corps Civil Works and Military Programs 
will continue to decline over the next several years. Consequently, it 
makes sense to appropriately shape our executive direction and 
management structure as program dollars decrease.
    In developing this plan, we considered several principles. First, 
of course, was the provisions of Public Law 104-206. Second, we wanted 
to maintain a geographical balance within the continental United States 
and ensure that major watersheds would continue to be managed under one 
division headquarters. For example, all of the Mississippi River basin 
is now under one division. We also wanted to minimize district 
realignments, sustain our customer focus, maintain our regional 
relationships with established interests, and minimize personnel and 
workload disruptions. Finally, we also wanted to optimize support to 
military forces in the Pacific. We did this by transferring Alaska 
District to the Pacific Ocean Division, thereby aligning the Corps 
organization in the Pacific with that of the Pacific Command (PACOM).
    Question. What are some of the important considerations facing the 
Corps as you proceed with implementation?
    General Ballard. Each division office performs four essential 
functions. These are command and control over subordinate districts; 
program management; quality assurance; and regional interface. My 
primary consideration is ensuring each division is resourced and 
organized to adequately perform these functions throughout their 
respective regions.
    Also of concern to me is how we communicate with our people during 
this transition. I need to ensure they are kept informed and adequately 
provided for as we implement the new organization.
    Finally, I want to ensure our customer service is not adversely 
affected by these changes. My intent is that our reorganization is 
transparent to our customers and that they will continue to receive 
quality products and services from their districts as they did before.
    Question. Now, part of the restructuring moved the Albuquerque 
District from the Southwestern Division to the South Pacific Division. 
I also understood that the restructuring and move of the Albuquerque 
District would not effect the current mission of the District, both 
Civil Works and Military Construction. General Ballard, do I have your 
commitment that the mission and activities, both Civil and Military, of 
the Albuquerque District will not be changed or reduced in accordance 
with this understanding?
    General Ballard. Yes. Under this plan, Albuquerque District is 
transferred to South Pacific Division with all Civil and Military 
missions, activities, functions, staffing levels, and workload intact.
                restructuring of the corps of engineers
    Question. What are the near and longer-term savings anticipated 
from restructuring and when do you expect to realize those savings? Can 
additional savings be realized under the new organizational structure, 
and over what period of time? Are you aware of anything that would 
significantly impact these savings?
    General Ballard. The anticipated annual savings from the 
restructuring plan for fiscal year 1999 are estimated at approximately 
$2 million and are expected to grow to $19 million by fiscal year 2002, 
with an estimated annual cost avoidance of $20 million thereafter. 
These savings are in addition to the savings we have realized from 
ongoing internal initiatives undertaken to date, which have resulted in 
a net reduction of 228 FTE since fiscal year 1995. For the period from 
fiscal year 1995 to fiscal year 1998, savings from these reductions 
alone have grown to a projected fiscal year 1998 annual savings of 
about $20 million. Therefore, by fiscal year 2002, our total projected 
annual savings from the fiscal year 1995 base are estimated at $40 
million. We fully anticipate achieving these savings with minimal 
adverse impacts on staffing.
    Question. What is your recommendation on how to proceed to maximize 
the potential savings from restructuring?
    General Ballard. Let me begin by saying that I envision little or 
no immediate savings from this restructuring plan. We have already come 
a long way, through voluntary restructuring initiatives, reducing our 
Executive Direction and Management workforce by about 29 percent since 
1989. But we were left with too much organizational structure. The plan 
implemented on April 1 allowed us to reduce organizational structure to 
a level consistent with our program and funding. In essence, we have 
already realized much of the savings this reorganization has to offer. 
What this plan does do is provide the flexibility to shape the size of 
our workforce as appropriate, consistent with future Congressional 
funding.
    Question. What actions has the Corps already taken to bring about a 
simpler structure and efficiency of operation? What additional actions, 
if implemented, would contribute to a more efficient and effective 
Corps operation?
    General Ballard. The Corps voluntarily initiated restructuring 
actions in 1989. We have reduced our Washington headquarters staff by 
about 24 percent. The headquarters now accounts for less than 2 percent 
of our total work force, making it one of the leanest headquarters in 
Washington. We completed a major reorganization of our division 
headquarters, which resulted in divesting divisions of operating 
functions (such as technical design review) and focussing on the four 
primary division level functions of command and control, quality 
assurance, regional interface, and program management. Our division 
headquarters now account for only another 3.5 percent of our total 
workforce. So we have already come a long way, reducing our Executive 
Direction and Management workforce by about 29 percent since 1989. This 
represents a significant savings.
    The Corps has experienced a number of changes over the last few 
years. I believe it important for the immediate future to consolidate 
the gains we have made and get our new structure established. 
Consequently, I do not envision any additional large scale 
organizational changes in the near future.
    However, it is clear that available dollars will continue to 
decline in the foreseeable future. The Corps will need to restructure 
in the sense of adjusting internal processes and structure to align 
with that reality. I recently released my vision and long term strategy 
for the Corps. One of the goals of that strategy is to revolutionize 
effectiveness. I have selected two of my divisions as test-beds to 
experiment with ways to improve our business processes, systems, and 
organizational structure at the district and division level. We will 
share the lessons learned from these experiments and spread them, as 
appropriate, throughout the Corps. We are also going to study the 
processes, systems, and organization of our Washington headquarters. I 
therefore foresee continuous assessment and--when appropriate--
reengineering of our processes to best meet our customers need.
           contracting out planning, engineering, and design
    Questions. The Conferees included language for 1997 indicating 
their expectation that the Corps would increase the use of the private 
sector in performing planning, engineering and design of Corps water 
resources projects. What is the status of this effort?
    General Ballard. I have assigned targets to each of the divisions 
so that at the end of the year, the Corps will achieve the programmatic 
goals of 40 percent contracting for engineering and 35 percent for 
planning. We are monitoring the execution of each division to insure a 
real increase in contracting to the private sector.
    Questions. What are the current goals and how do they compare to 
the language included in the Conference report for 1997?
    General Ballard. The goals assigned to each division are based on 
their workload mix. While there are differences among divisions, they 
all support the overall programmatic goal for the Corps included in the 
Conference report for 1997.
    Questions. General Ballard and General Fuhrman, do you have any 
concerns regarding this change? How do you expect this initiative to 
affect budgetary and personnel resources?
    General Ballard. I have a few concerns. Although the Corps has 
approximately 1,500 FTE in planning and 4,100 FTE in engineering in our 
division offices and districts, these are spread relatively thin in 
some of our offices. The requirement to increase contracting has 
necessarily caused us to reduce these professionals in most, if not all 
of the locations. It is our estimate that somewhere between 250 and 300 
engineers and planners were or will be eliminated from the Corps as a 
result of the language included in the Conference report for 1997. In 
some of these locations, we are beginning to hit a critical point which 
reduces our ability to respond to natural emergencies and to retain a 
competent workforce. There are few direct budgetary impacts. This comes 
about because of contracting processing costs and the necessity of 
reviewing the product for technical sufficiency. There are also some 
impacts in terms of private sector contractors not being familiar with 
our technical regulations and standards.
    Questions. Does this have an adverse impact on the Corps of 
Engineers capability to respond to national emergencies both civil and 
military?
    General Ballard. Yes. As our professional staff of engineers and 
planners is reduced, so is our capability to respond in a time of 
crisis. A prime example would be the case of the Northridge Earthquake 
of 1994 in California, where the Corps responded with over 700 people 
offering assistance during this disaster. Of this total, over 300 were 
structural engineers, an engineering expertise desperately needed to 
immediately assess safety, damages and impacts. This cadre of highly 
competent, trained, technical expertise is being diminished.
                         reconnaissance studies
    Question. Last year the Congress supported your efficency 
initiative to fund all new reconnaissance studies at $100,000 in an 
effort to return the reconnaissance phase to the traditional concept of 
a relatively short, inexpensive analysis. The Committee has heard from 
several groups that feel that the change will not allow the Corps to 
conduct a thorough study in some cases. The Committee recognized this 
in the Conference report and allowed the Corps to exercise appropriate 
judgment in adjusting the scope of the reconnaissance effort. Could you 
update the Committee on how this initiative is progressing, and what 
processes are in place to allow more complex reconnaissance studies to 
be adjusted?
    What specific guidelines, procedures or policy changes have been 
made or are being considered, to guide the Corps in evaluating the need 
to reduce the cost and shorten the time of reconnaissance studies? 
Provide those guidelines for the record.
    Mr. Lancaster. Planning Guidance Letter 96-3, Expedited 
Reconnaissance Study Phase dated 16 August 1996, provided guidance on 
accomplishing reconnaissance studies at a reduced cost and shortened 
schedule. The goal of the expedited reconnaissance study phase is to 
demonstrate Federal interest and the reasonable prospect of a justified 
project. This approach relies heavily on the use of existing 
information and the expertise of Corps districts, other Federal 
agencies, States, and local governments in developing plans to solve 
water resources problems. The development of a Project Study Plan (PSP) 
is an essential task in the Expedited Reconnaissance Study. A PSP is a 
plan of study which is used to define and manage the development and 
conduct of a feasibility study.
    Existing, readily-available data will be used during the Expedited 
Reconnaissance Study. Determining Federal interest and the reasonable 
prospect of a justified project will be based on professional and 
technical judgement of an experienced study team. To keep the Expedited 
Reconnaissance Study focused, costs low, and durations short, the 
following items will not be included for these studies: (1) development 
and formalized displays of detailed cost estimates (such as MCACES); 
(2) detailed engineering and design studies and data gathering; (3) 
detailed environmental resources evaluations; (4) optimization and 
benefit-cost analyses; (5) detailed real estate information; (6) report 
preparation; (7) formal coordination with other Federal and state 
agencies; and (8) other studies not directly needed to support the 
essential tasks. The requirement for a traditional Reconnaissance 
Report is waived and an abbreviated document called Section 905(b) 
(WRDA 86) Analysis, is to be used. I will provide a copy of Planning 
Guidance Letter 96-3 for the record. (The information follows:)
    Question. How many 1997 reconnaissance studies have been adjusted 
to exceed the $100,000/12 month model, and how many are being reviewed 
for possible expansion? Provide a list for the record which lists these 
studies and a brief explanation of why the expansion is warranted.
    Mr. Lancaster. We have had two requests to increase the scope of a 
reconnaissance study. One study is for the Memphis Metro area. Approval 
was given for a 12-15 month study at a cost of $850,000. Approval was 
based on the lack of available data, complexity of the hydrology and 
the many governmental entities involved. We are currently reviewing a 
request to expand the Chemung Basin in New York and Pennsylvania in 
light of the basin's size and complexity of the possible projects.
                water resources development act of 1996
    Question. Late last year, Congress passed a new water resource 
development authorization bill, the so called WRDA 1996. First, what is 
the magnitude of this authorization in terms of dollars and projects?
    General Fuhrman. Sir, the Water Resources Development Act of 1996 
provides authorizations for approximately $5,222 million for over 320 
projects, programs, studies, and other activities. This amount includes 
non-Federal contributions of $1,375 million, and a Federal cost 
estimate of $3,847 million.
    Question. What priority programs, projects, or activities in WRDA 
1996 have been included in the Corps' 1998 budget request and what 
funding level is being requested for each? Please provide a list for 
the record and a brief description of each.
    General Fuhrman. Sir, the following table lists the sixty-eight 
studies and projects for which funds have been requested in the fiscal 
year 1998 budget which were authorized in the Water Resources 
Development Act of 1996.

                                            [In thousands of dollars]                                           
----------------------------------------------------------------------------------------------------------------
                                              Fiscal year 1998                                                  
Title                Name              ------------------------------                 Description               
                                           PED       CG        OTH                                              
----------------------------------------------------------------------------------------------------------------
     TITLE I--PROJECT AUTHORIZATIONS                                                                            
                                                                                                                
  101American River, CA                    401    44,744  ........  ..........................................  
  101Humbolt Harbor, CA               ........     6,000  ........  ..........................................  
  101Marin Co., San Clemente, CA      ........  ........       150  OTH: Survey Funding.                        
  101Port of Long Beach, CA                160  ........  ........  ..........................................  
  101San Lorenzo River, CA            ........     4,200  ........  ..........................................  
  101Santa Barbara Harbor, CA         ........  ........     1,492  OTH: O&M Purchase of dredge.                
  101Anacostia River, DC and MD       ........    10,799  ........  ..........................................  
  101AIWW, FL                               90  ........  ........  ..........................................  
  101Cedar Hammock, FL                     330  ........  ........  ..........................................  
  101Lower Savannah, GA, SC                 94  ........  ........  ..........................................  
  101Lake Michigan, IL                ........    10,000  ........  (Chicago Shoreline).                        
  101Kentucky Lock and Dam, KY           1,750  ........  ........  ..........................................  
  101Pond Creek, KY                   ........     1,800  ........  ..........................................  
  101Port Fourchon, LA                     129  ........  ........  ..........................................  
  101W. Bank of MS River, N.O., LA    ........     2,385  ........  ..........................................  
  101Blue River Basin, MO                  656  ........  ........  ..........................................  
  101Wood River, Grand Isl, NE        ........       500  ........  ..........................................  
  101Las Cruces, NM                   ........     6,000  ........  ..........................................  
  101Atlantic Coast Lng Isl, NY       ........     1,000  ........  ..........................................  
  101Cape Fear, NC                         330  ........  ........  ..........................................  
  101Wilmington Hrbr, NC              ........    17,512  ........  ..........................................  
  101Duck Creek, OH                   ........     2,120  ........  ..........................................  
  101Willamette River, OR                  520  ........  ........  ..........................................  
  101Rio Grande de Arecibo, PR             665  ........  ........  ..........................................  
  101Charleston Harbor, SC                 200  ........  ........  ..........................................  
  101GIWW, ANWR, TX                        334  ........  ........  ..........................................  
  101Houston Gal Nav Ch, TX           ........   119,100  ........  ..........................................  
  101Marmet Lock, WV                       830  ........  ........  ..........................................  
  101Projects subject to a report:                                                                              
  101    Cook Inlet, AK                    125  ........  ........  ..........................................  
  101    St.Paul Isl Harbor, AK            138  ........  ........  ..........................................  
  101    Terminus Dam, CA                1,100  ........  ........  Kaweah proj auth.                           
  101    Westwego,Harvey Canal, LA         470  ........  ........  Lake Cataouache element PED.                
  101    Chesapeake, MD and DE           1,625  ........  ........  ..........................................  
                                                                                                                
         TITLE III--PROJECT MODS                                                                                
                                                                                                                
  301San Frnsco Rv, Clifton, AZ       ........     2,300  ........  ..........................................  
  301Oakland Harbor, CA               ........     8,935  ........  ..........................................  
  301San Luis Rey, CA                 ........     5,400  ........  ..........................................  
  301Molly Ann's Brook, NJ            ........     7,090  ........  ..........................................  
  301Ramapo Rv, Oakland, NJ           ........       277  ........  ..........................................  
  301Wilmington Hrbr-NE, NC                100  ........  ........  ..........................................  
  301Saw Mill Run, PA                 ........       500  ........  ..........................................  
  301San Juan Hrbr, PR                ........     2,400  ........  ..........................................  
  301Upr Jordan Riv, UT               ........       700  ........  ..........................................  
  301Projects Subject to Reports:                                                                               
  301    Alamo Dam, AZ                ........  ........     1,055  O&M cost for reoperation.                   
  301    Phoenix,AZ (Tres Rios)       ........  ........       400  Feasibility Study Funding.                  
  301    Glenn-Colusa, CA             ........       600  ........  ..........................................  
  301    Comite Rvr, LA                    265  ........  ........  ..........................................  
  301    Arthur Kili, NY and NJ            378  ........  ........  ..........................................  
  301    Kill Van Kull, NY and NJ     ........       429  ........  ..........................................  
  305    Channel Isl Hrbr, CA         ........  ........     3,000  Adds sand bypass to O&M.                    
  307    LA and Lng Bch Hrbr, CA      ........    16,100  ........  Credit for sewer relocation.                
  315    Central and So FL, Canal 51  ........     1,457  ........  Flood Control.                              
  316    Central and So FL,Canal 111  ........    16,300  ........  Environmental Restoration.                  
  334    Acequias Irrig Sys, NM       ........       600  ........  ..........................................  
  342    Lakawanna Rv, Scrntn, PA     ........       425  ........  ..........................................  
  346    Wyoming Valley, PA           ........    13,000  ........  ..........................................  
     Project Reauthorizations:                                                                                  
  363    Alpena Hrbr, MI              ........  ........       324  O&M funded in fiscal year 1998.             
  363    Ontonagon Hrbr, MI           ........  ........       407  O&M funded in fiscal year 1998.             
                                                                                                                
          TITLE V--MISCELLANEOUS                                                                                
                                                                                                                
  506Palm Beach Co, FL                ........  ........       202  ..........................................  
  506Raritan Bay and Sandy, NJ        ........  ........     1,200  Feasibility study.                          
  506Fire Island Inlet, NY            ........       285  ........  ..........................................  
  509Humboldt Hrbr and Bay, CA        ........  ........     1,425  O&M Funding.                                
  509Mare Is Str, San Pablo Bay, CA   ........  ........     1,680  O&M Funding.                                
  509Blair Wtwy, Tacoma Hrbr, WA      ........  ........       600  GI Feasibility Study.                       
  510Chsapke Bay Envrnmtl R&P         ........  ........  ........  ..........................................  
  528Tampa, FL                        ........    75,000  ........  ..........................................  
  537Poplar Isl, MD                   ........    30,621  ........  ..........................................  
  538Smith Isl, MD                    ........  ........      2200  Feasibility Study.                          
  551Hudson Rvr Hab Rest, NY          ........  ........       250  Feasibility Study.                          
  555Drdg Mtrl Prt of NY-NJ           ........  ........     1,250  O&M Funding.                                
  572East Ridge, TN                        300  ........  ........  ..........................................  
----------------------------------------------------------------------------------------------------------------

                  1997 emergency flooding supplemental
    Question. What is the current situation regarding flooding around 
the United States and how is the Corps financing its flood fighting 
operations?
    General Fuhrman. We are continuing to meet emergencies as they 
occur. In January of this year, the Corps, together with other Federal 
and state agencies, responded to the severe flooding in the Western 
United States, especially in California. Next came the March flooding 
in the Ohio River and Mississippi River basins. Most recently, we have 
responded to the floods in the upper Midwest. Needless to say, these 
events have all but exhausted the emergency fund and have placed a 
tremendous financial burden on the Operation and Maintenance, General, 
and Flood Control, Mississippi River and Tributaries, accounts. I hope 
the Congress will quickly approve the President's request for 
supplemental funds so the Corps will be ready to meet emergency 
requirements which will arise from additional Spring flooding and other 
events. Thus far, we have been able to meet requirements by 
reprogramming funds scheduled to be obligated in the fourth quarter. 
The Assistant Secretary of the Army for Civil Works intends to transfer 
unallotted Construction, General, funds to the Flood Control and 
Coastal Emergencies account, under his emergency authority, pending 
receipt of a supplemental appropriation.
    Question. Once funding from Flood Control and Coastal Emergencies 
is exhausted, how would the Corps meet its emergency responsibilities? 
Has the Corps been forced to borrow from other appropriation accounts 
to finance emergency needs? If so, why hasn't the Committee been 
notified as required? Provide for the record a list of those programs, 
projects or activities from which funds have been borrowed.
    General Fuhrman. The Assistant Secretary of the Army for Civil 
Works notified the Appropriations Committees this morning that he 
intends to use his emergency authority to transfer Construction, 
General, funds to the Flood Control and Coastal Emergencies account. 
The funds would be restored upon receipt of a supplemental 
appropriation. Meanwhile, we have been managing the remaining funds in 
the Flood Control and Coastal Emergencies account very carefully. We 
have been using our fourth quarter operating funds, including labor 
money, to meet the present emergencies.
    The source of the Construction, General, funds to be transferred is 
the unallotted funds for the continuing authorities program which are 
not required until the fourth quarter. We do not plan at this time to 
revoke funds from specific projects. With a timely supplemental 
appropriation, there should be only minor impacts on the construction 
program.
                  1997 emergency flooding supplemental
    Question. In mid-March, the President transmitted an emergency 
supplemental funding request for fiscal year 1997 totaling $290.7 
million to address requirements resulting from natural disasters. Did 
that request include funding to address recurring flooding in the 
Pacific Northwest, the Ohio River Basin, the upper Midwest, and the 
impacts of flooding in the lower Mississippi River? What are the Corps 
additional needs, beyond what the President has requested, as a result 
of flooding in these areas and to respond to the continuing devastating 
flooding in the Northern Great Plains.
    General Fuhrman. The President recently amended his emergency 
supplemental funding request to cover changed conditions and 
contingencies. The President's amended request is $401.5 million which 
includes a $75 million contingency to meet new emergencies which may 
occur throughout the Nation in fiscal year 1997. The President's fiscal 
year 1998 budget request includes a centralized disaster account from 
which fiscal year 1998 emergency requirements would be funded. In 
addition to funds for the Flood Control and Coastal Emergencies, and 
Operation and Maintenance, General, accounts, the amended request also 
includes $13 million for the Flood Control, Mississippi River and 
Tributaries, project for emergencies in the lower alluvial valley of 
the Mississippi River.
    Question. Has the Corps made a request to OMB for additional 
funding to take care of these additional needs? What is the potential 
impact on the Corps programs and activities if this additional funding 
is not provided?
    General Fuhrman. The additional requirements for fiscal year 1997 
were submitted to OMB by the Assistant Secretary of the Army for Civil 
Works and are included in the President's amended emergency 
supplemental funding request. If the additional funds were not 
received, the Corps would face some very difficult choices on how to 
accomplish our emergency mission and still continue scheduled work on 
projects and activities. Clearly, we would not have the funds to do 
both.
    Question. What would be the impact if the emergency supplemental is 
limited to the amount requested by the President?
    General Fuhrman. The President's amended request would allow the 
Corps to meet known and anticipated emergency needs in fiscal year 
1997. Funding requirements which arise or carry over into fiscal year 
1998 would be funded from the centralized disaster account requested by 
the President in his fiscal year 1998 budget.
                  1997 emergency flooding supplemental
    Question. The fiscal year 1998 budget request for Operation and 
Maintenance is significantly less than the amount appropriated for 
fiscal year 1997. What effect will the past and ongoing flooding 
situation have on your fiscal year 1998 O&M program?
    General Fuhrman. This year's events have caused much damage to 
Corps projects and navigation channels. To meet emergency dredging and 
repair requirements, we have had to reprogram already-scarce O&M 
dollars from scheduled work, in anticipation of receiving a 
supplemental appropriation. However, some of the slippage in schedules, 
especially dredging, will overflow into fiscal year 1998. This 
situation will be exacerbated if supplemental funding is not received 
on a timely basis.
                   operation and maintenance request
    Question. The total request for Operation and Maintenance 
activities for fiscal year 1998 is $1.618 billion, a decrease of $98 
million below the 1997 level, excluding supplementals. How will this 
reduction impact program, projects of activities in the O&M account?
    Mr. Lancaster. The $98 million decrease includes a $19 million 
supplemental appropriation to repair damages caused by Hurricane Fran. 
Moreover, the regular appropriation of $1.697 million was $34 million 
greater than the President's budget request of $1.663 million for 
fiscal year 1997. Therefore, the fiscal year 1998 O&M budget request of 
$1.618 billion is $45 million, or 2.7 percent, less than our 
recommended program of $1.663 million for fiscal year 1997.
    This reduction is necessary to achieve balance with other important 
priorities, such as investing in new infrastructure, continuing 
construction, and environmental restoration projects. In order to 
achieve this savings, various efficiency measures, combined with a 
concerted effort to target available resources on the most essential 
maintenance, are being pursued to align operation and maintenance 
levels with the demand for services.
    The Corps of Engineers will not be able to conduct business as 
usual with $45 million less than the fiscal year 1997 budget request. 
However, I believe there are opportunities to save money in a program 
of this magnitude and diversity. Accordingly, the budget request 
includes some proposals to adjust service levels and scale back 
maintenance, while still preserving the investment in our water 
resources infrastructure. The budget reflects cost savings in all 
mission areas, to varying degrees. The proposals are not final--they 
are concepts that will be analyzed further, coordinated with our 
customers, and refined as necessary so as to achieve the cost savings 
in an informed and open forum.
    Question. What funding level did the Corps request of OMB for 
Operation and Maintenance for fiscal year 1998 and why do you feel that 
level of funding is more realistic?
    Mr. Lancaster. The Army's recommendation to OMB for the fiscal year 
1998 O&M program was $1.75 billion. Without regard to other budgetary 
considerations, this was realistic because it would support current 
service levels. However, in order to achieve the Administration's goal 
to balance the budget, and still be able to address other important 
investments in new infrastructure, continuing construction and the 
environment, it is necessary to pursue cost saving measures in the O&M 
program.
    Question. Does the fiscal year 1998 budget request contemplate any 
major policy changes in light of this sizable reduction in resources?
    Mr. Lancaster. No, sir. The Army proposes to achieve cost savings 
in the O&M program while continuing to perform all of its traditional 
missions in accordance with authorized project purposes.
    Question. Could you provide for the record a list of those 
activities which would normally be accomplished in fiscal year 1998 
that will not be undertaken because of the funding shortfall?
    Mr. Lancaster. Candidate proposals for achieving the cost savings 
are outlined below. Since they are conceptual in nature, the potential 
savings are preliminary estimates, subject to change as the concepts 
are refined. There are some offsetting increases in other areas, and so 
the estimated gross savings are greater than the $45 million net 
decrease from the fiscal year 1997 budget request.
    Inland waterways. Many of our navigation locks are staffed 24 hours 
per day; but, the utilization varies extensively. Where the utilization 
rates are relatively low, perhaps the same level of service could be 
provided for our customers with something less than around the clock 
availability. Locks with utilization rates of less than 30 percent have 
been initially targeted for further analysis. Estimated savings are $8 
million.
    Shallow draft harbors. The budget request includes funding to 
maintain shallow draft harbors, especially those where communities' 
economies are dependent on commercial fishing and related activities. 
On the other hand, the budgetary climate will challenge our ability to 
maintain harbors where the benefits are primarily recreational. 
Estimated savings are $24 million.
    Recreation. The length of the recreation season should be 
commensurate with visitation at Corps lakes. The recreation season 
could be shortened in some cases, particularly where there are other 
recreation areas close by. Some of our campgrounds might be leased to 
the private sector and relieve the financial burden from the taxpayer. 
Cost savings could also be obtained by reducing the hours of operation 
at visitor centers, especially when visitation is low. Estimate savings 
are $20 million.
    Supporting elements. Since cost savings are contemplated in the 
primary mission areas, activities that support them would also be 
expected to achieve efficiencies. These activities include studies, 
master planning, water control management, and real estate management. 
Estimated savings are $5 million.
    Maintenance. The budgetary climate does not allow us to perform all 
the maintenance that could otherwise be accommodated in a more robust 
budget. We do not believe this will result in unsatisfactory 
performance. It simply means that some work will be deferred until the 
particular feature reaches the point where maintenance is needed to 
keep it in operational working order. Estimated savings are $12 
million.
           upper rio grande water operation model, new mexico
    Question. The Committee provided $210,000 for fiscal year 1997 for 
the Corps to continue joint activities with other Federal agencies in 
the upper Rio Grande River Basin related to reservoir operations, water 
accounting and evaluation of water operation alternatives. What is the 
nature of the requirement and current status of this work?
    General Fuhrman. Model development and other joint activities 
related to the need for an Upper Rio Grande Water Operations Model were 
initiated in fiscal year 1997. In summary, six cooperating Federal 
Agencies finalized a Plan for Development for this model in February 
1997, which outlined the tasks and schedule required for model 
development. The computer hardware and software needed for the river 
and reservoir simulation computer model was selected and obtained. The 
Rio Chama, the major tributary in the study reach, has been selected as 
a Test Case for the model. By the end of 1997, the Test Case will be 
completed and model evaluated for application to the rest of the Middle 
Rio Grande Basin.
    Question. What work is planned for fiscal year 1998?
    General Fuhrman. As you know, sir, the Corps of Engineers 
participation in this work is under the Operation and Maintenance, 
General, (O&M) account. In support of the goal to balance the budget 
and also provide funds for new construction and environmental 
restoration projects, reductions have been proposed in the fiscal year 
1998 O&M budget request. We will be reviewing the O&M program to 
determine the best way to achieve cost savings and still provide 
reasonable levels of service. Efficiency measures, combined with a 
concerted effort to target available resources on the most critical 
maintenance, are being pursued.
    Continuing Construction, General, projects and O&M projects, 
including the Upper Rio Grande Water Operations Model Study, are 
affected by the decision to maintain a balanced Civil Works program. 
There are no ``no cost'' options.
    Due to the constrained O&M budget, specific funding for this work 
could not be identified in the fiscal year 1998 President's budget due 
to funding requirements of other more critical O&M activities. If no 
additional funds are received in fiscal year 1998, the Albuquerque 
District will only make minimal progress on the development of the 
water operations model and other associated activities using extremely 
limited project operation and maintenance funds. Also, the district 
will only be able to minimally coordinate related activities with the 
other Federal Agencies involved.
    However, the allocation of funds available for O&M in the fiscal 
year 1998 budget is ultimately dependent upon Congressional action on 
the budget and, of course, upon actual circumstances in the field as 
Corps Division and District Commanders implement the O&M program during 
the budget year. It is too early to anticipate the precise manner and 
extent to which individual commanders will apply cost savings and 
efficiency measures. We most certainly will make every effort to 
allocate funds among projects and project purposes so as to minimize 
the impact on current users of project services.
    Question. How much funding is needed in fiscal year 1998 and how 
will the funds be used?
    General Fuhrman. Subject to the usual qualifications, a fiscal year 
1998 capability of $1,165,000 is approved for the Corps of Engineers 
share to develop the model and related activities for water management.
    Question. What is the schedule for completing the evaluation of 
alternatives and making a recommendation?
    General Fuhrman. If additional funding is made available, 
completion of evaluation of the computer model program used in the 
``Test Case'' and the final decision on which particular program to 
modify for the full basin could be made in November 1997.
    Question. What other Federal, State or local agencies are involved 
in the work?
    General Fuhrman. The principal federal agencies involved with 
development of the model are the Corps of Engineers; U.S. Fish and 
Wildlife Service; U.S. Geological Survey; U.S. Bureau of Reclamation; 
Bureau of Indian Affairs; and International Boundary and Water 
Commission (U.S. Section). The states include Colorado; New Mexico; and 
Texas; including their respective State Engineers. Local groups include 
the Cities of Albuquerque and Santa Fe, New Mexico.
    Question. Who other than the Corps is providing funding to support 
this work?
    General Fuhrman. The Bureau of Reclamation provides funding.
    Question. Do those agencies have funding requested in their fiscal 
year 1998 budgets?
    General Fuhrman. The Bureau of Reclamation has $170,000 in the 
fiscal year 1998 President's budget for the model in their Middle Rio 
Grande Project under operation and maintenance.
                       devils lake, north dakota
    Question. What can be done in fiscal year 1997 to expedite the 
Devils Lake feasibility study? If so, what needs to be done in the way 
of resources or direction?
    General Fuhrman. Currently, we are focusing our resources on 
measures related to the rising lake level, i.e. the outlet, upper basin 
storage and water quality. In general, little can be done to 
substantially speed up the study process. Some elements of the 
feasibility study could be accelerated with unlimited funding; however, 
critical path items will continue to control the schedule.
 fiscal year 1997 studies and projects not budgeted in fiscal year 1998
    Question. Provide for the record a list of all studies and projects 
funded in fiscal year 1997 for which no funding is requested in the 
fiscal year 1998 budget. Include a brief explanation of why additional 
funding is not requested.
    Mr. Lancaster. I will provide it for the record.
    [The information follows:]
    [GRAPHIC] [TIFF OMITTED] T10AP24.007
    
    [GRAPHIC] [TIFF OMITTED] T10AP24.008
    
    [GRAPHIC] [TIFF OMITTED] T10AP24.009
    
    [GRAPHIC] [TIFF OMITTED] T10AP24.010
    
    [GRAPHIC] [TIFF OMITTED] T10AP24.011
    
    Question. Provide for the record a list showing each study, 
project, or program included in the fiscal year 1998 budget request 
which is not authorized or which will require authorization, 
reauthorization or some type of statutory authority in order for the 
Corps to use funds requested in the 1998 budget.
    General Fuhrman. Sir, all studies, projects and programs for which 
funds have been requested in the fiscal year 1998 budget request are 
authorized.
            unobligated balances at end of fiscal year 1997
    Question. Provide for the record a list by appropriation account of 
statutory earmarked projects, studies or activities that had 
unobligated balances carried over into fiscal year 1997 and where funds 
are expected to be unobligated and carried over into fiscal year 1998. 
Include a brief explanation of why the funds have not been spent, and 
the likelihood of future use of funding.
    General Furhman. Yes sir, I will.
    [The information follows:]
    [GRAPHIC] [TIFF OMITTED] T10AP24.012
    
    [GRAPHIC] [TIFF OMITTED] T10AP24.013
    
                       balance to complete report
    Question. Provide for the record an updated ``balance to complete'' 
report similar to that submitted to the House Energy and Water 
Development Appropriations subcommittee in prior years.
    General Ballard. Yes, sir.
    [The information follows:]

   SUMMARY OF PRECONSTRUCTION ENGINEERING AND DESIGN (PED) AND CONSTRUCTION IN FISCAL YEAR 1998 BUDGET REQUEST  
                                             [Dollars in thousands]                                             
----------------------------------------------------------------------------------------------------------------
                                                               Alocations     Budget       Balance to complete  
                                        No. of    Estimated     through      request   -------------------------
                                       projects    Federal    fiscal year  fiscal year                          
                                                     cost         1997         1998      Programed   Unprogramed
----------------------------------------------------------------------------------------------------------------
PRIOR TO AUTHORIZATION:                                                                                         
    Continuing PED...................       48    $1,627,664      $48,173      $21,673      $24,129   $1,533,689
        Environmental Restoration....        3        29,000  ...........          540        1,110       27,350
        Navigation...................       19       945,446       25,260        7,407        4,417      908,362
        Flood Control................       25       607,218       20,500       13,206       17,102      556,410
        Multiple Purpose.............        1        46,000        2,413          520        1,500       41,567
FULLY AUTHORIZED PROJECTS:                                                                                      
    Continuing PED...................       23     1,222,879       54,689       14,429       11,533    1,142,228
        Navigation...................        8       190,139       12,031        3,440        2,149      172,519
        Beach Erosion Control........        1        13,000        1,434          140          183       11,243
        Flood Control................       14     1,019,740        41,22      410,849        9,201      958,466
                                      --------------------------------------------------------------------------
          Total PED..................       71     2,850,543      102,862       36,102       35,662    2,675,917
                                      ==========================================================================
    Construction New Starts..........        7       499,341       26,406      294,294  ...........      178,641
        Navigation...................        3       358,241       21,849      157,751  ...........      178,641
        Flood Control................        4       141,100        4,557      136,543  ...........  ...........
    Continuing Construction..........      169    35,425,245   16,859,906    1,041,511   12,861,232    4,662,596
        Navigation...................       35     9,123,763    5,358,870      251,880    2,548,408      964,605
        Beach Erosion Control........       21     4,001,445      495,779       65,646    2,995,675      444,345
        Flood Control................       83     9,961,098    4,271,064      392,701    2,197,039    3,100,294
        Multiple Purpose.............        5     2,436,666    1,354,903      146,900      934,863  ...........
        Environmental Restoration....        3       554,000       42,782       34,163      477,055  ...........
        MR&T Features................       22     9,348,273    5,336,508      150,221    3,708,192      153,352
    Major Rehabilitation (CG)........       17       573,552       75,597      120,205      377,750  ...........
        Navigation...................        5        96,562       25,478       30,600       40,484  ...........
        Flood Control................        3        57,050        9,747       15,305       31,998  ...........
        Multiple Purpose.............        9       419,940       40,372       74,300      305,268  ...........
    Dam Safety Assurance.............       11       214,020       24,637       37,276      152,107  ...........
        Navigation...................        1        14,900        1,283          300       13,317  ...........
        Flood Control................        8       102,920       20,245       36,081       46,594  ...........
        Multiple Purpose.............        2        96,200        3,109          895       92,196  ...........
                                      --------------------------------------------------------------------------
          Total Construction.........      204    36,712,158   16,986,546    1,493,286   13,391,089    4,841,237
                                      ==========================================================================
          Grand Total................      275    39,562,701   17,089,408    1,529,388   13,426,751    7,517,154
----------------------------------------------------------------------------------------------------------------


                            PRECONSTRUCTION ENGINEERING AND DESIGN IN FISCAL YEAR 1998 BUDGET (PRIOR TO AUTH)--CONTINUING PED                           
                                                                [In thousands of dollars]                                                               
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Federal cost                                                 Balance to complete     
                          Name                           --------------------------------  Allocation to    Fiscal year  -------------------------------
                                                          Total estimate        PED            date         1998 budget     Programmed     Unprogrammed 
--------------------------------------------------------------------------------------------------------------------------------------------------------
ENVIRONMENTAL REST.:                                                                                                                                    
    LOWER TRUCKEE RIVER, PYRAMID LAKE PAIUTE                                                                                                            
     RESERVATION, NV....................................          13,000             750  ..............             300             450          12,250
    LOWER TRUCKEE RIVER, WASHOE COUNTY, NV..............          13,000             600  ..............             150             450          12,400
    CONEMAUGH RVR BASIN, NANTY GLO ENVIRONMENTAL                                                                                                        
     RESTORATION, PA....................................           3,000             300  ..............              90             210           2,700
                                                         -----------------------------------------------------------------------------------------------
      TOTALS, NO. OF PROJECTS 3.........................          29,000           1,650  ..............             540           1,110          27,350
                                                         ===============================================================================================
FLOOD CONTROL:                                                                                                                                          
    COOK INLET, AK......................................           3,755             330             205             125  ..............           3,425
    TUCSON DRAINAGE AREA, AZ............................          18,000           1,725             100             825             800          16,275
    AMERICAN RIVER WATERSHED, CA........................          29,160          15,510          15,109             401  ..............          13,650
    ARROVO PASAJERO, CA.................................          50,500           4,500  ..............           1,000           3,500          46,000
    KAWEAH RIVER, CA....................................          18,400           2,400             900           1,100             400          16,000
    N CA STREAMS, YUBA RIVER BASIN, CA..................          20,605           1,875  ..............              50           1,825          18,730
    SAN JOAQUIN RIVER BASIN, SOUTH SACRAMENTO COUNTY                                                                                                    
     STREAMS, CA........................................          26,000           1,275  ..............             500             775          24,725
    UPPER GUADALUPE RIVER, CA...........................          42,500           1,500  ..............             750             750          41,000
    CEDAR HAMMOCK (WARES CREEK), FL.....................           8,900             440             100             300              40           8,460
    DES PLAINES RIVER, IL...............................         100,000             880  ..............             400             480          99,120
    INDIANAPOLIS, WHITE RIVER (NORTH), IN...............           7,500             950             492             458  ..............           6,550
    TURKEY CREEK BASIN, KS AND MO.......................          28,600             825  ..............             261             564          27,775
    METROPOLITAN LOUISVILLE, BEARGRASS CREEK, KY........           5,925             925              83             525             317           5,000
    EAST BATON ROUGE PARISH, LA.........................          69,400           2,100           1,165             620             315          67,300
    CROOKSTON, MN.......................................           6,190             750             169             400             181           5,440
    PEARL RIVER WATERSHED, MS...........................          85,056           6,593             355           2,640           3,598          78,463
    BLUE RIVER BASIN, KANSAS CITY, MO...................          12,000           1,800             392             656             752          10,200
    GRAND FORKS, ND.....................................           9,000             750  ..............             178             572           8,250
    ARECIBO RIVER, PR...................................          12,469           1,700           1,035             665  ..............          10,769
    RIO NIGUA AT SALINAS, PR............................           8,888           1,088             150             267             671           7,800
    EAST RIDGE, HAMILTON CO, TN.........................          12,500             500             200             300  ..............          12,000
    METRO CENTER LEVEE, DAVIDSON CO, TN.................           3,100             150  ..............             150  ..............           2,950
    FORT WORTH SUMPS, 14 AND 15, UPPER TRINITY RIVER                                                                                                    
     BASIN, TX..........................................          11,050             405  ..............              70             335          10,645
    GRAHAM, TX (BRAZOS RIVER BASIN).....................           6,470             150              45             105  ..............           6,320
    HOWARD HANSON DAM, WA...............................          11,250           1,687  ..............             460           1,227           9,563
                                                         -----------------------------------------------------------------------------------------------
      TOTALS, NO. OF PROJECTS 25........................         607,218          50,808          20,500          13,206          17,102         556,410
                                                         ===============================================================================================
MULTIPLE PURPOSE: WILLAMETTE RIVER TEMPERATURE CONTROL,                                                                                                 
 OR.....................................................          46,000           4,433           2,413             520           1,500          41,567
                                                         -----------------------------------------------------------------------------------------------
      TOTALS, NO. OF PROJECTS 1.........................          46,000           4,433           2,413             520           1,500          41,567
                                                         ===============================================================================================
NAVIGATION:                                                                                                                                             
    SAND POINT HARBOR, AK...............................          13,500             225  ..............              37             188          13,275
    ST PAUL HARBOR, AK..................................          14,851             897             759             138  ..............          13,954
    PORT HUENEME, CA....................................           6,500             500  ..............             250             250           6,000
    PORT OF LONG BEACH (DEEPENING), CA..................          16,420             910             750             160  ..............          15,510
    HILLSBORO INLET, FL.................................           1,577             600             245             230             125             977
    JACKSONVILLE HARBOR, FL.............................         112,500             900  ..............             100             800         111,600
    PONCE DE LEON INLET, FL.............................           6,250             563  ..............             175             388           5,687
    ST LUCIE INLET, FL..................................           1,100           1,100             598             280             222  ..............
    BRUNSWICK HARBOR, GA................................          26,650           1,600  ..............           1,100             500          25,050
    LOWER SAVANNAH RIVER, GA AND SC.....................           2,580             600             506              94  ..............           1,980
    KENTUCKY LOCK, KY...................................         197,500          10,881           9,131           1,750  ..............         186,619
    PORT FOURCHON, LA...................................           2,500             373             244             129  ..............           2,127
    BALTIMORE HARBOR ANCHORAGES AND CHANNELS, MD AND VA.          24,000             675             150             338             187          23,325
    CAPE FEAR--NORTHEAST (CAPE FEAR) RIVER, NC..........         154,124           1,330           1,000             330  ..............         152,794
    CHARLESTON HARBOR, SC (DEEPENING AND WIDENING)......          95,174             425             225             200  ..............          94,749
    GIWW--ARANSAS NATIONAL WILDLIFE REFUGE, TX..........          19,510           1,830           1,506             324  ..............          17,680
    CROWN BAY CHANNEL, VI...............................           3,710             700              89             270             341           3,010
    LONDON LOCKS AND DAM, WV............................          17,000           2,295             207             672           1,416          14,705
    MARMET LOCKS AND DAM, WV............................         230,000          10,680           9,850             830  ..............         219,320
                                                         -----------------------------------------------------------------------------------------------
      TOTALS, NO. OF PROJECTS 19........................         945,446          37,084          25,260           7,407           4,417         908,362
                                                         -----------------------------------------------------------------------------------------------
      GRAND TOTALS......................................       1,627,664          93,975          48,173          21,673          24,129       1,533,689
--------------------------------------------------------------------------------------------------------------------------------------------------------


                            PRECONSTRUCTION ENGINEERING AND DESIGN IN FISCAL YEAR 1998 BUDGET (AUTH PROJECTS)--CONTINUING PED                           
                                                                [In thousands of dollars]                                                               
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                Balance to complete     
                          Name                            Total estimate   Federal cost    Allocation to    Fiscal year  -------------------------------
                                                           Federal cost       of PED           date         1998 budget     Programmed     Unprogrammed 
--------------------------------------------------------------------------------------------------------------------------------------------------------
BEACH EROSION: NASSAU COUNTY, FL........................          13,000           1,757           1,434             140             183          11,243
                                                         ===============================================================================================
      TOTALS, NO. OF PROJECTS 1.........................          13,000           1,757           1,434             140             183          11,243
                                                         ===============================================================================================
FLOOD CONTROL:                                                                                                                                          
    MCKINNEY BAYOU, AR AND TX...........................           2,250             450              57             200             193           1,800
    NAPA RIVER, CA......................................          70,800          15,000          12,980           1,600             420          55,800
    PAJARO RIVER AT WATSONVILLE, CA.....................           6,800           2,270           1,770             500  ..............           4,530
    NUTWOOD DRAINAGE AND LEVEE DISTRICT, IL.............           7,662             885             175             395             315           6,777
    WOOD RIVER D&LD, MADISON COUNTY, IL.................           2,069             225  ..............             112             113           1,844
    COMITE RIVER, LA....................................          70,577           6,400           6,135             265  ..............          64,177
    BRUNSWICK COUNTY BEACHES, NC........................          31,200           5,300           2,640           1,000           1,660          25,900
    RIO GUANAJIBO, PR...................................          21,116           1,875             150             700           1,025          19,241
    BRAYS BAYOU, HOUSTON, TX............................         271,110           5,889           4,059           1,830  ..............         265,221
    CYPRESS CREEK, HOUSTON, TX..........................         125,733           2,900           1,963             937  ..............         122,833
    DALLAS FLOODWAY EXTENSION, TRINITY RIVER, TX........          30,900           6,310           3,347             940           2,023          24,590
    GREENS BAYOU, HOUSTON, TX...........................         162,240           5,700           3,704           1,000             996         156,540
    RAYMONDVILLE DRAIN, TX..............................          75,818           1,650             134             370           1,146          74,168
    SOUTH MAIN CHANNEL, TX..............................         141,465           6,420           4,110           1,000           1,310         135,045
                                                         -----------------------------------------------------------------------------------------------
      TOTALS, NO. OF PROJECTS 14........................       1,019,740          61,274          41,224          10,849           9,201         958,466
NAVIGATION:                                                                                                                                             
    C&D CANAL--BALTIMORE HBR CONN CHANNELS, DE AND MD                                                                                                   
     (DEEPEN-  ING).....................................          69,800           3,225           1,225           1,625             375          66,575
    BIG BEND CHANNEL....................................           4,900             303             223              80  ..............           4,597
    INTRACOASTAL WATERWAY, PALM BEACH COUNTY, FL........           4,027             300             126              90              84           3,727
    KIKIAOLA SMALL BOAT HARBOR, KAUAI, HI...............           6,471           1,169             902             267  ..............           5,302
    ST LOUIS HARBOR, MO AND IL..........................          13,986           3,843           2,041             500           1,302          10,143
    ARTHUR KILL CHANNEL--HOWLAND HOOK MARINE TERMINAL,                                                                                                  
     NY AND NJ..........................................          45,400           3,600           3,222             378  ..............          41,800
    WILMINGTON HARBOR--NORTHEAST CAPE FEAR RIVER, NC....          27,600           2,080           1,980             100  ..............          25,520
    NECHES RIVER AND TRIBUTARIES SALTWATER BARRIER, TX..          17,955           3,100           2,312             400             388          14,855
                                                         -----------------------------------------------------------------------------------------------
      TOTALS, NO. OF PROJECTS 8.........................         190,139          17,620          12,031           3,440           2,149         172,519
                                                         -----------------------------------------------------------------------------------------------
      GRAND TOTALS, NO. OF PROJECTS 23..................       1,222,879          80,651          54,689          14,429          11,533       1,142,228
--------------------------------------------------------------------------------------------------------------------------------------------------------


                               CONSTRUCTION NEW STARTS IN FISCAL YEAR 1998 BUDGET                               
                                            [In thousands of dollars]                                           
----------------------------------------------------------------------------------------------------------------
                                                                                        Balance to complete     
              Name                Total estimate   Allocation to    Fiscal year  -------------------------------
                                   Federal cost        date         1998 budget     Programmed     Unprogrammed 
----------------------------------------------------------------------------------------------------------------
FLOOD CONTROL:                                                                                                  
    AMERICAN RIVER WATERSHED, CA          47,500           2,756          44,744  ..............  ..............
    EVERGLADES AND SOUTH FLORIDA                                                                                
     ECOSYSTEM RESTORATION, FL..          75,000  ..............          75,000  ..............  ..............
    ANACOSTIA RIVER AND                                                                                         
     TRIBUTARIES, MD AND DC.....          12,000           1,201          10,799  ..............  ..............
    LAS CRUCES, NM..............           6,600             600           6,000  ..............  ..............
                                 -------------------------------------------------------------------------------
      TOTALS, NO. OF PROJECTS 4.         141,100           4,557         136,543  ..............  ..............
NAVIGATION:                                                                                                     
    WILMINGTON HARBOR CHANNEL                                                                                   
     WIDENING, NC...............          18,600           1,088          17,512  ..............  ..............
    HOUSTON--GALVESTON                                                                                          
     NAVIGATION CHANNELS, TX....         316,541          18,800         119,100  ..............         178,641
    AIWW BRIDGE AT GREAT BRIDGE,                                                                                
     VA.........................          23,100           1,961          21,139  ..............  ..............
                                 -------------------------------------------------------------------------------
      TOTALS, NO. OF PROJECTS 3.         358,241          21,849         157,751  ..............         178,641
                                 -------------------------------------------------------------------------------
      GRAND TOTALS, NO. OF                                                                                      
       PROJECTS 7...............         499,341          26,406         294,294  ..............         178,641
----------------------------------------------------------------------------------------------------------------


                               CONTINUING CONSTRUCTION IN FISCAL YEAR 1998 BUDGET                               
                                            [In thousands of dollars]                                           
----------------------------------------------------------------------------------------------------------------
                                                                                        Balance to complete     
              Name                Total estimate   Allocation to    Fiscal year  -------------------------------
                                   Federal cost        date         1998 budget     Programmed      Programmed  
----------------------------------------------------------------------------------------------------------------
BEACH EROSION:                                                                                                  
    DELAWARE COAST PROTECTION,                                                                                  
     DE.........................          13,300           4,694             224           8,382  ..............
    DADE COUNTY, FL.............         163,300          55,847           8,185          99,268  ..............
    DUVAL COUNTY, FL............         111,200          19,986             278          90,936  ..............
    MANATEE COUNTY, FL..........          43,600           5,518             206          37,876  ..............
    MARTIN COUNTY, FL...........          25,600           4,906              99          20,399             196
    PALM BEACH COUNTY, FL                                                                                       
     (REIMBURSEMENT)............          75,900           9,591             202          62,271           3,836
    PINELLAS COUNTY, FL.........         129,000          31,147           4,586          79,119          14,148
    SARASOTA COUNTY, FL.........          55,200          13,213             500          39,582           1,905
    CHICAGO SHORELINE, IL.......         144,000           9,953          10,000         124,047  ..............
    ATLANTIC COAST OF MARYLAND,                                                                                 
     MD.........................         265,000          29,930           1,797         233,273  ..............
    CAPE MAY INLET TO LOWER                                                                                     
     TOWNSHIP, NJ...............          92,700          13,699             280          72,461           6,260
    GREAT EGG HARBOR INLET AND                                                                                  
     PECK BEACH, NJ.............         375,000          29,894           3,076         342,030  ..............
    SANDY HOOK TO BARNEGAT                                                                                      
     INLET, NJ..................       1,115,000          84,304          15,116       1,015,580  ..............
    ATLANTIC COAST OF NYC,                                                                                      
     ROCKAWAY INLET TO NORTON                                                                                   
     POINT, NY..................          81,000          12,500           1,000          49,500          18,000
    EAST ROCKAWAY INLET TO                                                                                      
     ROCKAWAY INLET AND JAMAICA                                                                                 
     BAY, NY....................          62,400          38,465             600          23,335  ..............
    FIRE ISLAND INLET TO JONES                                                                                  
     INLET, NY..................         326,000          30,588             285         295,127  ..............
    FIRE ISLAND INLET TO MONTAUK                                                                                
     POINT, NY..................         526,000          41,678           4,802          79,520         400,000
    CAROLINA BEACH AND VICINITY,                                                                                
     NC.........................         169,780          21,419           2,840         145,521  ..............
    WRIGHTSVILLE BEACH, NC......          25,200           3,529           1,070          20,601  ..............
    PRESQUE ISLE PENINSULA, PA                                                                                  
     (PERMANENT)................          61,730          15,553             500          45,677  ..............
    MYRTLE BEACH, SC............         140,535          19,365          10,000         111,170  ..............
                                 -------------------------------------------------------------------------------
      TOTALS, NO. OF PROJECTS 21       4,001,445         495,779          65,646       2,995,675         444,345
                                 ===============================================================================
ENVIRONMENTAL REST.:                                                                                            
    KISSIMMEE RIVER, FL.........         231,500          31,371           3,000         197,129  ..............
    CHESAPEAKE BAY OYSTER                                                                                       
     RECOVERY, MD...............           2,500             627             542           1,331  ..............
    POPLAR ISLAND, MD...........         320,000          10,784          30,621         278,595  ..............
                                 -------------------------------------------------------------------------------
      TOTALS, NO. OF PROJECTS 3.         554,000          42,782          34,163         477,055  ..............
                                 ===============================================================================
FLOOD CONTROL:                                                                                                  
    CLIFTON, AZ.................          13,800          11,500           2,300  ..............  ..............
    CORTE MADERA CREEK, CA......          43,800          22,527             500          10,042          10,731
    COYOTE AND BERRYESSA CREEKS,                                                                                
     CA.........................          43,900          32,187           1,000             672          10,041
    GUADALUPE RIVER, CA.........          69,200          44,775          19,000           5,425  ..............
    LOS ANGELES COUNTY DRAINAGE                                                                                 
     AREA, CA...................         180,000          29,668          11,700         138,632  ..............
    LOWER SACRAMENTO AREA LEVEE                                                                                 
     RECONSTRUCTION, CA.........           3,560           1,280             300           1,980  ..............
    MARYSVILLE/YUBA CITY LEVEE                                                                                  
     RECONSTRUCTION, CA.........          23,600          10,485           7,300           5,815  ..............
    MERCED COUNTY STREAMS, CA...          91,800          16,490           1,100             900          73,310
    MID-VALLEY AREA LEVEE                                                                                       
     RECONSTRUCTION, CA.........          15,300           4,195           3,100           8,005  ..............
    SACRAMENTO RIVER BANK                                                                                       
     PROTECTION PROJECT, CA.....         179,100          99,593           5,500          23,770          50,237
    SACRAMENTO RIVER, GLENN-                                                                                    
     COLUSA IRRIGATION DISTRICT,                                                                                
     CA.........................          10,650           3,693             600           6,357  ..............
    SAN LORENZO RIVER, CA.......          12,640           1,571           4,200           6,869  ..............
    SAN LUIS REY RIVER, CA......          61,100          55,700           5,400  ..............  ..............
    SANTA ANA RIVER MAINSTEM, CA         778,000         513,462          52,900          66,271         145,367
    SANTA PAULA CREEK, CA.......          20,300          13,680           4,000           2,620  ..............
    UPPER SACRAMENTO AREA LEVEE                                                                                 
     RECONSTRUCTION, CA.........           4,660           1,587             200           2,873  ..............
    WEST SACRAMENTO, CA.........          16,200           4,346           7,500           4,354  ..............
    ALAMOSA, CO.................           6,000           2,702           3,298  ..............  ..............
    CENTRAL AND SOUTHERN                                                                                        
     FLORIDA, FL................       1,431,000         435,207          27,400         136,363         832,030
    FOUR RIVER BASINS, FL.......         180,700          73,819             693             273         105,915
    IAO STREAM FLOOD CONTROL,                                                                                   
     MAUI, HI (DEF CORR)........          13,046             326             275          12,445  ..............
    ALTON TO GALE ORGANIZED                                                                                     
     LEVEE DISTRICT, IL AND MO                                                                                  
     (DEF CORR).................         108,530          96,484         \1\ 575  ..............          11,471
    EAST ST LOUIS, IL...........          28,859          24,336           2,800           1,723  ..............
    LOVES PARK, IL..............          18,800          11,005             500           7,295  ..............
    MCCOOK AND THORNTON                                                                                         
     RESERVOIRS (CUP), IL.......         435,000          22,374         ( \2\ )  ..............         412,626
    REND LAKE, IL (DEF CORR)....           5,940             678           5,262  ..............  ..............
    FORT WAYNE METROPOLITAN                                                                                     
     AREA, IN...................          34,550          16,108           5,300          13,142  ..............
    LITTLE CALUMET RIVER, IN....         114,000          48,012           5,300          60,688  ..............
    MISSOURI RIVER LEVEE SYSTEM,                                                                                
     IA, NE, KS AND MO..........         217,567          95,788           1,000          23,610          97,169
    MUSCATINE ISLAND, IA........           6,610           1,527           2,000           3,083  ..............
    PERRY CREEK, IA.............          41,874          14,283           8,255          19,336  ..............
    ARKANSAS CITY, KS...........          27,230           3,271           2,000          21,959  ..............
    WINFIELD, KS................           8,177           2,443           2,000           3,734  ..............
    METROPOLITAN LOUISVILLE,                                                                                    
     POND CREEK, KY.............          11,571           2,617           1,800           7,154  ..............
    ALOHA--RIGOLETTE, LA........           7,378           4,035           1,510           1,833  ..............
    LAKE PONTCHARTRAIN AND                                                                                      
     VICINITY, LA (HURRICANE                                                                                    
     PROTECTION)................         505,000         348,022           6,448         121,100          29,430
    LAROSE TO GOLDEN MEADOW, LA                                                                                 
     (HURRICANE PROTECTION).....          80,500          69,793             541          10,166  ..............
    NEW ORLEANS TO VENICE, LA                                                                                   
     (HURRICANE PROTECTION).....         168,000         139,612           1,700          26,688  ..............
    SOUTHEAST LOUISIANA, LA.....         280,000          18,560           6,440  ..............         255,000
    WEST BANK--EAST OF HARVEY                                                                                   
     CANAL, LA (HURRICANE                                                                                       
     PROTECTION)................         120,000           3,098           2,385         100,686          13,831
    WESTWEGO TO HARVEY CANAL, LA                                                                                
     (HURRICANE PROTECTION).....          61,900          29,134           4,300          19,436           9,030
    ROUGHANS POINT, REVERE, MA..           7,930           3,950           1,880           2,100  ..............
    TOWN BROOK, QUINCY AND                                                                                      
     BRAINTREE, MA..............          29,100          28,100             700             300  ..............
    MARSHALL, MN................           7,220           1,832             500           4,888  ..............
    BLUE RIVER CHANNEL, KANSAS                                                                                  
     CITY, MO...................         198,000          92,173          17,900          87,927  ..............
    CAPE GIRARDEAU--JACKSON, MO.          33,400          24,908           1,800           4,577           2,115
    MERAMEC RIVER BASIN, VALLEY                                                                                 
     PARK LEVEE, MO.............          17,738           8,905           2,347           6,486  ..............
    ST GENEVIEVE, MO............          35,387           8,569           4,145          18,908           3,765
    MISSOURI NATIONAL                                                                                           
     RECREATIONAL RIVER, NE AND                                                                                 
     SD.........................          21,000           2,089             150          18,761  ..............
    WOOD RIVER, GRAND ISLAND, NE           6,036           1,850             500           3,686  ..............
    TROPICANA AND FLAMINGO                                                                                      
     WASHES, NV.................         176,200          29,028          20,000         127,172  ..............
    MOLLY ANN'S BROOK AT                                                                                        
     HALEDON, PROSPECT PARK AND                                                                                 
     PATERSON, NJ...............          20,700          10,334           7,090           3,276  ..............
    PASSAIC RIVER PRESERVATION                                                                                  
     OF NATURAL STORAGE AREAS,                                                                                  
     NJ.........................          14,800             500           3,500          10,800  ..............
    RAMAPO RIVER AT OAKLAND, NJ.          10,600           2,226             277           8,097  ..............
    ABIQUIU DAM EMERGENCY GATES,                                                                                
     NM.........................           7,200           1,616           1,400           4,184  ..............
    ACEQUIAS IRRIGATION SYSTEM,                                                                                 
     NM.........................          64,500          11,386             600          52,514  ..............
    ALAMOGORDO, NM..............          34,800           3,720             400          30,680  ..............
    MIDDLE RIO GRANDE FLOOD                                                                                     
     PROTECTION, BERNALILLO TO                                                                                  
     BELEN, NM..................          46,800           8,675             560          37,565  ..............
    RIO GRANDE FLOODWAY, SAN                                                                                    
     ACACIA TO BOSQUE DEL                                                                                       
     APACHE, NM.................          59,500           3,720             280          55,500  ..............
    SHEYENNE RIVER, ND..........          33,580          22,632             500          10,448  ..............
    HOLES CREEK, WEST                                                                                           
     CARROLLTON, OH.............           3,414           1,524           1,890  ..............  ..............
    METROPOLITAN REGION OF                                                                                      
     CINCINNATI, DUCK CREEK, OH.          13,138           1,588           2,120           9,430  ..............
    MILL CREEK, OH..............         163,000          97,431           2,518           1,532          61,519
    WEST COLUMBUS, OH...........          82,758          35,000          15,181          32,577  ..............
    FRY CREEKS, BIXBY, OK.......           9,260           5,332           3,928  ..............  ..............
    MINGO CREEK, TULSA, OK......          74,800          62,394           7,000           5,406  ..............
    ELK CREEK LAKE, OR..........         174,000         109,025           3,900           1,300          59,775
    LACKAWANNA RIVER, OLYPHANT,                                                                                 
     PA.........................           9,800           2,639             400           6,761  ..............
    LACKAWANNA RIVER, SCRANTON,                                                                                 
     PA.........................          14,800           2,764             425          11,611  ..............
    SAW MILL RUN, PITTSBURGH, PA          10,575           2,534             500           7,541  ..............
    WYOMING VALLEY, PA (LEVEE                                                                                   
     RAISING)...................         108,000          28,745          13,000          66,255  ..............
    PORTUGUES AND BUCANA RIVERS,                                                                                
     PR.........................         418,825         359,772          12,712          46,020             321
    RIO DE LA PLATA, PR.........          63,318           4,586             510          58,222  ..............
    RIO PUERTO NUEVO, PR........         322,100          25,199          11,868         285,033  ..............
    CLEAR CREEK, TX.............          70,024          19,478             750          49,796  ..............
    EL PASO, TX.................         114,500          96,351           5,290          12,859  ..............
    MCGRATH CREEK, WICHITA                                                                                      
     FALLS, TX..................           9,516           6,225           3,291  ..............  ..............
    SAN ANTONIO CHANNEL                                                                                         
     IMPROVEMENT, TX............         147,800         147,410             390  ..............  ..............
    SIMS BAYOU, HOUSTON, TX.....         209,480          49,409           9,590         150,481  ..............
    UPPER JORDAN RIVER, UT......           9,400           2,076             700           6,624  ..............
    ROANOKE RIVER UPPER BASIN,                                                                                  
     HEADWATERS AREA, VA........          23,400           5,130           4,400          13,870  ..............
    LEVISA AND TUG FORKS AND                                                                                    
     UPPER CUMBERLAND RIVER, WV,                                                                                
     VA AND KY..................       1,597,597         607,164           7,927          65,895         916,611
    PORTAGE, WI.................           7,260           3,102           1,500           2,658  ..............
                                 -------------------------------------------------------------------------------
      TOTALS, NO. OF PROJECTS 83       9,961,098       4,271,064         392,701       2,197,039       3,100,294
                                 ===============================================================================
MULTIPLE PURPOSE:                                                                                               
    RICHARD B RUSSELL DAM AND                                                                                   
     LAKE, GA AND SC............         596,150         590,195           4,000           1,955  ..............
    BARKLEY DAM AND LAKE                                                                                        
     BARKLEY, KY AND TN.........         157,299         147,466           3,500           6,333  ..............
    COLUMBIA RIVER TREATY                                                                                       
     FISHING ACCESS SITES, OR                                                                                   
     AND WA.....................          75,000          13,011           8,400          53,589  ..............
    COLUMBIA RIVER FISH                                                                                         
     MITIGATION, WA, OR AND ID..       1,376,217         380,014         127,000         869,203  ..............
    LOWER SNAKE RIVER FISH AND                                                                                  
     WILDLIFE COMPENSATION, WA,                                                                                 
     OR AND ID..................         232,000         224,217           4,000           3,783  ..............
                                 -------------------------------------------------------------------------------
      TOTALS, NO. OF PROJECTS 5.       2,436,666       1,354,903         146,900         934,863  ..............
                                 ===============================================================================
NAVIGATION:                                                                                                     
    BLACK WARRIOR AND TOMBIGBEE                                                                                 
     RIVERS, VICINITY OF                                                                                        
     JACKSON, AL................          16,331           1,703             500          14,128  ..............
    TENNESSEE--TOMBIGBEE                                                                                        
     WATERWAY WILDLIFE                                                                                          
     MITIGATION, AL AND MS......          91,200          87,760           3,440  ..............  ..............
    KAKE HARBOR, AK.............          10,116           2,528           3,600           3,988  ..............
    MCCLELLAN--KERR ARKANSAS                                                                                    
     RIVER NAVIGATION SYSTEM, AR                                                                                
     AND OK.....................         632,500         601,803           2,000          28,697  ..............
    MONTGOMERY POINT LOCK AND                                                                                   
     DAM, AR....................         242,000          25,238          10,000         206,762  ..............
    HUMBOLDT HARBOR AND BAY, CA.          12,300           3,035           6,000           3,265  ..............
    LOS ANGELES HARBOR, CA......         121,700          13,903          16,100          91,697  ..............
    OAKLAND HARBOR, CA..........          62,500          53,565           8,935  ..............  ..............
    RICHMOND HARBOR, CA.........          25,700          13,042           8,620           4,038  ..............
    CANAVERAL HARBOR, FL........         123,760          31,114           2,500          90,146  ..............
    MANATEE HARBOR, FL..........          19,985           6,098           1,872           4,803           7,212
    MIAMI HARBOR CHANNEL, FL....          51,066          18,071           2,889          30,106  ..............
    MAALAEA HARBOR, MAUI, HI....           9,117           2,129             691           6,297  ..............
    MELVIN PRICE LOCK AND DAM,                                                                                  
     IL AND MO..................         741,332         723,363           1,900          16,069  ..............
    OLMSTED LOCKS AND DAM, IL                                                                                   
     AND KY.....................       1,020,000         243,620          98,440         677,940  ..............
    UPPER MISS RVR SYSTEM ENV                                                                                   
     MGMT PROGRAM, IL, IA, MO,                                                                                  
     MN AND WI..................         241,399         144,124          14,000          59,163          24,112
    MISSOURI RIVER FISH AND                                                                                     
     WILDLIFE MITIGATION, IA,                                                                                   
     NE, KS AND MO..............          81,400          32,026           3,895          45,479  ..............
    MCALPINE LOCKS AND DAMS, KY                                                                                 
     AND IN.....................         268,000          13,768           1,720         252,512  ..............
    MISSISSIPPI RIVER--GULF                                                                                     
     OUTLET, LA.................         610,000         104,930           2,018           7,936         495,116
    MISSISSIPPI RIVER SHIP                                                                                      
     CHANNEL, GULF TO BATON                                                                                     
     ROUGE, LA..................         164,000          21,665           1,793          10,245         130,297
    RED RIVER WATERWAY,                                                                                         
     MISSISSIPPI RIVER TO                                                                                       
     SHREVEPORT, LA.............       1,888,342       1,671,783           9,990         146,791          59,778
    BOSTON HARBOR, MA...........          19,350           2,563           3,920          12,867  ..............
    MISS RIVER BTWN THE OHIO AND                                                                                
     MO RIVERS (REG WORKS). MO                                                                                  
     AND IL.....................         278,000         183,901           3,446          90,653  ..............
    KILL VAN KULL AND NEWARK BAY                                                                                
     CHANNEL, NY AND NJ.........         324,000         197,606             429  ..............         125,965
    AIWW--REPLACEMENT OF FEDERAL                                                                                
     HIGHWAY BRIDGES, NC........          75,972          54,756           7,000          14,216  ..............
    GRAYS LANDING LOCK AND DAM,                                                                                 
     MONONGAHELA RIVER, PA......         181,000         173,894             250           3,500           3,356
    LOCKS AND DAMS 2, 3 AND 4,                                                                                  
     MONONGAHELA RIVER, PA......         695,000          42,426           2,700         649,874  ..............
    SAN JUAN HARBOR, PR.........          34,400           4,092           2,400          27,908  ..............
    COOPER RIVER, CHARLESTON                                                                                    
     HARBOR, SC.................         206,673         203,935       \1\ 2,738  ..............  ..............
    CHANNEL TO VICTORIA, TX.....          22,293          11,006           7,300           3,590             397
    FREEPORT HARBOR, TX.........          63,557          56,429           4,900  ..............           2,228
    GIWW--SARGENT BEACH, TX.....          58,770          51,848             940  ..............           5,982
    NORFOLK HARBOR AND CHANNELS                                                                                 
     (DEEPENING), VA............         137,400          19,368           1,098           6,772         110,162
    ROBERT C BYRD LOCKS AND DAM,                                                                                
     WV AND OH..................         373,000         340,212           5,356          27,432  ..............
    WINFIELD LOCKS AND DAM, WV..         221,600         201,566           8,500          11,534  ..............
                                 -------------------------------------------------------------------------------
      TOTALS, NO. OF PROJECTS 35       9,123,763       5,358,870         251,880       2,548,408         964,605
                                 -------------------------------------------------------------------------------
      GRAND TOTALS, NO. OF                                                                                      
       PROJECTS 147.............      26,076,972      11,523,398         891,290       9,153,040       4,509,244
----------------------------------------------------------------------------------------------------------------
\1\ New start.                                                                                                  
\2\ Work to be accomplished with unobligated carryover.                                                         


              MISSISSIPPI RIVER AND TRIBUTARIES CONTINUING CONSTRUCTION IN FISCAL YEAR 1998 BUDGET              
                                            [In thousands of dollars]                                           
----------------------------------------------------------------------------------------------------------------
                                                                                        Balance to complete     
              Name                Total estimate   Allocation to    Fiscal year  -------------------------------
                                   Federal cost        date         1998 budget     Programmed     Unprogrammed 
----------------------------------------------------------------------------------------------------------------
FLOOD CONTROL:                                                                                                  
    CHANNEL IMPROVEMENT, AR, IL,                                                                                
     KY, LA, MS, MO AND TN......       3,620,000       2,449,373          44,490       1,126,137  ..............
    EIGHT MILE CREEK, AR........           8,500           2,324             812           5,364  ..............
    HELENA AND VICINITY, AR.....           7,700           2,167             700           4,833  ..............
    MISSISSIPPI RIVER LEVEES,                                                                                   
     AR, IL, KY, LA, MS, MO AND                                                                                 
     TN.........................       1,457,000         800,931          24,238         631,831  ..............
    ST FRANCIS BASIN, AR AND MO.         381,000         352,884           5,000          23,116  ..............
    WHITEMAN'S CREEK, AR........           3,300           1,587           1,105             608  ..............
    ATCHAFALAYA BASIN, FLOODWAY                                                                                 
     SYSTEM, LA.................         185,000          53,187           3,300          77,871          50,642
    ATCHAFALAYA BASIN, LA.......       1,750,000         801,131          19,100         929,769  ..............
    MISSISSIPPI AND LOUISIANA                                                                                   
     ESTUARINE AREAS, LA AND MS.          63,300           7,863             300          55,137  ..............
    MISSISSIPPI DELTA REGION, LA          97,300          52,367          11,500          19,591          13,842
    TENSAS BASIN, RED RIVER                                                                                     
     BACKWATER, LA..............         170,969          97,992           7,006          65,971  ..............
    VAZOO BASIN, BACKWATER LESS                                                                                 
     ROCKY BAYOU, MS............         228,482          59,101              20         169,361  ..............
    YAZOO BASIN, BIG SUNFLOWER                                                                                  
     RIVER, MS..................         102,684          83,893           3,862          14,929  ..............
    YAZOO BASIN, DEMONSTRATION                                                                                  
     EROSION CONTROL, MS........         221,424         211,424          10,000  ..............  ..............
    YAZOO BASIN, F&WL MITIGATION                                                                                
     LANDS, MS..................           7,410           6,182             363             865  ..............
    YAZOO BASIN, MAIN STEM, MS..         212,800          34,518              25         178,257  ..............
    YAZOO BASIN, REFORMULATION                                                                                  
     UNIT, MS...................          32,408          23,740           2,000           6,339             329
    YAZOO BASIN, TRIBUTARIES, MS         247,366         107,245             200         139,921  ..............
    YAZOO BASIN, UPPER YAZOO                                                                                    
     PROJECTS, MS...............         339,000         123,054           9,000         206,946  ..............
    ST. JOHNS BAYOU--NEW MADRID                                                                                 
     FLOODWAY, MO...............          54,700           4,150           3,000          24,180          23,370
    NONCONNAH CREEK, FLOOD                                                                                      
     CONTROL FEATURE, TN AND MS.          17,930          10,948           2,000           4,982  ..............
    WEST TENNESSEE TRIBUTARIES,                                                                                 
     TN.........................         140,000          50,447           2,200          22,184          65,169
                                 -------------------------------------------------------------------------------
      TOTALS, NO. OF PROJECTS 22       9,348,273       5,336,508         150,221       3,708,192         153,352
                                 -------------------------------------------------------------------------------
      GRAND TOTALS, NO. OF                                                                                      
       PROJECTS 22..............       9,348,273       5,336,508         150,221       3,708,192         153,352
----------------------------------------------------------------------------------------------------------------


                           MAJOR REHABILITATION IN FISCAL YEAR 1998 BUDGET (CG FUNDED)                          
                                            [In thousands of dollars]                                           
----------------------------------------------------------------------------------------------------------------
                                                                                        Balance to complete     
              Name                Total estimate   Allocation to    Fiscal year  -------------------------------
                                   Federal cost        date         1998 budget     Programmed     Unprogrammed 
----------------------------------------------------------------------------------------------------------------
FLOOD CONTROL:                                                                                                  
    HODGES VILLAGE DAM, MA                                                                                      
     (MAJOR REHAB)..............          17,400           2,000           7,900           7,500  ..............
    LAKE ASHTABULA AND BALDHILL                                                                                 
     DAM, ND (MAJOR REHAB)......           7,150           4,797           1,200           1,153  ..............
    JOHNSTOWN, PA (MAJOR REHAB).          32,500           2,950           6,205          23,345  ..............
                                 -------------------------------------------------------------------------------
      TOTALS, NO. OF PROJECTS 3.          57,050           9,747          15,305          31,998  ..............
                                 ===============================================================================
MULTIPLE PURPOSE:                                                                                               
    WALTER F GEORGE LOCK AND                                                                                    
     DAM, AL AND GA (MAJOR                                                                                      
     REHAB).....................          27,400             473           2,800          24,127  ..............
    DARDANELLE LOCK AND DAM                                                                                     
     POWERHOUSE, AR (MAJOR                                                                                      
     REHAB).....................          29,700          10,579           3,000          16,121  ..............
    JIM WOODRUFF LOCK AND DAM                                                                                   
     POWERHOUSE, FL AND GA                                                                                      
     (MAJOR REHAB)..............          30,600           2,225           6,000          22,375  ..............
    BUFORD POWERHOUSE, GA (MAJOR                                                                                
     REHAB).....................          27,200  ..............      \1\ 27,200  ..............  ..............
    HARTWELL LAKE POWERHOUSE, GA                                                                                
     AND SC (MAJOR REHAB).......          17,700           8,748           7,000           1,952  ..............
    THURMOND LAKE POWERHOUSE, GA                                                                                
     AND SC (MAJOR REHAB).......          69,700           5,145          11,000          53,555  ..............
    GARRISON DAM AND POWER                                                                                      
     PLANT, ND (MAJOR REHAB)....          40,840             319             300          40,221  ..............
    BONNEVILLE POWERHOUSE PHASE                                                                                 
     II, OR AND WA (MAJOR REHAB)          89,100          10,990          13,000          65,110  ..............
    THE DALLES POWERHOUSE (UNITS                                                                                
     1-14, WA AND OR (MAJOR                                                                                     
     REHAB).....................          87,700           1,893           4,000          81,807  ..............
                                 -------------------------------------------------------------------------------
      TOTALS, NO. OF PROJECTS 9.         419,940          40,372          74,300         305,268  ..............
                                 ===============================================================================
NAVIGATION:                                                                                                     
    LOCK AND DAM 24, MISSISSIPPI                                                                                
     RIVER, IL AND MO (MAJOR                                                                                    
     REHAB).....................          25,736           3,608           4,370          17,758  ..............
    LOCK AND DAM 25, MISSISSIPPI                                                                                
     RIVER, IL AND MO (MAJOR                                                                                    
     REHAB).....................          22,926           8,770           4,230           9,926  ..............
    BURNS WATERWAY HARBOR, IN                                                                                   
     (MAJOR REHAB)..............          14,600          10,050           3,000           1,550  ..............
    LOCK AND DAM 14, MISSISSIPPI                                                                                
     RIVER, IA (MAJOR REHAB)....          20,900           3,050           6,600          11,250  ..............
    LOCK AND DAM 3, MISSISSIPPI                                                                                 
     RIVER, MN (MAJOR REHAB)....          12,400  ..............      \1\ 12,400  ..............  ..............
                                 -------------------------------------------------------------------------------
      TOTALS, NO. OF PROJECTS 5.          96,562          25,478          30,600          40,484  ..............
                                 -------------------------------------------------------------------------------
      GRAND TOTALS, NO. OF                                                                                      
       PROJECTS 17..............         573,552          75,597         120,205         377,750  ..............
----------------------------------------------------------------------------------------------------------------
\1\ New start.                                                                                                  


                                 DAM SAFETY ASSURANCE IN FISCAL YEAR 1998 BUDGET                                
                                            [In thousands of dollars]                                           
----------------------------------------------------------------------------------------------------------------
                                                                                        Balance to complete     
              Name                Total estimate   Allocation to    Fiscal year  -------------------------------
                                   Federal cost        date         1998 budget     Programmed     Unprogrammed 
----------------------------------------------------------------------------------------------------------------
FLOOD CONTROL:                                                                                                  
    DEWEY LAKE, KY (DAM SAFETY).          18,500           2,052             250          16,198  ..............
    GALISTEO DAM, NM (DAM                                                                                       
     SAFETY)....................           8,300             407           2,720           5,173  ..............
    TWO RIVERS DAM, NM (DAM                                                                                     
     SAFETY)....................           3,020             457           2,563  ..............  ..............
    HOMME LAKE, ND (DAM SAFETY).          14,700           1,226             200          13,274  ..............
    LAKE ASHTABULA AND BALDHILL                                                                                 
     DAM, ND (DAM SAFETY).......          15,800          13,365             500           1,935  ..............
    BEACH CITY LAKE, MUSKINGUM                                                                                  
     RIVER LAKES, OH (DAM                                                                                       
     SAFETY)....................           3,300             552             105           2,643  ..............
    WACO LAKE, TX (DAM SAFETY)..           9,800             729           1,700           7,371  ..............
    TYGART LAKE, WV (DAM SAFETY)          29,500           1,457      \1\ 28,043  ..............  ..............
                                 -------------------------------------------------------------------------------
      TOTALS, NO. OF PROJECTS 8.         102,920          20,245          36,081          46,594  ..............
                                 ===============================================================================
MULTIPLE PURPOSE:                                                                                               
    TABLE ROCK LAKE, MO AND AR                                                                                  
     (DAM SAFETY)...............          60,200           1,100             800          58,300  ..............
    TENKILLER FERRY LAKE, OK                                                                                    
     (DAM SAFETY)...............          36,000           2,009              95          33,896  ..............
                                 -------------------------------------------------------------------------------
      TOTALS, NO. OF PROJECTS 2.          96,200           3,109             895          92,196  ..............
                                 ===============================================================================
NAVIGATION: PINE RIVER DAM,                                                                                     
 CROSS LAKE, MN (DAM SAFETY)....          14,900           1,283             300          13,317  ..............
                                 -------------------------------------------------------------------------------
      TOTALS, NO. OF PROJECTS 1.          14,900           1,283             300          13,317  ..............
                                 -------------------------------------------------------------------------------
      GRAND TOTALS, NO. OF                                                                                      
       PROJECTS 11..............         214,020          24,637          37,276         152,107  ..............
----------------------------------------------------------------------------------------------------------------
\1\ New start.                                                                                                  

                                 ______
                                 
                 Questions Submitted by Senator Gorton
               tri-cities rivershore enhancement project
    Question. As you may know, legislation turning over a number of 
recreational areas along the Columbia River to local governments in the 
Tri-Cities area of my state was included in last year's Water Resources 
Development Act (WRDA) signed into law by President Clinton. The 
legislation required local units of government to pay reasonable 
administrative costs for these lands. I have been told that earlier 
this year, the Corps was considering charging affected cities and 
counties $4 million in administrative costs. This charge does not seem 
reasonable to me as it would bankrupt these communities of modest size. 
I have heard that progress has been made between the Corps and local 
governmental officials on a mutually acceptable figure. Could you tell 
me what the Corps now expects to charge these local units of 
government?
    Answer. The current estimate for each of the six local entities 
will be a maximum of $20,000 for Corps of Engineers' administrative 
costs, provided the local governments provide/accomplish the 
Comprehensive Environmental Response, Liability, and Compensation Act 
(CERCLA), the National Environmental Policy Act (NEPA), and other 
environmental requirements for the project. In addition, for the 
properties to be conveyed, the local governments will need to provide 
legal descriptions prepared by a licensed surveyor using Corps segment 
maps. The Corps will provide the following support to facilitate the 
land disposal in accordance with WRDA 96:
    (1) Provide segment maps that describe the areas to be conveyed to 
each of the six local entities.
    (2) Provide a listing of improvements/structures to be conveyed 
with the land parcels.
    (3) Make our agency files available to the local entities or their 
contractors, so that they may complete CERCLA compliance.
    (4) Review and approve the Environmental Assessment (EA).
    (5) Incorporate NEPA and CERCLA data into the deeds, as necessary.
    Question. I also understand with regard to the Tri-Cities 
Rivershore Enhancement Project that local governments are expected to 
foot the bill for NEPA compliance and levee study costs. Could you tell 
us how much the Counties are expected to pay for these services?
    Answer. We estimate the cost for one EA that results in a Finding 
of No Significant Impact (FONSI), covering the disposal of all land to 
the six local entities, to be approximately $50,000. This estimate 
assumes no issues or impacts are identified which would warrant the 
preparation of an Environmental Impact Statement (EIS) and that all six 
local entities cooperate to conduct a single EA. The Corps has offered 
to do this work for the local entities for this amount. The levee study 
referred to in WRDA 96, to determine the minimum safe height of the 
levees, is estimated to cost about $500,000, which would be shared by 
the Corps and non-Federal interests. To date, however, no funds have 
been provided for the Corps to do the study.
    Question. I understand that about five years ago, a study was 
conducted and levees in Franklin County were ultimately lowered. How 
much did this study cost?
    Answer. This Reconnaissance Study was completed in August 1991 for 
$300,000.
    Question. The levees that are mentioned in the legislation are 
extremely high, steep, and make access to the river virtually 
impossible. They are certainly not conducive to rivershore 
beautification which is one of the primary goals of this bill. In 
addition, the levees are no longer necessary for flood control 
purposes. They were designed to pass the 1894 natural flood before the 
Corps began managing flows of the Columbia River through several dams 
built after the Corps acquired the Tri-Cities property. Yet as I 
understand the current situation the Corps is virtually unwilling to 
consider reducing the height more than six feet. Could you explain the 
Corps' current policies on levee lowering and why the levees in the 
Tri-Cities cannot be lowered any further?
    Answer. Limiting the amount of levee height reduction is not as 
much a matter of Corps policy as it is a matter of public safety. The 
upstream storage reservoirs have the capability to reduce flood flows 
in the Columbia River but not eliminate them. The August 1991 
Reconnaissance Study showed that the levees are essential for continued 
protection of lives and property from flooding. It also showed that 
reducing levee heights by approximately six feet provides the urban 
community with protection against river levels that would result from 
standard project flood flows and waves with provision for loss of 
channel capacity due to siltation over time. This level of protection 
is consistent with other Corps projects in urban areas. Any further 
lowering of the levees below that level increases the flood risk to the 
communities. It also would be an action inconsistent with Federal 
policy on floodplain management stipulated in Executive Order 11988, 
which guides all Federal agencies.
    Question. The bill also directed the Corps within 30 days of 
enactment to contract with a private entity to determine within six 
months the minimum safe height of the levees. Six months have now come 
and gone since the bill became law and the Corps has not even found a 
private party to conduct this study let alone determine the safe height 
of the levees. Could you tell me why the Corps has failed to follow the 
directives Congress has spelled out for it in this law?
    Answer. WRDA 96 authorized the levee height study. No funds were 
provided for the Corps to do the study. We are currently in the process 
of preparing our fiscal year 1999 budget request, the first opportunity 
since WRDA 96. We will consider this activity along with other 
priorities at the National level.
                                 ______
                                 
                  Questions Submitted by Senator Burns
                         permitting procedures
    Question. I have a few questions about the process the Corps of 
Engineers goes through in their permitting procedures. This relates to 
specific permitting processes ongoing at this time in Montana. When a 
lead agency, in this case BLM, has compiled a very extensive EIS and 
has issued a Record of Decision (ROD), for the extension permit, does 
everything in the EIS have to be reiterated by the ROD?
    Answer. When the Corps prepares to render a final permit decision, 
we strive to effectively summarize the EIS contents in the ROD, 
especially the information relevant to the decision, and not to 
reiterate everything in the EIS. Regarding lead Federal agency EIS's 
and ROD's, we regard both of these documents as potential information 
sources for our use in rendering final permit decisions. If the Corps 
concludes that certain information in another Federal agency's EIS (or 
ROD) is insufficient to facilitate a decision, we may perform 
additional studies or document the Corps additional evaluation 
referencing the information in the other agency's EIS or ROD. We may 
also condition the permit to address project construction and operation 
impacts that are consequences of our permit decision.
    Question. Can the Corps of Engineers as a cooperating agency accept 
complete documents from the lead agency when making their permitting 
decisions, or must they do their own independent study?
    Answer. The Corps can accept complete environmental impact 
statements (EIS) from lead Federal agencies and use the information as 
a basis for its permit decision, whether the Corps is a cooperating 
agency on the EIS or not. In fact, the Corps believes that this is what 
the National Environmental Policy Act envisions and that it makes for 
more efficient and timely permit decisions. However, if the 
communication or cooperation between the Corps and the lead Federal 
agency is not sufficient to produce all necessary information to 
facilitate a permit decision, the Corps must request that the applicant 
perform additional studies. These additional studies and the Corps 
analysis of those studies would be made part of an environmental 
assessment, or a supplemental EIS.
    Question. Does or does not the Corps have jurisdiction, expertise, 
or authority to determine potential impacts to Native American cultural 
resources and traditional practices when issuing a 404 permit?
    Answer. Under the National Historic Preservation Act the Corps is 
responsible for taking into account the impacts of any permit action on 
cultural resources, including Native American cultural resources, and 
for complying with appropriate regulations. The Corps also has a Trust 
Responsibility to ensure that our decisions do not violate any Native 
American treaty rights when issuing any permit. The Corps has several 
archaeologists on staff in the district offices to address these issues 
and a center of expertise in the St. Louis District to ensure uniform 
application of laws and regulations governing cultural resources.
    Question. In light of the tightening federal budgets and reduced 
federal agency manpower, why is the Corps proposing to further limit 
the use of nationwide permits by reducing the amount of acreage that 
can be permitted under a nationwide permit? Replacement of wetlands is 
still required under a nationwide permit, so what is the advantage of 
going through a lengthy process for an individual permit when a 
nationwide permit will suffice with much less demand on the Corps 
staff?
    Answer. The Corps has determined that nationwide permit (NWP) 26 
should be replaced with activity-based NWP's. This is because of some 
legal vulnerability of NWP 26, based on the language of Section 404(e) 
of the Clean Water Act which requires that NWP's be for categories of 
activities that are similar in nature. We anticipate that the issuance 
of replacement NWP's should keep the number of activities needing 
individual permits approximately the same. While there will be more 
activities above the headwaters and in isolated waters that need 
individual permits, there will be fewer activities below the headwaters 
needing individual permits. This is because the replacement NWP's will 
apply not only above the headwaters and in isolated waters but also to 
waters below the headwaters. Furthermore, since the headwaters and 
isolated waters determinations will no longer be needed, the public and 
the Corps will benefit from the workload and expense of such 
determinations. Finally, the Corps issued two new NWP's and modified 
several NWP's to increase the number of activities that would be 
authorized by NWP.
    Question. The Corps continues to expand its authority under Section 
404 of the Clean Water Act and in some cases is evaluating impact to 
non-wetland waters of the United States, not just wetlands. This goes 
beyond the intent of the Clean Water Act and could be construed as the 
Corps attempting to expand its authority and influence. What rationale 
do you have to further expand its interpretation of the Clean Water Act 
and have you evaluated the environmental benefit versus additional cost 
due to increased regulatory burden on U.S. citizens?
    Answer. The Corps has not expanded the geographic scope of areas 
under Section 404 of the Clean Water Act jurisdiction beyond that as 
promulgated in our 13 November 1986, regulations. The Clean Water Act 
uses the term ``navigable waters'' which is defined in Section 502(7) 
as ``waters of the United States, including territorial seas.'' Thus, 
Section 404 jurisdiction is defined as encompassing navigable waters 
plus their tributaries and adjacent wetlands and isolated waters where 
the use, degradation or destruction of such waters could affect 
interstate or foreign commerce. Activities requiring Section 404 
permits are limited to discharges of dredged or fill material into 
waters of the United States. The Clean Water Act Section 404(b)(1) 
Guidelines promulgated by the Environmental Protection Agency in 
conjunction with the Corps recognize many different special aquatic 
sites under Clean Water Act jurisdiction, including wetlands. In fact, 
you raise an issue that has been of concern to the Corps regarding the 
emphasis or focus some have placed on wetlands, sometimes at the 
expense of other more important aquatic ``non-wetland'' resources that 
are clearly under Clean Water Act jurisdiction. An example would 
include the vegetated shallow water areas within the Chesapeake Bay 
which are vitally important to many aquatic organisms that are 
commercially harvested for sport and human consumption.
    With regard to the analysis of environmental benefit versus 
additional cost to U.S. citizens, the Corps has not prepared a 
comprehensive study or analysis of mitigation or other environmental 
impacts that are required as part of a final permit decision. The Corps 
determines the practicability of the alternatives, including 
mitigation, prior to reaching a final individual permit decision on a 
case-by-case basis. This determination must be based on the 
availability and capability of being done by the applicant after taking 
into account cost considerations, existing technology, and logistics in 
light of the overall project purpose.
    Question. There is case law that sets the statute of limitations 
for mitigation of past impacts to waters of the United States at 5 
years. The Corps has ignored that case law and attempted to require 
mitigation for longer than 5 years, even though there may not have been 
regulations requiring a 404 permit when the disturbance to waters of 
the U.S. occurred. Since there is a 5 year statute of limitations, 
couldn't the Corps reduce the amount of time and money spent on after 
the fact permitting by using that 5 year guideline? In any event, how 
does the Corps justify ignoring court decisions when developing 
mitigation requirements?
    Answer. The 5 year statute of limitations became a guiding factor 
used in determining the need to take an enforcement action with 
regulatory guidance issued in 1988. After the fact permit cases arise 
from enforcement actions. We are not aware of any Corps enforcement 
cases that have not followed the guidance, or that have ignored court 
decisions. Resource limitations (time and money) and court cases are 
factors considered in establishing enforcement priorities, and were at 
the heart of the guidance concerning the 5 year statue of limitations.
    Question. The Corps, EPA, and other federal agencies seem to have a 
large amount of overlap in regulatory compliance and oversight for 
protection of water resources. What is the Corps doing to reduce the 
overlap and streamline their permitting requirements to reduce the time 
and money Corps staff must spend on redundant requirements that are 
being handled by another agency?
    Answer. The Corps attempts to minimize duplication with not only 
other Federal agencies, but also state and local governments that may 
be authorizing projects in the Nation's waters. We have established 
interagency Memoranda of Agreement under Section 404(q) of the Clean 
Water Act and consider other Federal agencies' comments, but the Corps 
is the decision-maker on Corps permits, including Section 404 permits. 
Regarding state and local governments, we are continuing to advocate 
expanded use of programmatic general permits (PGP). When the Corps 
develops a PGP, an activity can proceed based on the permit of the 
other governmental agency (state or local government), provided certain 
Corps of Engineers conditions are met. The conditions are identified in 
the PGP or added by the Corps as a result of joint review by the local 
or state agency and the Corps.
    Question. Why is mining being singled out for this lengthy process, 
while hundreds of acres have been approved under nationwide permits?
    Answer. We are not singling out mining activities for regulation; 
however, some mining activities have substantial impact to waters of 
the U.S. Many mining activities are authorized by nationwide permits 
(NWP) other than NWP 26. NWP 21 authorizes coal mining which is 
authorized under the Surface Mining Control and Reclamation Act. Many 
other NWP's are used for minor activities associated with mining 
activities, such as NWP 14 for minor road crossings, NWP 3 for 
maintenance of structures, NWP 5 for scientific measurement devises, 
NWP 6 for survey activities, and NWP 33 for temporary construction and 
access. The Corps is also considering a NWP for sand and gravel and 
aggregate mining as a replacement NWP for NWP 26. Furthermore, the 
Corps has issued several regional general permits for mining 
activities. Finally, certain mining activities are exempt from section 
404 regulation under Section 404(f) of the Clean Water Act.
    Question. Why is the Corps giving up their maintenance 
responsibilities, in lieu of projects that may or may not transpire, or 
not have approval or authorization?
    Answer. The Corps is not giving up its maintenance 
responsibilities. Prudent management of the Nation's investment in 
water resources projects is an important part of our program. Nearly 
half of the Army's $3.7 billion Civil Works budget--$1.618 billion--
supports the preservation of the valuable assets that make up the 
existing infrastructure. The budget request will help ensure that the 
Corps of Engineers can continue to deliver justified levels of service 
at least cost to the taxpayer.
    Question. Is it the Corps policy to obligate itself as a co-lead 
agency in an EIS and then not fully fund the positions necessary to 
fulfill its commitment as a co-lead agency?
    Answer. The decision to participate in an EIS or other study such 
as a watershed plan is usually made because of the necessity to ensure 
that Corps requirements are considered in the process. These 
commitments are often made in one fiscal year on the expectation that 
some small funding increases in the next fiscal year will help pay for 
the Corps involvement. Such increases have not been occurring as the 
regulatory program budget has been held at the same level for three 
years. We are doing our best to meet our obligations but the program 
budget is stretched very thin. At this time we are finalizing our 
policy on regulatory EIS's to better define what our level of 
participation should be and to ensure consistent application of that 
EIS policy across the country.
    Question. Is it the Corps policy to extend its jurisdiction beyond 
wetlands issues on projects involving no federal land or federal funds?
    Answer. The Corps will expand its scope of analysis to include the 
evaluation of certain non-aquatic resources to ensure compliance with 
many Federal laws when reviewing activities under Section 404 of the 
Clean Water Act, including, but not limited to, the National 
Environmental Policy Act, the National Historic Preservation Act, the 
Endangered Species Act, and the Wild and Scenic Rivers Act. When these 
laws apply, the Corps may be required to consider and require certain 
mitigative features to address impacts to non-aquatic resources. In 
general, however, the Corps limits its evaluation to direct and 
indirect impacts of activities to waters of the United States.
                             missouri river
    Question. Can you provide the committee with the progress that is 
being made on the stabilizing the Missouri River between Wolf Point, 
Montana and Culbertson, Montana?
    Answer. The Corps completed a Section 33 non-traditional bank 
stabilization project south of Wolf Point, Montana in May 1996. The 
Corps is performing an evaluation report on this project. The report 
will be completed by the end of fiscal year 1997.
    Question. Can you visualize a date when the Missouri River will be 
stabilized down stream from Fort Peck Reservoir?
    Answer. Fort Peck was closed in 1937 and began operations in 1940. 
Since 1940, the downstream effects of Fort Peck dam such as degradation 
and bed armoring have attenuated. Degradation rates are decreasing, and 
the distribution of bed material has stabilized. All the data available 
at this time indicate the reach has nearly adjusted to the current 
discharge-sediment regime and is reaching dynamic equilibrium. However, 
natural alluvial processes such as bank erosion and sandbar movement 
will continue to occur. The Omaha District has completed one erosion 
assessment in this reach of the river, and this assessment indicates 
that long term erosion rates have declined since the closure of Fort 
Peck Dam. We do not have enough data to estimate future erosion rates 
at this time. However, we can state, for this reach of the river, 
erosion will continue at a reduced rate depending on hydrologic cycles 
and geologic conditions, and the location of eroding banks will change 
over time, possibly up to fifty years.
                                 ______
                                 
                  Questions Submitted by Senator Reid
                   tropicana-flamingo washes funding
    Question. The Project Cooperation Agreement for the Tropicana-
Flamingo Washes Project contemplated construction of the Project by 
2001. However, the Corps has moved completion of the Project to 2006 in 
a letter to the Flood Control District in 1996. The financial plan in 
the PCA (executed in February 1995) is already $28 million behind 
schedule if we approve your $20 million funding request for fiscal year 
1998. In this fastest growing major city in the United States, is there 
some way to accelerate these funding levels so we can keep ahead of 
need and growth?
    Mr. Lancaster. We have requested $20 million for fiscal year 1998 
which is about $3 million more than what was indicated in the 1996 
letter that you referenced. This amount will allow the Corps to proceed 
on an optimum schedule in fiscal year 1998. Optimum schedule funding 
thereafter will be dependent upon whatever amount of funds are made 
available through the appropriations process for future fiscal years. 
We are also pursuing the completion of plans and specifications for all 
flood control elements of the project. This will put us in the position 
of being able to utilize, on short notice, any excess funds that may 
become available in future years.
               section 211 (1996 wrda) funding proposals
    Question. The Clark County Regional Flood Control District has met 
with officials of the Assistant Secretary's and Chief's offices to work 
out a program under the 1996 WRDA's Section 211. These meetings have 
been productive but we question a policy proposal discussed which would 
consider reimbursement under Section 211 a ``new start'' where the 
project construction is ongoing by the Corps and the local sponsor 
wishes to undertake a portion of the construction to get the project 
finished on time. Your explanation of this proposed policy will be 
helpful.
    Mr. Lancaster. Section 211 authorizes non-Federal interests to 
undertake flood control projects and receive reimbursement of the 
estimated Federal share. We are currently developing the policy and 
guidance for implementing this section of WRDA 1996. In the case of the 
Flamingo and Tropicana Washes project, where a PCA has been signed and 
construction is underway and where there are no identifiable separable 
elements, we are considering several alternatives to the ``new start'' 
approach. At this point I can say that treating the sponsor's 
reimbursement without requiring a ``new start'' decision or providing 
for reimbursement at the end of the project without the need for a 
``new start'' decision are some options under consideration. However, 
in general, projects proceeding under Section 211 would need to be 
prioritized by the Administration and the Congress along with all other 
projects awaiting funding.
                                 ______
                                 
                  Questions Submitted by Senator Byrd
                           ritchie county dam
    Question. One project I have supported strongly is the construction 
of a multi-purpose dam on the North Fork of the Hughes River in Ritchie 
County. While the primary purpose of this project would be to address 
water supply and quality concerns, it would also have benefits 
associated with flood control and recreation. The opponents to this 
project have initiated litigation challenging several issues associated 
with the actions of the involved agencies. The two issues which the 
Court directed be addressed are zebra mussels and the recreation 
benefits associated with the project. What is the Corps' role in 
responding to the issues that the court identified as requiring further 
analysis?
    Mr. Lancaster. The Corps will be acting in a coordinating or 
cooperating capacity while the Natural Resources Conservation Service 
addresses the recreation and zebra mussel issues through their 
supplemental National Environmental Policy Act review process.
    Question. What is the current time frame for responding to the 
court? Is the Corps' ability to fulfill its responsibilities dependent 
on receiving updated information from the Natural Resources 
Conservation Service?
    Mr. Lancaster. There is no time frame set by the court. The Corps 
must receive Natural Resources Conservation Service (NRCS) updated 
information in order to complete its responsibilities in this action. 
NRCS information is expected by September 1997. Once received, a 
determination will be made, by the Corps and NRCS, concerning any 
requirement for additional National Environmental Policy Act (NEPA) 
actions and a schedule would be developed at that time. After all NEPA 
obligations have been met, the permit decision will be reviewed.
    Question. Can you provide any indication as to whether you believe 
the Court's requirements can be met adequately through further 
analysis?
    Mr. Lancaster. Yes, we believe the new information obtained will 
adequately meet the court's requirements on these issues.
    Question. Mr. Secretary, I wish to reiterate my strong support for 
this project. While the Corps is not the primary agency responsible for 
this effort, it will play a key role in reviewing the materials 
prepared by others. I hope you make sure the Corps conducts its 
responsibilities in a timely manner so that this project is not unduly 
delayed further.
                    emergency funding/contingencies
    Question. Mr. Secretary, the Senate will soon take up the proposed 
supplemental appropriations bill to address emergency requirements 
which have developed as a result of the seemingly endless string of 
storms and other disasters which have confronted various regions of the 
country since early this year. My understanding is that the 
Administration has requested some $321 million for the Corps, and has 
informally concurred that the real needs are more in the range of $432 
million. Additional requirements may be forthcoming as a result of the 
incredible damages in North Dakota.
    How has the Corps been dealing with the damages that have been 
occurring? Have you had to transfer funds from existing accounts, such 
as construction or operation and maintenance, in order to respond to 
these floods?
    Mr. Lancaster. Thus far, the Corps of Engineers has been able to 
meet requirements by reprogramming funds scheduled to be obligated in 
the fourth quarter. However, this year's events have placed 
extraordinary demands on the emergency fund. As I informed the 
Appropriations Committees this morning, I intend to transfer unallotted 
Construction, General, funds to the Flood Control and Coastal 
Emergencies account, under the emergency authority of Public Law 84-99, 
pending receipt of a supplemental appropriation.
    Question. What will be the impact on the Corps programs if the 
funding proposed in the supplemental is not forthcoming soon? Is there 
a particular time constraint that you feel must be met in order to 
avoid having to borrow funds from ongoing projects to meet these 
unanticipated needs?
    Mr. Lancaster. Supplemental appropriations for the Flood Control 
and Coastal Emergencies, Operation and Maintenance, General, and Flood 
Control, Mississippi River and Tributaries, accounts are needed now. As 
I stated earlier, I intend to transfer funds from Construction, 
General, to Flood Control and Coastal Emergencies to allow the Corps to 
fulfill its emergency mission. This year's events have also affected 
Operation and Maintenance, General, and Flood Control, Mississippi 
River and Tributaries. The National Weather Service is predicting more 
flooding to result from the Spring snowmelt and hurricane season begins 
on June 1st. To not receive supplemental funding by the end of May will 
cause major work delays as the Corps is forced to reprogram additional 
funds to meet emergencies.
    Question. Earlier this year, West Virginia was affected by flooding 
along the Ohio River. Are any additional funds necessary to address 
damages resulting from that event?
    Mr. Lancaster. Yes, sir. Funds to repair damages to Corps projects 
in West Virginia are included in the President's supplemental 
appropriations request.
                           tug fork projects
    Question. Last year, Congress provided $12.5 million for ongoing 
activities in the West Virginia areas that are part of the Levisa/Tug 
Fork flood protection program. This year's budget includes funding for 
ongoing work at Matewan, and for the ongoing study in McDowell County. 
But no funds are included for ongoing flood protection actions underway 
in Hatfield Bottom and Upper and Lower Mingo County, nor to initiate 
flood proofing and acquisition in approved areas in McDowell and Wayne 
counties. Why are no funds included in the budget for the Hatfield 
Bottom and Lower and Upper Mingo County components of the Tug Fork 
project?
    Mr. Lancaster. The Administration does not support these elements 
because they are not economically justified.
    Question. Have Upper and Lower Mingo County identified the 
necessary cost-sharing to comply with their particular authorizing 
requirement?
    Mr. Lancaster. The sponsor for the Upper and Lower Mingo County 
non-structural projects is the Mingo County Commission. The Mingo 
County Commission would provide the required 5 percent non-federal 
cost.
    Question. What funding is necessary in fiscal year 1998 to keep 
these projects on schedule?
    General Fuhrman. The approved capabilities for fiscal year 1998 
are: Hatfield Bottom--$1,000,000, Upper Mingo County--$3,000,000, and 
Lower Mingo County--$6,300,000. Although project and capabilities 
reflect the readiness of the work for accomplishment, they are in 
competition for available funds and manpower Army-wide. In this 
context, the fiscal year 1998 capability amounts consider each project 
by itself without reference to the rest of the program. However it is 
emphasized that the total amount proposed for the Army's Civil Works 
Program in the President's budget for fiscal year 1998 is the 
appropriate amount consistent with the Administration's assessment of 
national priorities for Federal investments and the objectives of 
avoiding large budget deficits and the serious adverse effect that 
Government borrowing is having on the national economy. In addition, 
the total amount proposed for the Army's Civil Works Program in the 
President's Budget is the maximum that can be efficiently and 
effectively used. Therefore, while we could utilize additional funds on 
individual projects, offsetting reductions would be required in order 
to maintain our overall budgetary objectives.
    Question. What funding is necessary to initiate flood proofing and 
acquisition in McDowell and Wayne counties?
    General Fuhrman. The fully funded amount for the Wayne County non-
structural project is $14,050,000. Funding necessary to initiate flood 
proofing and acquisition in for Wayne County is $1,200,000. The 
Detailed Project Report for the McDowell County non-structural project 
is scheduled to be completed in fiscal year 1998 and $1,085,000 is 
included in the budget for this effort. Implementation of the project 
could not be undertaken until fiscal year 1999.
    Question. What role would there be for a flood warning system in 
protecting residents of the Tug Fork Valley? What would be the 
estimated cost for installation of such a system?
    General Fuhrman. In the areas protected by floodwalls the proposed 
system would provide additional warning time to the emergency 
management personnel responsible for operation of the pump stations and 
closure of flood gates. In the areas not protected by structural 
projects, the flood warning system would improve warning time for 
evacuation of the residents and possessions from the flood zone. The 
estimated total project cost for a flood warning system in the Tug Fork 
Valley is $421,000 with an estimated Federal cost of $400,000 and an 
estimated non-Federal cost of $21,000.
         moorefield and petersburg, wv, local flood protection
    Question. In 1990, Congress authorized construction of flood 
control protection projects in Moorefield and Petersburg, West 
Virginia. These areas suffered considerable damage as a result of 
flooding in November, 1985, and the communities have been working to 
improve their flood protection ever since. The Corps awarded the 
construction contract for the Federal component (earthen levee) at 
Moorefield last year, and construction is scheduled for completion in 
February, 1998. Petersburg is also progressing. Funds to complete 
construction were included in the fiscal year 1997 Energy and Water 
Appropriations bill. However, due to last year's flooding subsequent to 
Hurricane Fran and delays associated with land acquisition, the local 
project sponsors are concerned about what the final project costs may 
be and whether they will be expected to provide additional funding.
    What are the current cost estimates for the Moorefield and 
Petersburg projects?
    Mr. Lancaster. The current cost estimate for the Moorefield, West 
Virginia, local flood protection project is $25,900,000 with an 
estimated Federal cost of $20,111,000 and an estimated non-Federal cost 
of $5,789,000. The current cost estimate for the Petersburg, West 
Virginia, local flood protection project is $24,575,000 with an 
estimated Federal cost of $17,900,000 and an estimated non-Federal cost 
of $6,675,000.
    Question. What actions is the Corps taking to address these 
concerns about factors that affect cost? Are there any alternatives 
available to the Corps to help address these cost issues without the 
local sponsors having to find additional funding?
    Mr. Lancaster. Factors which can effect further cost changes in 
these projects include either increases or decreases in actual versus 
estimated value of lands, easements, and rights-of-way, costs of 
construction and associated contract modifications during construction, 
and interest on the unpaid non-Federal cost share for each project. 
Changes which occur to any of these factors are brought to the 
attention of the non-Federal sponsor on a quarterly basis. Based on 
language contained in section 358 of the Water Resources Development 
Act of 1996, the Army Corps of Engineers has prepared a detailed report 
on real estate actions during 1996 relative to the Moorefield project. 
I am reviewing that report and the non-Federal sponsor's report on the 
same matter to see if Corps actions contributed to any flood damages to 
the Town of Moorefield and to determine if an increase in the Federal 
share of the project is warranted up to a maximum of $700,000. The 
Corps of Engineers also previously evaluated several options within its 
authority to find a reasonable and equitable solution to the current 
non-Federal financial shortfall for cost sharing both projects. 
However, the Corps has no authority to waive each sponsor's cost 
sharing obligations which are contained in Section 103(a) of the Water 
Resources Development Act of 1986 and detailed in the respective 
Project Cooperation Agreement for each project. Rather than suspend or 
terminate work on these projects, it was found to be in the best 
interest of the United States for the Federal Government to proceed 
with construction of both projects through to completion. Exercise of 
this option includes the understanding with both sponsors that upon 
completion of construction and resolution of all relevant claims and 
appeals, the Corps will compute the final total project cost and 
provide notification to each project sponsor of the final accounting of 
its share of total project costs, including appropriate interest for 
delinquent payments.
                     bluestone dam drift and debris
    Question. Section 357 of last year's Water Resource Development Act 
included a provision for the Corps to address drift and debris 
accumulation above the Bluestone Dam. Has the Corps completed an 
evaluation report and selected an alternative for how best to address 
these unsightly accumulations of trash?
    Mr. Lancaster. Yes, an evaluation report has been completed. The 
preferred ``Plan C/G,'' consists of the addition of four multi-level 
intakes for passing of the drift and debris through the dam during 
periods of high flows complemented with actions to remove some material 
from the lake. A downstream cleanup program to address the deposition 
of manmade trash and a public awareness program to emphasize the 
adverse consequences from dumping of manmade trash into the waterways 
of the New River basin have been developed.
    Question. Have the affected agencies in the area concurred with the 
Corps' proposed approach?
    Mr. Lancaster. The National Park Service and the West Virginia 
Department of Environmental Protection have expressed support for the 
preferred plan and have indicated an intent to participate in the 
implementation of the project both physically and fiscally.
    Question. What is the estimated cost to implement the recommended 
alternative? How much funding would be necessary in fiscal year 1998 to 
get started?
    General Fuhrman. The total estimated cost for the implementation of 
Plan C/G is a first cost of $6,856,700 including federal and non-
federal contributions. Funding in the amount of $475,000 would be 
necessary to initiate the project in fiscal year 1998.
                      robert c. byrd locks and dam
    Question. Last year, Congress appropriated $12.158 million for 
construction of mitigation responsibilities associated with this 
project. Additional funding is anticipated as being needed in fiscal 
year 1998 to keep this project going. What funding is included in the 
budget for this project? Is this amount sufficient to keep pace with 
anticipated progress on the mitigation work at Robert C. Byrd Locks and 
Dam?
    Mr. Lancaster. The fiscal year 1997 funds in the amount of 
$12,158,000 are being used for the construction and the mitigation work 
at the project. The fiscal year 1998 budget request is $5,356,000 
including $916,000 for the mitigation work planned for fiscal year 
1998. This amount will limit progress on the mitigation work.
    Question. What funding would be considered to be the ``approved 
capability'' to allow work on this project to proceed without 
disruption?
    General Fuhrman. The current approved capability for this project 
is $14,500,000, subject to the usual qualification.
                   tygart river basin, west virginia
    Question. Using funds appropriated in fiscal year 1995, the Corps 
has been conducting a reconnaissance level investigation of possible 
flood protection measures to protect communities in the Tygart River 
basin. This report was completed in December, 1995. What can you tell 
us about the recommendation of this report and is further study 
necessary?
    Mr. Lancaster. The study undertook reconnaissance level 
investigations of possible structural flood damage reduction measures 
at Belington and Philippi, in Barbour County, West Virginia. River 
channel improvements and levee/floodwall systems were considered. The 
study found that projects at Philippi were not economically feasible; 
that is, the benefits would not exceed the costs. At Belington, a 
levee/floodwall system providing a 35 year level of protection was 
found to be economically feasible. The report recommended that a cost-
shared feasibility study be undertaken at Belington. Further study is 
necessary to identify the best plan and to complete National 
Environmental Policy Act, cultural resource, and Hazardous, Toxic and 
Radioactive Waste requirements.
    Question. What would be the cost-sharing requirements if these 
projects were pursued further?
    Mr. Lancaster. The feasibility study costs would be cost-shared 50 
percent by the Federal and 50 percent by the respective potential local 
sponsors, the Cities of Belington and Philippi. Project construction 
would be shared at 65 percent Federal and 35 percent non-Federal.
                    cheat river basin, west virginia
    Question. What recommendations have been identified for further 
consideration?
    Mr. Lancaster. The Cheat River Basin reconnaissance study 
recommended that a feasibility study be initiated for a channel 
improvement project at Parsons, West Virginia in the interest of flood 
control, a feasibility study be initiated for an environmental 
restoration project on the North Fork of Lick Run, and additional 
reconnaissance studies be initiated for Rowlesburg and Camp Dawson, 
West Virginia.
    Question. Are all these possible projects ready to proceed to the 
feasibility study stage?
    Mr. Lancaster. No, sir. The City of Parsons and the Tucker County 
Commission could not provide the necessary local sponsor financing to 
proceed with a channel improvement project. The West Virginia Divisions 
of Environmental Protection and Natural Resources chose not to pursue 
the North Fork Lick Run environmental restoration project. A Letter of 
Intent has been received from the City of Rowlesburg to conduct a 
reconnaissance study. No interest in further study has been received 
from Camp Dawson.
    Question. What is the estimated cost to conduct the necessary 
reconnaissance studies for Rowlesburg and Camp Dawson?
    Mr. Lancaster. The Administration and the Congress have reached an 
agreement that, in most cases, reconnaissance studies will be limited 
to $100,000, which will be used to identify the problem, the Federal 
interest in its solution, and a non-Federal cost sharing partner for a 
subsequent feasibility phase.
    Question. Is a non-Federal partner and cost-sharing agreement 
necessary to complete the reconnaissance level study?
    Mr. Lancaster. No, sir. Only after completion of the reconnaissance 
phase would the potential sponsor and the Corps have to sign a cost 
sharing agreement to initiate the feasibility phase.
    Question. If funds were provided in fiscal year 1998 to conduct the 
full reconnaissance studies for Rowlesburg and Camp Dawson, would the 
Corps be able to conduct such work in fiscal year 1998?
    Mr. Lancaster. Yes, the Corps could utilize these funds to conduct 
a full reconnaissance study for both locations.
    Question. What is the estimated cost for the improvement identified 
as possible in Parsons?
    Mr. Lancaster. The channel improvement project is estimated to cost 
$9 million.
    Question. What is the estimated cost for the feasibility study 
phase for Parsons?
    Mr. Lancaster. It has been estimated that the feasibility study 
would cost approximately $700,000.
                                 ______
                                 
                Questions Submitted by Senator Hollings
                     jasper county, south carolina
    Question. Last year in the Energy and Water Appropriations bill, 
the Congress mandated that no funds, no matter the source, shall be 
used to acquire lands in Jasper County, South Carolina in connection 
with the Savannah Harbor, Georgia, navigation project. This was 
included by the Committee out of concern that the Corps was abusing or 
threatening to abuse its Federal authority to leverage acquisition of 
the South Carolina properties despite the opposition of the South 
Carolina property owners and local elected officials. What is the 
current status of the Corps efforts in this regard?
    Answer. There is no effort underway by the Corps of Engineers to 
acquire lands in Jasper County, South Carolina, in support of the 
Savannah Harbor, Georgia, navigation project. The provision of lands 
required for a project is the responsibility of the local non-Federal 
sponsor. The Georgia Department of Transportation, the sponsor for the 
navigation project, is negotiating with the state of South Carolina 
concerning lands to be used as disposal areas for project dredged 
material and other purposes.
    Question. I am well aware of the length which local sponsors go to 
acquire disposal areas. I have witnessed it in Charleston and 
Georgetown, South Carolina. If the Corps was or is planning to use 
Federal authority or leverage to acquire disposal areas for the 
Savannah Harbor project, what justifies the use of Federal powers in 
Savannah and not in Charleston and Georgetown?
    Answer. The Corps of Engineers has been granted authority by the 
Congress to acquire lands in support of authorized project purposes. 
The use of the eminent domain authority has been required throughout 
the history of the Savannah Harbor navigation project when the local 
sponsor has requested the Corps of Engineers to condemn lands because 
the sponsor lacked the legal authority. The State of Georgia does not 
have legal authority to condemn lands in South Carolina. Several of the 
existing project disposal areas in South Carolina were acquired by 
Federal condemnation in the 1950's and 1960's and again in 1994 in 
support of the authorized project and at the request of the non-Federal 
sponsor. The use of Federal authority to acquire disposal area lands 
has not been employed for the Charleston and Georgetown, South 
Carolina, projects because Federal acquisition has never been requested 
by the non-Federal sponsors for those harbors.
    Question. I understand the local sponsors in Savannah currently 
possess disposal easements on the South Carolina property. Have the 
South Carolina property owners denied access to disposal areas? If so, 
could you provide documentation of these instances?
    Answer. Access to the disposal areas has never been denied by the 
South Carolina property owners. In this case, access to the local 
properties is by water or through the disposal area. Local property 
owners have never been denied access to their property through the 
disposal area by the project local sponsor.
    Question. As I understand, there may have been some attempts by the 
Corps or the local sponsors to purchase these properties. Could you 
please provide me an update on these efforts?
    Answer. At the present time, the Corps of Engineers is not involved 
in any attempts to purchase additional interests in lands for the 
Savannah Harbor navigation project disposal areas. The local sponsor, 
the Georgia Department of Transportation, is discussing the possibility 
of purchasing those lands with the land owners.
    Question. I have been watching this situation closely for some time 
and like the property owners and local officials, I am willing to work 
with the Corps and Georgia officials, however, I will not tolerate the 
abuse of Federal authority. I look forward to working with the Corps 
and all interested parties to solve this problem.
    Answer. The Corps of Engineers is striving to maintain a spirit of 
cooperation and will not abuse its Federal authority.
                   myrtle beach renourishment project
    Question. I was just in Myrtle Beach reviewing the first two 
reaches of the beach renourishment project. I would like to commend the 
Corps on a job well done. Unfortunately, there is a small glitch. To 
date, Congress has appropriated $35 million for the project and the 
Corps has spent $20 million, the rest has been reprogrammed. It is my 
understanding, the Corps is now $4.5 million short of funds needed to 
complete reaches one and two by the scheduled completion date of 
September 1997. If this shortfall remains, the contract will have to be 
suspended until fiscal year 1998 funds are made available. As you know 
a suspension in the contract will cost taxpayers money. What is the 
Corps doing to restore the $4.5 million this year so as to avoid these 
additional costs?
    Answer. The South Atlantic Division developed a corporate strategy 
to set project priorities to manage the Construction, General program 
funding shortfall occurring this fiscal year. The plan of action for 
the Myrtle Beach project for fiscal year 1997 is to monitor the 
progress of the project and reprogram funds as needed from other 
projects within the South Atlantic Division that have excess funds, 
thereby avoiding any additional costs due to suspension of the 
contract.
                                 ______
                                 
                 Questions Submitted by Senator Murray
                            turbine outages
    Question. I understand that 5 turbine units will be out of service 
during the spring salmon migration. I am particularly concerned about 
Unit # 5 at Ice Harbor Dam which is apparently out of service because a 
socket got left behind in the unit before it was fired up. These 
outages are costing the region needed power revenue as well as 
compromising fish passage conditions. Recognizing the very important 
needs to upgrade and maintain aging turbines, is it possible to avoid 
having turbines off-line during this critical time of the year? If not, 
why not?
    General Fuhrman. It is possible to minimize the risk of having 
units out of service during the critical fish time. Units that require 
maintenance, and would result in a direct impact to the fish passage 
program at the project, are not scheduled for a planned maintenance 
outage during the fish time unless the maintenance is associated with 
fish passage, such as bypass screen maintenance. An exception to this 
would be where the maintenance outage is short in duration, does not 
have an impact on fish passage, and has been coordinated with the 
Technical Management Team. Units that are undergoing a long-term major 
construction effort, such as rehabilitation, are scheduled to minimize 
the impact of the outage on the fish passage window if avoidance is not 
possible. As it can happen with all generating units, forced outages 
may occur during the critical time. We make all attempts to minimize 
the duration of the outage and to restore the unit to service.
    Question. Are there changes in the way these projects are 
undertaken that would provide more flexibility to avoid the spring 
migration?
    General Fuhrman. A formal policy has been issued to restrict long 
term planned maintenance outages to outside the critical fish passage 
period. Short term maintenance outages will only be permitted if they 
are required for fish passage reasons or do not result in a direct 
impact to fish passage and have been coordinated with the Technical 
Management Team. We are in the process of evaluating our preparedness 
to respond to unscheduled unit outages in their eventuality. This 
includes having adequate spare parts available, prepositioned resources 
for repair, and installation of on-line equipment monitoring.
    Question. Has the Corps implemented procedures to ensure the 
expensive mistake at Ice Harbor can not occur again? In brief, what are 
those procedures?
    General Fuhrman. At Ice Harbor Dam we have implemented a tool 
control process to be used during the work on the generator. This will 
reduce the probability of extraneous materials left in the generator 
during unit energization. We have also implemented an augmented program 
of electrical equipment testing to evaluate the remaining life of the 
generator winding. A formal unit startup procedure has been developed 
to capture all our ``lessons learned'' from the previous failures. 
Components in the generator which may have been adequate by prior 
standards but which are marginal by today's standard, have been 
replaced or will be replaced.
              direct funding of corps fish and power o&m:
    Question. It is my understanding that the Corps is currently 
negotiating with the Bonneville Power Administration regarding direct 
funding of the Corps Fish and Power Operations and Maintenance costs. 
Direct funding of Corps O&M will provide real efficiencies and savings. 
The Bureau of Reclamation has already entered into a direct funding 
Memorandum of Agreement with BPA. Could you please explain the delays 
in the Corps entering into such an agreement?
    General Fuhrman. The Department of the Army has been working very 
hard with BPA on a revised MOA addressing the direct funding of the 
Corps' O&M. We transmitted a proposal to the Department of Energy on 24 
February 1997 and recently received a reply which is being evaluated 
within the Army. To keep this process in perspective, BPA has already 
direct funded $8.1 million in Corps' non-routine O&M under an existing 
MOA between the agencies signed in December 1994. We are presently 
working on additional sub-agreements to this MOA for direct funding of 
more non-routine O&M at Corps hydropower projects.
    Question. If these issues have not been a concern for the Bureau, 
why can't they be worked out between the Corps and BPA?
    General Fuhrman. The Department of the Army is concerned about 
modeling an agreement after the one that the Department of Energy has 
with the Bureau of Reclamation. That agreement with the Bureau is 
similar to an agreement which has been proposed by BPA to the Army. The 
Army has provided comments to the Department of Energy on the proposed 
Direct Funding Agreement for Operations and Maintenance Power Costs 
between Bonneville Power Administration and the Department of the Army. 
Our principal concerns involve the BPA proposal to directly fund all 
hydropower O&M costs, a proposal for binding arbitration, and a 
proposal for monetary performance incentives.
    Question. When do you expect to resolve this issue and initiate 
direct funding? Can this process be expedited? I would urge you to 
resolve it as soon as possible.
    General Fuhrman. As evidenced by the recent exchange of letters 
with the Department of Energy, we are working within the Administration 
to develop an expanded agreement for direct funding. We hope to 
finalize the agreement in the near future.
                          hopper dredge fleet
    Question. Please provide the following dredging information for 
federally funded maintenance, construction and unscheduled or emergency 
dredging in each of the last five years:
    A. Total quantities dredged with all types of dredges.
    B. Industry quantities dredged with all types of dredges.
      1. Industry percent of the total (all types of dredges).
    C. Corps quantities dredged with all types of dredges.
      1. Corps percent of the total (all types of dredges).
    D. Combined industry and Corps hopper dredge quantities and that 
percent of the total quantities for all types of dredges.
    E. Industry hopper quantities.
      1. Industry hopper percent of the total quantities for all types 
of dredges.
      2. Industry hopper percent of the total quantities for hopper 
dredges.
    F. Corps hopper quantities.
      1. Corps hopper percent of the total quantities for all types of 
dredges.
      2. Corps hopper percent of the total quantities for hopper 
dredge.
    General Ballard. I will provide that information for the record.
    [The information follows:]

                                                                              DREDGING PROGRAM--HISTORICAL SUMMARY                                                                              
                                                                                         [Million C.Y.]                                                                                         
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                    All types of dredging                                              Hopper dredging                          
                                                                  ------------------------------------------------------------------------------------------------------------------------------
                                                                                     Industry                Corps            Combined industry          Industry                  Corps        
                                                                     Total   ----------------------------------------------       and Corps      -----------------------------------------------
                                                                    quantity                                               ----------------------                                               
                           Fiscal year                              dredged                                                              Hopper   Percent of  Percent of  Percent of  Percent of
                                                                    with all                                                            dredging     total       total       total       total  
                                                                    types of   Quantity  Percentage   Quantity  Percentage   Quantity      as     quantities  quantities  quantities  quantities
                                                                    dredges     (C.Y.)    of total     (C.Y.)    of total     (C.Y.)    percent     for all   for hopper    for all   for hopper
                                                                     (C.Y.)                                                              of all    types of     dredges    types of     dredges 
                                                                                                                                         types      dredges                 dredges             
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1992.............................................................      244.6      192.2        78.6       52.4        21.4       58.0       23.7        14.6        61.5         9.1        38.5
1993.............................................................      269.9      231.5        85.8       38.4        14.2       63.5       23.5        15.9        67.6         7.6        32.4
1994.............................................................      305.6      253.1        82.8       52.5        17.2       78.4       25.7        19.7        76.7         6.0        23.3
1995.............................................................      251.2      189.5        75.5       61.7        24.5       63.1       25.1        17.0        67.6         8.1        32.4
1996.............................................................      258.6      206.1        79.7       52.5        20.3       65.0       25.2        16.8        67.0         8.3        33.0
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

                 hopper dredge work--historical summary
    Question. Please report, by district, hopper dredge work for the 
past five years:
    A. The number of industry bids per each hopper contract.
    B.What is the average percentage of difference between the industry 
low bidder and the government estimate to do the work.
    General Ballard. I will provide that information for the record.
    [The information follows:]
           five year summary of hopper dredging contract bids
    The following tables indicate the hopper dredge work for the last 
five years. The tables are presented by East, Gulf, Great Lakes, and 
West Coast. Negative indicates the awarded contract bid amount was less 
than the government estimate. The government estimate does not include 
profit and overhead that the contractor must include in his bid. In 
addition, the percent difference does not reflect the actual cost 
difference (plus or minus) after dredging is completed and final 
payment is made to the contractor.

                                      HOPPER DREDGING CONTRACTS BY DISTRICT                                     
----------------------------------------------------------------------------------------------------------------
                                                                                                    Percent     
                                                                                                   difference   
                                                                                       No. of   between winning 
             District                                 Project name                    bidders       bid and     
                                                                                                   Government   
                                                                                                  estimate\1\   
----------------------------------------------------------------------------------------------------------------
            EAST COAST                                                                                          
                                                                                                                
Fiscal year 1992:                                                                                               
    Norfolk.......................  Baltimore Hbr--Cape Henry.......................        3              -38.2
    Norfolk.......................  Chincoteague Inlet..............................        2               24.0
    Philadelphia..................  Cape May, NJ Beachfill..........................        3              -21.7
    Charleston....................  Port Royal Ent. Channel.........................        3              -20.5
    Jacksonville..................  Kings Bay.......................................        3               90.9
    Savannah......................  Brunswick Entrance Channel......................        3               43.7
    Savannah......................  Savannah Entrance Channel.......................        3              -36.6
    Wilmington....................  Morehead City Harbor Ocean Bar..................        4              -29.5
    Wilmington....................  Oregon Inlet Bar................................        3               24.3
Fiscal year 1993:                                                                                               
    New York......................  New York Harbor.................................        3                4.2
    Norfolk.......................  Chincoteaque Inlet..............................        2              -41.6
    Norfolk.......................  Thimble Shoal Lower Chspk. Bay..................        3              -34.9
    Philadelphia..................  C & D Cnl/up Chspk..............................        3               29.5
    New England...................  Newburyport Harbor, Ma..........................        2              -25.2
    Charleston....................  Georgetown Entrance Channel.....................        3              -38.2
    Jacksonville..................  Naval Station Mayport...........................        1               55.2
    Savannah......................  Brunswick Entrance Channel......................        3               -2.1
    Wilmington....................  Wilmington & Morehead O. Bar....................        3              -46.8
Fiscal year 1994:                                                                                               
    New York......................  Jamaica Bay.....................................        2               13.9
    New York......................  Seabright 1a....................................        2              -21.9
    Norfolk.......................  Cape Henry--York Spit...........................        2              -36.5
    Norfolk.......................  Chincoteague Inlet..............................        2              -49.0
    Philadelphia..................  Schuylkill River................................        2               -1.1
    New England...................  Conn. River. Below Hartford Ct..................        3              -39.7
    Charleston....................  Georgetown Ent. Maintenance.....................        2              -23.3
    Charleston....................  Port Royal Ent. Maintenance.....................        2              -30.4
    Jacksonville..................  Duval Co Be, Cont 1 & 2 \1\.....................        4               -9.7
    Jacksonville..................  Ft. Pierce Harbor (Was Pb/fp)...................        4              -60.6
    Jacksonville..................  Kings Bay/Fernandina............................        2              -20.8
    Jacksonville..................  Palm Beach Harbor (Terminated)..................        5               51.1
    Jacksonville..................  San Juan Harbor.................................        5              -26.0
    Savannah......................  Brunswick Entrance Channel......................        3               26.9
    Savannah......................  Savannah Entrance Channel.......................        3              -25.4
    Wilmington....................  Morehead City Harbor............................        3               16.9
    Wilmington....................  Wilmington Harbor Ocean Bar.....................        2                9.2
    Wilmington....................  Wilmington Harbor, Ocean Bar 2 yr...............        2              -37.9
Fiscal year 1995:                                                                                               
    Baltimore.....................  Balt. Harb, Cape Henry, Va......................        3               -9.7
    New York......................  Hudson River, Stuyvesant-germ...................        2               21.8
    New York......................  Rockaway Beach Nourishment......................        3               52.2
    Norfolk.......................  Chincoteague In. Ocean Bar......................        2               15.1
    Norfolk.......................  Norfolk Harbor--45 & 50 Ft......................        1              -27.1
    Norfolk.......................  Rudee Inlet.....................................        2               -8.2
    Philadelphia..................  Delaware River, Phila to Sea....................        2               31.9
    New England...................  Block Island Harbor, RI.........................        4              -27.6
    Charleston....................  Charleston Entrance.............................        3              -37.5
    Jacksonville..................  Fernandina/Kings Bay Ent. Ch. & Tac.............        3              -18.6
    Jacksonville..................  Palm Beach Harbor...............................        2               36.4
    Jacksonville..................  St Augustine Harbor.............................        2               43.4
    Savannah......................  Brunswick Entrance Channel......................        2              -12.8
    Savannah......................  Savannah Entrance Channel.......................        3              -28.5
    Wilmington....................  Morehead City Ocean Bar.........................        3               -7.1
Fiscal year 1996:                                                                                               
    New York......................  Jamaica Bay, NY.................................        3              -19.3
    Norfolk.......................  Chincoteague Inlet--Ocean Bar...................        2               -8.6
    Norfolk.......................  Thimble Shoal...................................        4              -23.0
    New England...................  Newburyport Harbor, NH..........................        2              -30.0
    Charleston....................  Georgetown Entrance.............................        2              -18.7
    Charleston....................  N. Myrtle Beach Shore Protection................        4               -3.5
    Charleston....................  Port Royal Entrance, SC.........................        2              -40.9
    Jacksonville..................  Jacksonville Harbor.............................        2               12.4
    Savannah......................  Brunswick Entrance Channel......................        3              -19.0
    Savannah......................  Savannah Entrance Channel.......................        2               32.7
    Wilmington....................  Manteo (Ocean Bar)..............................        2  .................
    Wilmington....................  Morehead City (Ocean Bar).......................        2              -43.2
                                                                                                                
            GULF COAST                                                                                          
                                                                                                                
Fiscal year 1992:                                                                                               
    New Orleans...................  Calcasieu River, Lsd Hopper.....................        3              -16.1
    New Orleans...................  Mississippi River, Swp Lsd Hopper 1.............        1               10.3
    New Orleans...................  Mississippi River, Swp Lsd Hopper 2.............        1               19.7
    New Orleans...................  Mississippi River, Swp Lsd Hopper 3.............        2              -31.8
    Mobile........................  Mobile Harbor, Bay..............................        3              -39.8
    Mobile........................  Mobile Harbor, Upper & Lower....................        3              -16.0
    Galveston.....................  Brazos Is Harbor., Entrance Ch..................        2               -4.7
    Galveston.....................  Freeport Harbor. Entrance Ch....................        4              -45.9
    Galveston.....................  Snww, Sabine Pass out Bar Ch....................        2              -50.4
Fiscal year 1993:                                                                                               
    New Orleans...................  Calcasieu R Bar Ch Lsd Hopper...................        1               23.4
    New Orleans...................  Mississippi River Southwest Pass................        2               -5.3
    New Orleans...................  Mississippi River Southwest Pass................        1               24.8
    New Orleans...................  Mississippi River Southwest Pass................        1               13.9
    New Orleans...................  Mississippi River Southwest Pass................        2              -13.2
    New Orleans...................  Mississippi River Southwest Pass................        1               22.8
    New Orleans...................  Mississippi River Southwest Pass................        1                3.7
    Mobile........................  Mobile Harbor, Bay..............................        3               -8.4
    Mobile........................  Mobile Harbor, Bay..............................        2                0.8
    Mobile........................  Pascagoula Harbor, Bar..........................        3                1.1
    Galveston.....................  Galveston Harbor Entr & Anchor..................        2               -1.3
Fiscal year 1994:                                                                                               
    New Orleans...................  Calcasieu River Bar Channel.....................        1               17.9
    New Orleans...................  Mississippi River Southwest Pass................        1               10.4
    New Orleans...................  Mississippi River Southwest Pass................        1               21.4
    New Orleans...................  Mississippi River Southwest Pass................        1               14.9
    New Orleans...................  Mississippi River Southwest Pass................        1                7.0
    New Orleans...................  Mississippi River Southwest Pass................        1               14.6
    New Orleans...................  Mississippi River Southwest Pass................        1               17.6
    New Orleans...................  MRGO Bar Channel................................        1               17.0
    Mobile........................  Mobile Harbor...................................        3                3.6
    Galveston.....................  Freeport Harbor. Entrance Channel...............        1               22.9
Fiscal year 1995:                                                                                               
    New Orleans...................  Calc River Bar Channel..........................        2                5.9
    New Orleans...................  Mississippi River Southwest Pass................        2               15.2
    New Orleans...................  Mississippi River Southwest Pass................        1               18.9
    New Orleans...................  Mississippi River Southwest Pass................        1               46.1
    New Orleans...................  Mississippi River Southwest Pass................        1               19.9
    New Orleans...................  Mississippi River Southwest Pass................        1               22.4
    Mobile........................  Mobile Harbor, Bay..............................        3              -32.6
    Mobile........................  Mobile Harbor, Bay..............................        2               -5.3
    Galveston.....................  Brazo I. Harbor/Entr Chan.......................        2              -14.2
    Galveston.....................  Freeport Entrance Chan..........................        2               19.4
Fiscal year 1996                                                                                                
    New Orleans...................  Calcasieu River Bar Channel.....................        2               -6.6
    New Orleans...................  Mississippi River Southwest Pass................        2                1.9
    New Orleans...................  Mississippi River Southwest Pass................        2               -1.2
    New Orleans...................  Mississippi River Southwest Pass................        2              -12.2
    New Orleans...................  Mississippi River Gulf Outlet Bar Channel.......        2              -21.1
    Mobile........................  Gulfport Bar....................................        3              -47.5
    Mobile........................  Mobile Bay......................................        2               -3.7
    Galveston.....................  Brazo Island Harbor, Main Channel...............        3              -35.5
    Galveston.....................  Matagorda, Entrance Channel.....................        1                0.5
                                                                                                                
            GREAT LAKES                                                                                         
                                                                                                                
Fiscal year 1992:                                                                                               
    Buffalo.......................  Maunee Bay (Toledo Harbor)......................        2              -25.5
    Buffalo.......................  Sandusky Harbor, NY.............................        3               -4.7
    Buffalo.......................  Toledo River (Maumee River).....................        3                3.8
    Detroit.......................  Channels in Lake St Clair, MI...................        3               14.0
    Detroit.......................  Detroit River, MI (Eo≪).......................        2               27.6
    Detroit.......................  Monroe Harbor, MI...............................        3               17.5
    Detroit.......................  St Clair River, MI..............................        3              -71.9
Fiscal year 1993:                                                                                               
    Buffalo.......................  Conneaut........................................        5               -6.3
    Buffalo.......................  Rochester/Oswego................................        4                7.8
    Buffalo.......................  Sandusky........................................        3                7.2
    Buffalo.......................  Toledo Harbor...................................        2               24.3
    Buffalo.......................  Toledo River....................................        4              -17.9
    Buffalo.......................  Saginaw River, MI...............................        3              -48.1
Fiscal year 1994:                                                                                               
    Buffalo.......................  Toledo Closed...................................        5               -4.8
    Buffalo.......................  Toledo Open water disposal......................        3               -0.4
    Buffalo.......................  Saginaw River, MI...............................        3              -24.9
Fiscal year 1995:                                                                                               
    Buffalo.......................  Toledo Harbor. Confined Disposal................        2               -8.8
    Buffalo.......................  Toledo Harbor. Open water disposal..............        4               11.5
Fiscal year 1996:                                                                                               
    Buffalo.......................  Erie Harbor.....................................        5              -31.8
    Buffalo.......................  Huron Harbor....................................        4              -24.8
    Buffalo.......................  Toledo Harbor. Open water disposal..............        4                3.8
    Buffalo.......................  Saginaw River, MI...............................        4              -23.2
                                                                                                                
            WEST COAST                                                                                          
                                                                                                                
Fiscal year 1992:                                                                                               
    Portland......................  Mouth Columbia River............................        3              -14.0
    San Francisco.................  San Pablo Bay, Mare Island St...................        2               -0.2
    San Francisco.................  Suisun Bay Channel..............................        2                6.9
Fiscal year 1993:                                                                                               
    Portland......................  Coos Bay Entrance Channel.......................        2               22.9
    Portland......................  Mouth Columbia. R. & Lwr. Will. R...............        3              -11.9
    Portland......................  Oregon South Coast..............................        2               18.7
    San Francisco.................  Crescent City Harbor............................        2              -14.0
    San Francisco.................  Oakland Harbor..................................        3              -21.0
Fiscal year 1994:                                                                                               
    Portland......................  Columbia River/Coos Bay Entrance................        3               -6.8
    Portland......................  Oregon South Coast..............................        3                6.5
    Seattle.......................  Grays Harbor & Chehalis River, WA-ID............        2              -18.7
    Seattle.......................  Grays Harbor & Chehalis River, WA-OR............        2               -2.4
    Seattle.......................  Grays Harbor-Fill SJ Spit Breach................        2               14.1
    San Francisco.................  Humbolt Bar & Entrance..........................        2                3.3
    San Francisco.................  Mare Island Strait..............................        2              -12.0
    San Francisco.................  Oakland Harbor..................................        3                9.7
    San Francisco.................  Petaluma River (ATF)............................        2               21.3
Fiscal year 1995:                                                                                               
    Portland......................  North Coast & Coos Bay Entrance.................        2               -8.2
    Portland......................  Oregon South Coast..............................        2               23.5
    Seattle.......................  Point Chehalis Beach Feed.......................        2               -4.8
    Los Angeles...................  Morro Bay Harbor................................        5               29.8
    Los Angeles...................  Ventura Harbor Emergency Dredging...............        3              -46.4
    San Francisco.................  Humboldt Harbor (Bar & Entrance Ch.)............        2               -1.6
    San Francisco.................  Oakland Harbor..................................        3              -17.5
    San Francisco.................  Pinole Shoal Channel............................        3              -32.4
Fiscal year 1996:                                                                                               
    Portland......................  Mouth Columbia R./Coos Bay Ent. Ch..............        2                4.9
    Los Angeles...................  Beach Renourishment Stage 10....................        3                9.2
    San Francisco.................  Humboldt harbor (Bar & Entrance ch.)............        2               -7.3
    San Francisco.................  Oakland Army Base...............................        3               -9.1
    San Francisco.................  Suisun Bay Channel..............................        2               17.8
----------------------------------------------------------------------------------------------------------------
\1\ Negative indicates the awarded contract bid amount was less than the government estimate.                   

                       hopper dredge work--delays
    Question. Please detail, on a district basis, project delays tied 
to dredge mobilization to the site or persistent breakdown of 
equipment.
    General Ballard. I will provide that information for the record.
    [The information follows:]

                                        SUMMARY OF DELAYED DREDGING WORK                                        
----------------------------------------------------------------------------------------------------------------
                                                                                                     Delay in   
                                                                                     Delay in        contract   
                                                                                  dredge arrival  completion due
          Corps of Engineers district                        Project                at job site    to contractor
                                                                                   from contract     equipment  
                                                                                  dredging start     breakdown  
                                                                                    date (days)       (days)    
----------------------------------------------------------------------------------------------------------------
Fiscal year 1993:                                                                                               
    Mobile....................................  Mobile Bay......................             105         ( \2\ )
    Savannah..................................  Brunswick Harbor, GA............          \1\ 76         ( \2\ )
Fiscal year 1994:                                                                                               
    Mobile....................................  Mobile Bay, AL..................              34         ( \2\ )
    New York..................................  Jamaica Bay, NJ.................              25              15
    New York..................................  Seabright, NJ Cut 1A............             120              27
Fiscal year 1995:                                                                                               
    Mobile....................................  Mobile Bay......................              23         ( \2\ )
    Savannah..................................  Brunswick Harbor, GA............          \1\ 30         ( \2\ )
    Philadelphia..............................  Philadelphia to Trenton.........         \3\ 116         ( \2\ )
Fiscal year 1996:                                                                                               
    Mobile....................................  Mobile Bay......................          \4\ 60         ( \2\ )
    Savannah..................................  Brunswick Harbor, GA............          \5\ 11         ( \2\ )
    Norfolk...................................  Thimble Shoal...................              35         ( \2\ )
    Norfolk...................................  Chincoteague....................              14         ( \2\ )
    New York..................................  Jamaica Bay.....................              24         ( \2\ )
    New York..................................  Long Branch, NJ.................              45         ( \6\ )
----------------------------------------------------------------------------------------------------------------
\1\ Contractor commitment on other Corps project dredging.                                                      
\2\ None.                                                                                                       
\3\ Contract was completed 140 days after contract scheduled completion date.                                   
\4\ Resolve bid protest.                                                                                        
\5\ Contractor commitment on another Corps dredging project.                                                    
\6\ Dredging not complete as of May 1997.                                                                       

                   hopper dredge work--cost overruns
    Question. Please detail, on a district basis, cost overruns due to 
higher bids or government dredge rate increases.
    General Ballard. I will provide a table with that information for 
the record. The government estimate does not include profit and office 
overhead as contractors include in their bids. Normally, 10 to 15 
percent is included in a contractor's bid for profit and office 
overhead. The amount shown in the table is the actual difference 
between the government estimate and the awarded contract. No attempt 
has been made to adjust the government estimate for profit and 
overhead. Negative values indicate that the awarded bid was lower than 
the government estimate.
    [The information follows:]

                                   HISTORICAL SUMMARY OF OVERRUNS BY DISTRICT                                   
                                                [Actual dollars]                                                
----------------------------------------------------------------------------------------------------------------
                                                                                                    Government  
          Corps of Engineers district                     Project name             Contracts \1\    dredge \2\  
----------------------------------------------------------------------------------------------------------------
Fiscal year 1992:                                                                                               
    Seattle...................................  Grays Harbor, WA................         874,500  ..............
    Norfolk...................................  Chincoteague Inlet..............         142,763  ..............
    Charleston................................  Port Royal Entrance Channel, SC.         384,100  ..............
    New Orleans...............................  Mississippi Gulf Outlets........         380,760  ..............
    New Orleans...............................  Mississippi Gulf Outlets........         427,070  ..............
    New Orleans...............................  Mississippi Gulf Outlets, LA....        -566,894  ..............
    New Orleans...............................  Calcasieu, LA...................        -440,488  ..............
Fiscal year 1993:                                                                                               
    Seattle...................................  Grays Harbor, WA................         624,500  ..............
    Savannah..................................  Brunswick Harbor, GA............       1,089,610  ..............
    Charleston................................  Georgetown, SC..................         278,325  ..............
    Portland..................................  South Coast, OR.................         331,250  ..............
    Portland..................................  Coos Bay Entrance Channel, OR...         171,000  ..............
    Portland..................................  North Coast, OR.................        -599,850  ..............
    New Orleans...............................  Mississippi River Baton Rouge to        -212,710  ..............
                                                 Gulf.                                                          
    New Orleans...............................  Mississippi River Baton Rouge to         592,912  ..............
                                                 Gulf.                                                          
    New Orleans...............................  Mississippi River Baton Rouge to        -427,010  ..............
                                                 Gulf.                                                          
    New Orleans...............................  Mississippi River Baton Rouge to         553,125  ..............
                                                 Gulf.                                                          
    New Orleans...............................  Mississippi River Baton Rouge to         647,230  ..............
                                                 Gulf.                                                          
    New Orleans...............................  Mississippi River Baton Rouge to          98,030  ..............
                                                 Gulf.                                                          
    New Orleans...............................  Calcasieu, LA...................         500,206  ..............
Fiscal year 1994:                                                                                               
    Seattle...................................  Grays Harbor, WA................         -45,000  ..............
    Seattle...................................  Grays Harbor, WA................         440,000  ..............
    Seattle...................................  Grays Harbor, WA................         -48,000  ..............
    Savannah..................................  Brunswick Harbor, GA............         531,299  ..............
    Charleston................................  Port Royal Entrance Channel, SC.         340,350  ..............
    Charleston................................  Georgetown, SC..................         177,200  ..............
    Portland..................................  South Coast.....................         281,700  ..............
    Portland..................................  North Coast.....................        -256,500  ..............
    New Orleans...............................  Mississippi River Baton Rouge to         774,230  ..............
                                                 Gulf.                                                          
    New Orleans...............................  Mississippi River Baton Rouge to          67,925  ..............
                                                 Gulf.                                                          
    New Orleans...............................  Mississippi River Baton Rouge to         379,870  ..............
                                                 Gulf.                                                          
    New Orleans...............................  Mississippi River Baton Rouge to         206,845  ..............
                                                 Gulf.                                                          
    New Orleans...............................  Mississippi River Baton Rouge to         388,716  ..............
                                                 Gulf.                                                          
    New Orleans...............................  Mississippi River Baton Rouge to         470,400  ..............
                                                 Gulf.                                                          
    New Orleans...............................  Calcasieu River, LA.............         405,960  ..............
    New Orleans...............................  Mississippi River Gulf Outlets..         347,935  ..............
Fiscal year 1995:                                                                                               
    Seattle...................................  Grays Harbor, WA................        -157,000  ..............
    Savannah..................................  Savannah Harbor, GA.............       1,138,308  ..............
    Savannah..................................  Brunswick Harbor, GA............         321,383  ..............
    Charleston................................  Charleston Harbor Entrance               991,900  ..............
                                                 Channel.                                                       
    Portland..................................  South Coast, OR.................         255,583  ..............
    Portland..................................  North Coast, OR.................        -260,360  ..............
    New Orleans...............................  Mississippi River Baton Rouge to         703,945  ..............
                                                 Gulf.                                                          
    New Orleans...............................  Mississippi River Baton Rouge to         507,950  ..............
                                                 Gulf.                                                          
    New Orleans...............................  Mississippi River Baton Rouge to       1,237,600  ..............
                                                 Gulf.                                                          
    New Orleans...............................  Mississippi River Baton Rouge to         311,659  ..............
                                                 Gulf.                                                          
    New Orleans...............................  Mississippi River Baton Rouge to         600,100  ..............
                                                 Gulf.                                                          
    New Orleans...............................  Calcasieu.......................         143,419                
Fiscal year 1996:                                                                                               
    Savannah..................................  Brunswick Harbor, GA............         236,251  ..............
    Philadelphia..............................  Delaware River..................  ..............         685,000
    Jacksonville..............................  Canaveral Harbor................  ..............         130,000
    Jacksonville..............................  Fort Pierce.....................  ..............          15,000
    New Orleans...............................  Mississippi River...............  ..............         480,000
    New York..................................  Buttermilk Channel..............  ..............          96,000
    Wilmington................................  Wilmington Harbor...............  ..............          95,000
    Charleston................................  Charleston Harbor Entrance              -764,000  ..............
                                                 Channel.                                                       
    Charleston................................  Georgetown Entrance Channel.....         271,500  ..............
    Charleston................................  Port Royal Entrance Channel.....         576,000  ..............
    Charleston................................  Myrtle Beach Shore Protection...         554,000  ..............
    Portland..................................  North Coast.....................         140,650  ..............
    New Orleans...............................  Calcasieu River, LA.............        -182,790  ..............
    New Orleans...............................  Mississippi River Baton Rouge to         158,415  ..............
                                                 Gulf.                                                          
    New Orleans...............................  Mississippi River Baton Rouge to         -37,807  ..............
                                                 Gulf.                                                          
    New Orleans...............................  Mississippi River Baton Rouge to        -147,084  ..............
                                                 Gulf.                                                          
    New Orleans...............................  Mississippi River Gulf Outlets..        -515,026  ..............
----------------------------------------------------------------------------------------------------------------
\1\ Difference between awarded bid and government estimate.                                                     
\2\ Additional project cost due to higher rental rate.                                                          

                          hopper dredge fleet
    Question. Please explain why charges for future dredge acquisition, 
known as ``plant increment,'' are included in the daily rate 
calculations of the ESSAYONS, YAQUINA, WHEELER and McFARLAND: how much 
of these annual charges are collected from each of the Corps dredges on 
an annual basis as part of the daily rate each dredge bills navigation 
projects, and how are these funds maintained or spent by the Corps?
    General Ballard. The ``plant increment'' charge ensures that the 
Civil Works Revolving Fund remains self-sustaining by recovering the 
increased costs for replacement of Corps dredges, and other plant and 
equipment, due to inflation. The plant increment charges are included 
in the rental rate charged to projects using Corps dredges. Plant 
increment revenues are deposited in a Revolving Fund account at Corps 
headquarters and are allocated, as required, to Corps activities for 
the acquisition of plant and equipment, including dredges and other 
floating plant, through the Plant Replacement and Improvement Program 
(PRIP). Following are plant increment charges for fiscal year 1996.

                          Plant Increment Costs

                           [Fiscal Year 1996]

McFARLAND...............................................     $880,800.00
WHEELER.................................................    1,365,886.45
ESSAYONS................................................    1,145,400.00
YAQUINA.................................................      646,400.04
                          hopper dredge fleet
    Question. Please explain the charges and the reasons for each 
change in depreciation of the ESSAYONS, YAQUINA, WHEELER and McFARLAND 
over the last five years. Were changes in depreciation for defense-
related equipment? Have these changes increased the daily rate each 
dredge bills navigation projects?
    General Ballard. Plant depreciation provides for reimbursement of 
the Revolving Fund for dredge acquisition costs, including additions 
and betterments, over the dredge's useful life. Depreciation is 
recalculated annually based on the first cost of the dredge plus the 
cost of any additions and betterments, minus depreciation to date. The 
balance to be depreciated is divided by the number of months remaining 
in the dredge's estimated useful life to obtain the monthly 
depreciation charge, which is used to derive a daily rate. Recently, 
the Corps re-evaluated its policy on depreciating hopper dredges. 
Originally, the decision had been made to depreciate only 60 percent of 
the cost of the dredges on the basis that 40 percent of the cost was 
due to requirements attributable to their military mission. That 
decision was no longer supportable since our re-evaluation found that 
the cost due military mission requirements had been overstated. As a 
result of increasing the share to be depreciated, the daily rate of the 
dredges was increased.
    Question. Over the past four years, Congress has directed the Corps 
to offer more hopper dredge work to the private sector. This additional 
work has taken from the traditional amount accomplished with the 
ESSAYONS, YAQUINA, WHEELER and McFARLAND in fiscal year 1992. Has this 
directive increased the average price-per-yard of the ESSAYONS, 
YAQUINA, WHEELER and McFARLAND and the daily rate the Corps bills 
navigation projects when it uses those dredges? Has this directive had 
an effect on the number and dollar amount of industry bids for hopper 
work? Has the Corps carried out any analysis of this Congressional 
directive?
    General Ballard. In fiscal year 1993, the Corps was directed to 
advertise an additional 7.5 million cubic yards of maintenance dredging 
normally performed by the Corps hopper dredges. This restricted the 
dredges to 180 days per year of dredging. Each dredge operation time 
was decreased by 50 dredging days per year. The Corps dredges were 
placed in standby status in event industry was unable to accomplish the 
additional work. The hopper dredge owning district was provided funds, 
from savings and slippage, for the 50 days of standby time; therefore, 
the dredge rental rate remained the same with no additional cost to 
projects. Industry successfully accomplished the additional 7.5 million 
cubic yards of dredging. Beginning in fiscal year 1997 each Corps 
hopper dredge was placed on a 180 dredging day per year schedule. The 
rental rate for each Corps hopper dredge was adjusted accordingly. This 
will increase project dredging costs. Severe shoaling resulting from 
Tropical Storm Josephine in the Gulf, floods along the Ohio River and 
the upper mid-west placed an unusually high demand on both Corps and 
industry dredging capability. This increased the number of dredging 
contracts advertised for competitive bid and resulted in fewer bidders 
per contract advertisement, since industry dredging equipment was 
committed on other Corps projects. The Minimum Dredge Fleet study, 
currently underway, will include an analysis of the Congressional 
directive on the Corps dredging program.
                       minimum dredge fleet study
    Question. When will the Corps release its Minimum Dredge Fleet 
Study? Will it include an analysis of current and recent peak dredging 
seasons? What process does the Corps plan to carry out to provide 
Congress and interested stakeholders the opportunity to comment on a 
draft report before it is final?
    Mr. Lancaster. The Minimum Dredge Fleet study will be completed in 
July 1997. The study will include an analysis of dredging requirements 
including peak hopper dredge seasonal demands. The draft study will be 
coordinated with the Dredging Contractors of America, ports and other 
stakeholders, as well as interested committees and members of Congress.
                  hopper dredge operating cost summary
    Question. Please provide the amount of O&M funding consumed by 
operating the ESSAYONS, YAQUINA, WHEELER and McFARLAND in each of the 
last five years by examining their daily rate and the number of days 
each dredge worked.
    General Ballard. I will provide that information for the record.
    [The information follows:]

                                  DREDGING COSTS AND DAYS OF OPERATION PER YEAR                                 
----------------------------------------------------------------------------------------------------------------
                                         McFARLAND            WHEELER            ESSAYONS           YAQUINA     
                                  ------------------------------------------------------------------------------
           Fiscal year                O&M funds           O&M funds          O&M funds          O&M funds       
                                      expended     Days    expended   Days    expended   Days    expended   Days
----------------------------------------------------------------------------------------------------------------
1992.............................     $11,405,854   240  $11,077,080   150  $14,217,500   235   $8,316,000   231
1993.............................      13,472,006   188   17,020,000   180    9,502,500   181    6,545,000   187
1994.............................      14,098,680   191   17,016,916   180   10,175,200   184    6,788,100   187
1995.............................      15,155,580   192   16,901,219   193   12,720,000   212    7,200,700   191
1996.............................      11,262,600   187   15,300,000   180   12,510,000   180    6,925,500   171
----------------------------------------------------------------------------------------------------------------

                ability to maintain navigation channels
    Question. How has the flooding in various parts of the country 
affected the Corps ability to maintain navigation channels at their 
authorized depth?
    General Ballard. At this time, the only dredging difficulties are 
on the lower Mississippi River. Shoaling along the Ohio River and Upper 
Mississippi River is not as severe as the lower Mississippi.
    Question. Has the Corps experienced difficulties in acquiring 
enough dredges to meet peek dredging demands in some regions, such as 
the lower Mississippi River?
    General Ballard. Yes, sir. Two contracts were advertised and only 
one bid was received for each. Neither contract was awardable, since 
the bids exceeded the Government estimate by 27 and 29 percent. For 
this reason, the Corps hopper dredge McFARLAND was reassigned to the 
Mississippi River.
    Question. Have there been questions regarding industry joint 
ventures and substitutions of equipment to respond to dredging needs in 
the Mississippi River recently?
    General Ballard. Yes, there have been questions. However, the 
industry has demonstrated a high degree of commitment to seek all legal 
ways possible to accomplish the dredging requirements.
    Question. Has the Corps considered sending the McFARLAND and 
ESSAYONS to the lower Mississippi to meet dredging needs?
    General Ballard. The McFARLAND was assigned to assist on the 
Mississippi River emergency dredging. The Corps did consider sending 
the ESSAYONS to the Mississippi River, however, the dredge remained to 
remove substantial shoaling in the northwest navigation projects.
                      criteria for moving dredges
    Question. What is the process and what criteria are used to make 
decisions to move dredges to other regions in emergencies?
    General Ballard. First, we look at industry dredges, where they are 
working, their availability due to contract commitments, and if the 
contract dredge can be released without impacting commercial 
navigation. If sufficient industry dredges are not available, we look 
at the availability of Corps dredges.
          east water dredging project for the port of seattle
    Question. The port of Seattle is working with the Corps to move the 
East Waterway dredging project forward expeditiously. The Port may 
choose to use its own funds this year to dredge a portion of this 
Superfund site to allow 45-foot draft container vessels and later use 
federal funds to complete the dredging. It will also seek feasibility 
study money in fiscal year 1998. In analyzing the costs and benefits of 
this project, can the Corps assure the Port that it will include the 
costs and benefits produced by work carried out by the Port's partial 
dredging when it does the cost/benefit analysis for the federal portion 
of the project?
    General Fuhrman. In conducting the study to determine the 
feasibility of the project as directed by Congress in Section 356 of 
the Water Resources Development Act of 1996, our analysis must conform 
to the Economic and Environmental Principles and Guidelines of the U.S. 
Water Resources Council and policies of the Administration. These 
policies require recognition of conditions that would prevail in the 
absence of Federal participation as the basis for evaluating benefits 
and costs. Therefore, our study will evaluate the feasibility of 
deepening the East Waterway on the basis that the work to be performed 
by the Port of Seattle is in place, which means the benefits and costs 
of the Port's work will not be included in the analysis.
                                 ______
                                 
                 Questions Submitted by Senator Dorgan
         red river valley flooding, north dakota and minnesota
    Question. During the winter of 1996-1997, North Dakota suffered 
from record snowfall, which endangered the lives of residents and their 
livestock and crops. Then North Dakota suffered the worst flooding ever 
recorded in North America. These conditions led to Presidential 
disaster declarations to assist North Dakotans. Does the Corps of 
Engineers need additional funding in fiscal year 1997 or fiscal year 
1998 to meet the needs of North Dakota that resulted from the snow, 
blizzards, and flooding of the winter of 1996-1997?
    General Fuhrman. It is expected that the 1997 flood disaster will 
generate numerous local initiatives to implement permanent flood 
control projects at various communities in the Red River of the North 
basin. Potential projects could be implemented as a specifically 
authorized project or through the Continuing Authorities Program (CAP), 
which gives the Chief of Engineers the discretionary authority to plan, 
design, and construct small flood control projects. Communities that 
are expected to request projects include Grand Forks, Grafton, 
Wahpeton, Abercrombie, Valley City, Fort Ransom, Lisbon, Kindred, 
Fargo, Mapleton, Harwood, North River, and Drayton in North Dakota and 
East Grand Forks, Breckenridge, Moorhead, Perley, Hendrum, Shelly, 
Crookston, Beltrami, Warren, Kennedy, Hallock, Roseau, and St. Vincent 
in Minnesota. Of these communities, only East Grand Forks has a 
specific authorization for a project. Current fiscal year 1997 funding 
and fiscal year 1998 budget amounts include funds only for the ongoing 
feasibility study at Grand Forks and continuation of Preconstruction, 
Engineering and Design at Crookston. There is also some very limited 
funding for initial community meetings and to initiate some CAP 
studies, although the nationwide demands for this program greatly 
exceed the funds available. Additional funds could be used in fiscal 
year 1997 and fiscal year 1998 to reactivate the East Grand Forks 
project. We will continue to monitor the flood recovery effort and work 
closely with the affected communities to develop both short and long 
term solutions to the flood problems in the basin.
    Question. What are the major measures that helped to prevent 
flooding in most communities such as West Fargo, Fargo and others? How 
much damage was prevented?
    General Fuhrman. The Corps of Engineers operates several permanent 
flood control reservoirs in the Red River basin which allowed us to 
store flood waters in the reservoir rather than releasing them 
downstream to contribute to the already swollen rivers and streams. 
These projects at Lake Ashtabula, Lake Traverse, Homme Lake, Orwell 
Lake and Red Lake Reservoir prevented several million dollars in 
damages during the 1997 flood. In addition, several local flood 
protection projects constructed by the Corps prevented or greatly 
reduced flood damages at such communities as Fargo, West Fargo, 
Enderlin and Pembina in North Dakota and Oslo and Halstad in Minnesota. 
In particular, the Sheyenne River Diversion Channel at West Fargo 
prevented an estimated $100 million in damages from occurring. Advance 
measures, which are emergency flood protection projects built by the 
Corps to protect public property and facilities in anticipation of 
serious flooding, were constructed at about 25 Red River communities in 
North Dakota and Minnesota; these projects resulted in substantial 
flood damage reduction. A preliminary assessment indicates that about 
$500 million in flood damages were prevented in the Red River basin 
during the 1997 flood as a result of permanent projects, advance 
measures and emergency works.
    Question. While we are still fighting the current floods, could you 
describe the Corps of Engineers' long-term plans to prevent or mitigate 
damages due to flooding along the Red River of the North, the Sheyenne 
River and the James River?
    General Fuhrman. The Corps has several ongoing initiatives in the 
Red River, Sheyenne River and James River basins to address water 
resource problems at individual communities. A feasibility study is 
underway to investigate flood damage reduction measures along the Red 
River of the North at Grand Forks, North Dakota. Similarly, 
preconstruction, engineering and design are underway for a flood 
control project at Crookston, Minnesota. The remaining component of the 
Sheyenne River project, a 5 foot raise of the Baldhill flood pool, is 
in the detailed design phase; when completed, this project will provide 
additional flood control storage for protection of downstream 
communities. Other previously studied projects could be revisited in 
light of the catastrophic flooding this spring. Among these potential 
projects are East Grand Forks, MN; Grafton, ND; Pembina River, ND; and 
Twin Valley Lake, MN. Several small projects, which would provide 
protection for individual communities, are being pursued under the 
Continuing Authorities Program. With available funding, we will work 
closely with local communities to develop permanent flood control 
solutions consistent with the needs of the area and the region.
    [Note: Projects in James River basin were not addressed in above 
response; that basin is in MRD].
    Question. The Corps of Engineers mission includes both preparation 
and response to disasters throughout the nation. Will the Corps have 
the staff and technical expertise to respond to both man-caused and 
natural disasters after implementing the proposed restructuring?
    General Ballard. While some of our emergency operations resources 
will be located at different locations following reorganization, the 
Corps will continue to be able to meet our responsibilities in times of 
disaster. Our strength lies in maintaining a cadre of full-time 
professionals dedicated to natural disaster response at each district 
and division office. Our ability to respond to disasters is multiplied 
and leveraged through trained responders such as engineers, contract 
specialists, real estate specialists and others who are made available 
from their normal jobs in Corps offices across the country for response 
to each major disaster. This system allows us the ability to rapidly 
provide disaster response teams.
    Question. One integral part of the Corps work in preparing for the 
Red River Valley through flood mitigation is the Technical Resource 
Service which was authorized in the 1988 Water Resources Development 
Act. What level of funding would allow the Corps of Engineers to 
provide a full range of technical services for the development and 
implementation of state and local water resources initiatives within 
the Red River basin in North Dakota?
    General Fuhrman. Subject to the Administration's policy regarding 
capability amounts for individual projects and the need for offsetting 
reductions to maintain overall budgetary objectives, we could use 
$500,000 for the Red River Technical Resource Service to supplement 
local efforts in the planning, design and development of local flood 
control projects. The Service would help to develop a technical base 
and planning information from which local interests would evaluate 
their projects from a larger basin-wide perspective in order to develop 
cost effective and comprehensive basin-wide projects that would ensure 
the greatest benefit to the region.
                             missouri river
    Question. The Corps of Engineers is currently in the process of 
revising the Missouri River Master Manual. One concern for many 
residents of North Dakota is the unchecked siltation and erosion 
created by the construction of the Pick-Sloan plan. Others continue due 
to the requests of downstream navigation interests. What is the Corps 
doing to incorporate reasonable bank stabilization mechanism as well as 
to minimize impacts of navigation needs on upper basin states?
    General Fuhrman. Investigations being conducted for the Missouri 
River Master Water Control Manual Review and Update are limited to 
those necessary to determine if the current Water Control Plan used as 
a guide in the operation of the Missouri River Mainstem Reservoir 
System, or an alternative plan, best meets the contemporary needs of 
the basin. Structural solutions to bank erosion and siltation are not 
being pursued in the Review and Update.
    Regarding impacts of navigation, all significant impacts related to 
a potential change in the water control plan for the Mainstem System 
will be documented in a Revised Draft Environmental Impact Statement 
(EIS) scheduled for completion in May 1998.
    Question. What are the Corps' plans to incorporate reasonable dam 
releases to maintain the benefits of recreation, wildlife and power 
production to the upstream states?
    General Fuhrman. The Corps Missouri River Region Reservoir Control 
Center sets releases at the Main Stem Missouri River Dams in order to 
satisfy the congressionally authorized multiple purposes: flood 
control, water supply and water quality, recreation, navigation, 
irrigation, hydroelectric power, and fish and wildlife including 
endangered species. In order to help serve these project purposes, the 
original water control plan still in effect for the Master Manual was 
selected ensuring that adequate space in the system be reserved by 
March to store large flows originating in the upper basin and that the 
system would not be drawn down below permanent pool level throughout 
another drought similar to one experienced in the 1930's.
    Question. The Corps of Engineers is reducing the number of Division 
offices and proposes to move the Division that supervises the St. Paul 
District and the rest of the Mississippi River to Vicksburg, 
Mississippi. How will the reorganization of the Corps of Engineers 
impact customer service to communities in the Northern Great Plains?
    Mr. Lancaster. Under the former organization, the Mississippi River 
basin was managed by two division headquarters. The river south of St. 
Louis was under the management of the Lower Mississippi Valley 
Division, headquartered in Vicksburg, Mississippi. The northern basin 
was managed by the North Central Division, headquartered in Chicago. 
Under the reorganization, the entire Mississippi will now be managed by 
the Vicksburg headquarters, renamed as the Mississippi Valley Division.
    The Chief of Engineers and I envision no impact to customer service 
under this plan. Districts will continue to provide products and 
services to local communities as they always have. District functions, 
missions, personnel, and areas of responsibility, to include those in 
the St. Paul District, all remain as they were prior to the 
reorganization.
    On a regional basis, we believe the entire Mississippi valley will 
benefit from being managed by one headquarters that can balance and 
coordinate the various interests throughout the basin.
    Question. The Corps' restructuring plan shifts some roles from the 
Divisions to Districts. Divisions will concentrate on four functions: 
command and control, regional interface, program management, and 
quality assurance. Technical review is now performed at the Districts 
level and policy is a function of Headquarters in Washington, D.C. 
Describe your approach to the regional interface function in the Corps 
of Engineers?
    General Ballard. Regional interface is among the more important and 
most productive functions of a division headquarters. It is through 
such activities that groups with diverse interests are brought together 
to resolve issues and solve problems. Most interface with other 
agencies, sponsors, special interest groups, and the general public is 
carried out by our district offices and this will not change with 
restructuring. District roles in this regard are not changed. Divisions 
provide regional interface in dealing with issues or opportunities that 
exceed a single district's boundaries or in dealing with groups whose 
areas of interest cover more than one district. This process ensures a 
more reasoned and consistent approach to issue resolution. In any 
event, Divisions coordinate carefully and continually with Districts to 
assure everyone is involved and informed.
    Divisions interact with Federal and state agencies, Congressional 
leaders, regional interest groups and with regional and international 
commissions such as the Mississippi River Commission and the 
International Joint Commission. Additionally, Divisions manage and 
coordinate the Corps' response to regional and national emergencies; 
participate in development of regional agreements; coordinate and 
mediate regional interests, concerns and requirements; and assure Corps 
programs and capabilities are visible and understood through 
establishment and maintenance of contact with regional customers. The 
recent restructuring will enhance our ability to carry out this 
function because of the creation of Divisions that are more reflective 
of common water resources problems and opportunities. This will allow 
more effective and efficient integration of Federal, state, local, and 
private activities and will facilitate regional consideration of 
problems, solutions, and impacts.
                             buford-trenton
    Question. The Buford-Trenton Irrigation District is a 50-year-old 
irrigation project located at the upper end of Lake Sakakawea below the 
confluence of the Missouri and Yellowstone Rivers. Crops grown on this 
land include sugar beets, durum, alfalfa, and specialty crops. The 
project has a regional economic impact of more than $11 million. Ice 
jams have caused flooding and siltation has caused a rising water 
table. Structural solutions to these problems are not cost effective. 
Therefore, purchasing flood easements would compensate landowners. Last 
year, I worked with the Corps and local landowners to authorize $34 
million in the Water Resources Development Act for the purchase of 
flowage easement for the Buford-Trenton area. The Corps informs me that 
they will be able to move forward with the purchase of $5 million in 
easements in fiscal year 1998. If funds are appropriated for Buford-
Trenton, can I receive assurances that they be spent for intended 
purposes?
    Mr. Lancaster. Section 336(a) of WRDA 1996 authorizes the Corps to 
acquire flowage and saturation easements. The Corps headquarters is 
currently reviewing the Real Estate Design Memorandum. If added to the 
fiscal year 1998 budget, $5 million in easements at Buford-Trenton 
Irrigation District, North Dakota, is a realistic estimate. Should the 
Congress chose to appropriate funds, they will be used to proceed with 
the acquisition of easements.
                       devils lake, north dakota
    Question. The elevation of Devils Lake has been rising and the lake 
has been expanding since 1940. Because Devils Lake is an enclosed 
basin, there is no way for water to exit the lake except by 
evaporation. The effects of an expanding Devils Lake are dramatic. 
Infrastructure such as roads and sewage treatment facilities, that were 
as much as 8 miles from the lake are now inundated. Flooding in the 
Devils Lake basin has resulted in presidential disaster declarations 
the past four years.
    The worst flood in 150 years is predicted this spring. Catastrophic 
damage is anticipated. The National Weather Service now predicts that 
Devils Lake will rise another 6 feet to an elevation of 1,444 feet msl. 
While short-term mitigation efforts are underway, a long-term solution 
is necessary to save the City of Devils Lake and the surrounding 
region. An appropriation of $1.1 million has been requested for the 
stabilization feasibility study by the Corps of Engineers. I fully 
support that request. In the fiscal year 1997 emergency supplemental, 
the President requested a total of $32.5 million. Can you please 
describe why this is cost effective and is an emergency need, how the 
outlet fits into your comprehensive strategy, and how the Corps will 
address downstream and environmental concerns?
    General Fuhrman. The rapidly rising lake level at Devils Lake has 
caused extensive damages in the basin and led to requests for emergency 
assistance and a solution to the flooding problems. Because of the 
urgent nature of the problem and the need for an immediate solution, an 
expedited funding process is required. Potential damage estimates from 
forecasted lake level rises of another 6 and \1/2\ feet (from elevation 
1,437.5 to 1,444) are estimated to exceed an additional $140 million. 
Currently, the lake is rising at 0.1 feet per day and major decisions 
are being made concerning transportation and infrastructure that will 
already affect the basin, the Indian community, State, and region for 
many years to come. The outlet is not being proposed as the only action 
to solve the problems of flooding around Devils Lake. Other actions 
include relocations of low-lying structures around the lake which are 
taking place through the Flood Insurance Program; levee raises through 
Corps of Engineers emergency authorities to protect the city of Devils 
Lake; providing water storage in the upper basin to reduce the volume 
of flows reaching Devils Lake; and raising and protecting rural 
utilities around the lake. There is a comprehensive multi-agency effort 
to address the flood problems associated with the rising level of 
Devils Lake. The outlet is only one component; however, it is a key 
component that is necessary to take water out of the lake system at a 
controlled rate that will minimize any potential downstream impacts. 
Downstream environmental concerns will be addressed. Preliminary 
conclusions from a U.S.-Canada joint working group evaluation are that 
the risk of adverse impacts at the International Border from outlet-
related biota transfer is minimal. The outlet as proposed would meet 
applicable water quality standards. The outlet would not be operated 
when there is a potential threat of downstream flooding. One of the key 
constraints on outlet operation would be the Sheyenne River's channel 
capacity at the release point of the outlet into the Sheyenne. Channel 
capacity of the Sheyenne River increases as it goes downstream and the 
risk of any adverse effect on downstream flooding is minimal.
    Question. Will an appropriation of $1.1 million adequately fund the 
Corps' work on the Devils Lake Stabilization Feasibility Study in 
fiscal year 1998?
    General Fuhrman. Yes, in general, additional funding would not 
substantially speed up the process. Some elements of the feasibility 
study could be accelerated with unlimited funding; however, critical 
path items will continue to control the schedule. For example, 
collecting water quality samples takes time in order to provide a 
meaningful baseline. Likewise, the public scoping process will be a 
progressive consensus-building effort to establish concerns of tribal, 
downstream, and environmental interests. Currently, the feasibility 
study has been focusing on measures related to the rising lake level, 
i.e. the outlet, upper basin storage and water quality. Completion of 
the feasibility study also includes inlet-related aspects which have 
not been addressed. The inlet will likely be even more contentious as 
evidenced by Canada, Minnesota and environmental groups already 
associating the outlet with the Garrison project and biota transfer 
issues. Finally, the feasibility study was predicated on meeting the 
normal timeline for NEPA requirements. If the feasibility study and 
NEPA process were abbreviated, environmental interests would likely 
object on the same grounds that they are using with regards to the 
emergency outlet authorization.

                         conclusion of hearings

    Senator Byrd. The last word in the Bible is ``Amen.'' This 
subcommittee will recess in accordance with the wishes of the 
chairman, subject to the call of the Chair. Thank you very 
much.
    [Whereupon, at 11:40 a.m., Thursday, April 24, the hearings 
were concluded, and the subcommittee was recessed, to reconvene 
subject to the call of the Chair.]



    ENERGY AND WATER DEVELOPMENT APPROPRIATIONS FOR FISCAL YEAR 1998

                              ----------                              

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.

                       NONDEPARTMENTAL WITNESSES

    [Clerk's note.--At the direction of the subcommittee 
chairman, the following statements received by the subcommittee 
are made part of the hearing record on the Fiscal Year 1998 
Energy and Water Development Appropriations Act.]

             CALIFORNIA WATER RESOURCE DEVELOPMENT PROJECTS

  Prepared Statement of Daniel F. Kriege, Chairman, California Water 
                               Commission
    The California Water Commission is an official agency of the State 
of California. It is composed of nine representative citizens from 
throughout the State. The Commission is charged by statute with 
representing State of California and local interests before your 
Committee. The Commission is coordinating the filing of the statements 
of a number of State and local agencies. On behalf of the California 
Water Commission, I would like to express our sincere appreciation for 
the support this Committee has given California water, fishery and 
flood control appropriations over the years. I am privileged to submit 
to you the official recommendations of the State of California for 
fiscal year 1998 appropriations.
    The Commission would like you to know that it supports projects as 
shown on the attached document entitled, California Water Commission--
Final Recommendations for fiscal year 1998 Federal Appropriations for 
California Water, Fishery and Flood Control Projects, March 7, 1997, 
That document contains recommendations adopted by the Commission on 
March 7, 1997.
    Special Recommendations for Funds.--The Commission also recommends 
funds be appropriated for projects of the U.S. Army Corps of Engineers, 
U.S. Bureau of Reclamation and U.S. Fish and Wildlife Service as shown 
in the following table. The Commission feels that these are projects 
merit special consideration and provides additional information on 
those projects following the table.


------------------------------------------------------------------------
                                                             CWC Final  
 CWC                                        Presidents    recommendation
 No.           Project and county          budget fiscal    fiscal year 
                                             year 1998         1998     
------------------------------------------------------------------------
        U.S. ARMY CORPS OF ENGINEERS                                    
                                                                        
  100 CALFED/S.F. Bay-Delta (Also see   ..............        $400,000  
       CWC 500)                                                         
  112 Sacramento River Watershed              $400,000       1,100,000  
       Management Study                                                 
  128 San Joaquin River Watershed       ..............       1,200,000  
       Management Study                                                 
  304 Sacramento River Flood Control    ..............  ..............  
       Project                                                          
 304A Mid-Valley Area Levee                  3,100,000       5,600,000  
       Reconstruction                                                   
 304B Marysville/Yuba City Levee             7,300,000       9,300,000  
       Reconstruction                                                   
 304C Upper Sacramento Area Levee              200,000       2,700,000  
       Reconstruction                                                   
 304D Lower Sacramento Area Levee              300,000       2,000,000  
       Reconstruction                                                   
  352 Wildcat and San Pablo Creeks      ..............       1,353,000  
  381 Los Angeles County Drainage Area      11,700,000      40,000,000  
       Project                                                          
  387 Norco Bluffs Bank Stabilization,  ..............       1,500,000  
       Santa Ana River                                                  
  400 WRDA, 1996, Section 205, Flood        32,400,000         ( \1\ )  
       Damage Prevention Continuing                                     
       Authorities Program Nationwide                                   
  410 WRDA, 1996, Section 206, Aquatic   \2\ 2,000,000         ( \1\ )  
       Ecosystem Restoration                                            
  420 WRDA, 1996, Section 503,                 ( \2\ )         ( \1\ )  
       Watershed Management,                                            
       Restoration and Development                                      
       ($15 million allocated for                                       
       length of program)                                               
  430 WRDA, 1986, Section 1135,         \2\ 21,175,000         ( \1\ )  
       Project Modifications for                                        
       Improvement of the Environment                                   
                                                                        
         U.S. BUREAU OF RECLAMATION                                     
                                                                        
  500 CALFED S.F. Bay-Delta Program        143,300,000     143,300,000  
       (Also see CWC 100)                                               
 612A Coleman National Fish Hatchery         5,773,000       5,773,000  
       Modification (Includes                                           
       $3,773,000 Restoration Fund                                      
       monies)                                                          
 612B Buckhorn Fish Hatchery (Shasta)   ..............         450,000  
  621 Winter-Run Chinook Salmon         ..............         750,000  
       Captive Broodstock Program                                       
       (USBR--$241,000; Restoration                                     
       Fund--$259,000; NOAA--$250,000)                                  
  646 Rock Slough Fish Screen (Contra          250,000       2,500,000  
       Costa)                                                           
  688 Anadromous Fish Screening              5,000,000       8,000,000  
       Program (Includes $2,000,000                                     
       Restoration Fund monies)                                         
  635 Auburn-Folsom South Unit               1,538,000      11,538,000  
 660A Arroyo Pasajero                          190,000         390,000  
  701 Central Valley Project                70,611,000      73,611,000  
       Operations and Maintenance                                       
       (includes CVPIA)                                                 
  900 Water Recycling Projects--Public      53,204,000         ( \3\ )  
       Law 102-575, Title XVI/Public                                    
       Law 104-266                                                      
 1108 Salton Sea Area Study                    400,000         400,000  
------------------------------------------------------------------------
      \1\ Support.                                                      
      \2\ Nationwide.                                                   
      \3\ Various.                                                      

                      u.s. army corps of engineers
    CWC 100--CALFED/S.F. Bay-Delta Process (Also see CWC 500).--The 
CALFED Bay-Delta Program is a cooperative effort among State and 
Federal agencies and the general public to ensure a healthy ecosystem, 
reliable water supplies, good water quality, and stable levees in 
California's Bay-Delta. The Corps of Engineers will be formally joining 
the CALFED program in the near future. The California Water Commission 
recommends a fiscal year 1998 appropriation of $400,000 to allow Corps 
planning and environmental experts to officially participate in the 
CALFED activities
    CWC 112--Sacramento River Watershed Management Study.--The levee 
failures and devastating floods resulting from the January 1997 storms 
indicate that the Sacramento River Flood Control System together with 
the Sacramento River Bank Protection Project need to be improved. The 
Sacramento River Watershed Management Study would provide a long range 
management program for the Sacramento River. The objective of this 
study is to improve the overall flood protection for areas in the 
Sacramento River Basin while allowing for restoration and protection of 
environmental features including wetlands, fish and wildlife habitat 
restoration and water quality improvements. Reducing the need for 
perpetual bank protection by reconfiguring the existing system would 
have significant flood control and environmental benefits.
    The study area includes the entire Sacramento River Drainage basin 
in Northern California area including the Sacramento River Flood 
Control Project and the Sacramento River Bank Protection Project. The 
project provides flood protection to most of the metropolitan areas 
located in the greater Sacramento Valley, including the State Capital 
in Sacramento. This area would clearly benefit from a comprehensive 
planning effort. Once completed, this study will provide a framework 
for a management plan that can be effectively implemented and supported 
by local, State and federal agencies.
    The California State Reclamation Board has expressed its support 
for the study in October 1996 and is willing to participate in the 
feasibility phase of the study by funding 50 percent of the $8,000,000 
study. The Feasibility Cost Sharing Agreement is scheduled to be signed 
in January 1998. The feasibility study is scheduled for completion in 
January 2002. The Corps of Engineers is currently working on the 
reconnaissance phase of the study and is scheduled to complete this 
phase in January 1998.
    The California Water Commission supports a fiscal year 1998 
appropriation of $1,100,000 to initiate the Sacramento River Watershed 
Management Study.
    CWC 128--San Joaquin River Watershed Management Study.--The 
devastating flooding and levee failures resulting from the 1997 storms 
indicate the need for increased flood protection on the Lower San 
Joaquin River Flood Control Project and the San Joaquin River Levee 
project. The San Joaquin River Watershed Management Study will develop 
the framework for a comprehensive, multi-objective plan for 
strengthening the existing flood control system in harmony with 
managing water and environmental resource activities.
    The study area includes the San Joaquin River from its headwaters 
above Friant Dam to the Sacramento-San Joaquin Delta and the Kings 
River a tributary during the flood season to the San Joaquin River. 
This area includes nine counties and four major communities including 
Stockton, Modesto, Merced, and Fresno. This area would clearly benefit 
from a comprehensive planning effort. The study will identify 
objectives for managing the flood control project and assist in the 
coordination of all activities related to flood management, including 
environmental, recreational, economic, and water resources issues.
    The California State Reclamation Board has expressed its support 
for the study and is willing to participate in the feasibility phase of 
the study by funding 50 percent of the $9,000,000 study. The complete 
study including the reconnaissance and feasibility phases will take 
three years to complete.
    The California Water Commission supports an fiscal year 1998 
appropriation of $1,200,000 to initiate the San Joaquin River Watershed 
Management Study.
    CWC 304--Sacramento River Flood Control Project--(Flood Control 
Evaluation).--Following the record high flows of February 1986, 
Operations and Maintenance funds were provided under Inspection of 
Completed Works to perform an evaluation of the integrity of the 
Sacramento River Flood Control System. A five phase program which 
divided the system into five study areas was developed. In each phase, 
the structural stability of the levees is examined and a determination 
made as to whether the system is functioning at its design level. The 
results of each study phase are submitted as an Initial Appraisal 
Report (IAR).
    The first phase was the Sacramento area levees. This phase 
consisted of slurry walls within the levee section and landside berms 
which were constructed and performed well during the January 1997 
flood. The second phase is the Marysville/Yuba City area. Part of this 
work was completed in 1996. Other work was scheduled for 1997; 
unfortunately, the levee failed in January 1997 exactly where work was 
scheduled to be done.
    In order to accelerate the levee reconstruction work in the 
remaining areas of the overall system (Phase II-V), the California 
Water Commission is requesting additional funding for each of those 
phases as indicted above
    CWC 352--Wildcat and San Pablo Creeks.--The project is located on 
the east side of San Francisco Bay in the vicinity of San Pablo and 
Richmond, Contra Costa County, California, about 20 miles northeast of 
San Francisco. The Reach 1 portion of the project consists of 9,900 
lineal feet of channel and levee work on Wildcat Creek and 10,000 
lineal feet of channel and levee work on San Pablo Creek. Improvements 
include open, concrete, rock, and earth channels and levees, culverts 
and a sediment basin. Additionally, about 20 acres will be planted for 
mitigation of fish and wildlife impacts.
    No funds were budgeted in fiscal year 1997. Carryover funds are 
being used to fund remaining construction contract payments, project 
audit and close-out activities for flood control features, and initial 
reimbursement to the sponsor for 50-50 cost sharing of Phase 2 
recreation contract costs in accordance with the LCA. No funds are 
budgeted in fiscal year 1998. The Commission supports funding of 
$1,353,000 to be used for remaining reimbursement to the sponsor for 
the Phase 2 recreational contract
    CWC 381--Los Angeles County Drainage Area Project.--The project 
covers a 2,000 square-mile area within the county of Los Angeles and 
includes portions of the metropolitan region of the city of Los 
Angeles. The project consists of upgrading the existing system, raising 
and converting channel walls of the Rio Hondo and lower Los Angeles 
River channels, and modifying bridges.
    The February-March 1980 floods exceeded the capacity of the channel 
in the upper reaches of the Los Angeles River and nearly overtopped the 
levee in the lower LA River. A breach in the levee could have induced 
catastrophic damages to residential, commercial, and industrial 
properties in Long Beach. Studies to date indicate that a 100-year 
flood would impact 52,000 acres, with damages totaling about $2.35 
billion. Portions of the existing system cannot contain a 50-year flood 
event. Average annual benefits, at October 1991 price levels, are 
$58,616,000, all flood control.
    The LACDA Project was authorized by Congress in 1992 and received a 
Record of Decision to proceed from the Assistant Secretary of the Army 
in 1995. It is scheduled to be constructed in several phases over the 
next five years at a total cost of approximately $260 million. The 
first construction contract was awarded in fiscal year 1995.
    Design is underway and the Commission supports expenditure of $40 
million in fiscal year 1998 to accelerate construction.
    CWC 387--Norco Bluffs Bank Stabilization, Santa Ana River.--The 
study area is located approximately 40 miles southeast of Los Angeles 
in the City of Norco along the south bank of the Santa Ana River. Flood 
induced migration of the main channel of the Santa Ana River to base of 
the bluffs has resulted in undercutting and subsequent bank 
destabilization which threatens residential development along the edge 
of the bluffs.
    The Riverside County Flood Control and Water Conservation District 
supplied the following information in a August 30, 1996, letter on this 
new request: ``This is a project to protect a susceptible 65-foot high 
bluff in Norco from further retreat into a developed residential 
neighborhood which results when flood flows occur in the Santa Ana 
River. The completed feasibility report for this project was submitted 
for Washington level review. General Genega, Directorate of Civil 
Works, made a commitment to have a Chief's Report for the study by the 
end of December 1996.
    The Chief's report was completed on time and the project has been 
authorized for construction by language in the Water Resources 
Development Act of 1996. The Commission supports an fiscal year 1998 
appropriation of $1.5. million to complete plans and specifications and 
initiate construction of the Norco Bluffs Bank Stabilization project.
    CWC 400--WRDA, 1996, Section 205, Flood Damage Prevention.--The 
California Water Commission heard testimony at its March 7, 1997 
meeting requesting support on six individual projects (See Page 5 of 
Exhibit A for individual projects). Each of these projects have merit 
and are needed to prevent recurring flood damages in the local areas. 
The Commission supports these projects for funding from this Continuing 
Authority for small projects.
    CWC 410--WRDA, 1996, Section 206, Aquatic Ecosystem Restoration and 
Protection.--The California Water Commission heard testimony at its 
March 7, 1997 meeting requesting support on three individual projects 
(See Page 5 of Exhibit A for individual projects). The Commission 
supports these projects to improve the quality of the environment. 
Section 206 directs the Secretary of the Army to carry out such project 
if the Secretary determines that the project will improve the quality 
of the environment and is in the public interest; and is cost-
effective. The cost-sharing provisions state that the non-Federal 
interests shall provide 35 percent of the cost of the construction of 
any project carried out under this section, including provision of all 
lands, easements, rights-of-way, and necessary relocation. Construction 
of a project under this section shall be initiated only after a non-
Federal interest has entered into a binding agreement with the 
Secretary to pay the non-Federal share of the costs of construction 
required by this section and to pay 100 percent of any operation, 
maintenance, and replacement and rehabilitation costs with respect to 
the project in accordance with regulations prescribed by the Secretary. 
There is a $5 million cap for Federal funds to be allotted under this 
section for a project at any single location.
    CWC 420--WRDA, 1996, Section 503, Watershed Management, Restoration 
and Development.--The California Water Commission heard testimony at 
its March 7, 1997 meeting requesting support on three individual 
projects (See Page 5 of Exhibit A for individual projects). The 
Commission supports fiscal year 1998 appropriations for the three 
projects. This provision gives the Secretary of the Army the authority 
to have the Corps provide technical, planning and design assistance to 
non-Federal interests for carrying out watershed management, 
restoration and development projects at locations listed in Section 
503, WRDA 1996.
    CWC 430--WRDA, 1986, Section 1135, Project Modifications.--The 
California Water Commission heard testimony at its March 7, 1997 
meeting requesting support on eight individual projects (See Page 6 of 
Exhibit A for individual projects). The Commission supports fiscal year 
1998 appropriations for each of these projects. Section 1135 of WRDA of 
1986 directs the Secretary of the Army to review the operation of water 
resources projects constructed before the date of the Act to determine 
the need for modifications in the structures and operations of such 
projects for the purpose of improving the quality of the environment in 
the public interest.
    500--CALFED S.F. Bay-Delta Program (Also see CWC 100).--The CALFED 
Bay-Delta Program is a cooperative effort among State and Federal 
agencies and the general public to ensure a healthy ecosystem, reliable 
water supplies, good water quality, and stable levees in California's 
Bay-Delta. The President's fiscal year 1998 Budget, contains $143 
million to be spent specifically in pursuit of CALFED objectives. This 
money is appropriated to the U.S. Bureau of Reclamation to hold for the 
participating CALFED agencies as spending decisions are made.
    California voters approved the $995 million Proposition 204 on the 
November 1996 ballot. This general obligation bond measure provides 
$390 million for the Bay-Delta Ecosystem Restoration Program.
    During Phase I, from June 1995 through August 1996, the Program 
identified these problems, developed a mission statement and several 
guiding principles, and designed three alternative solutions. In Phase 
II, from June 1996 to September 1998, the Program will conduct a broad-
based environmental review of the three alternative solutions will 
identify the one preferred alternative. During Phase III, starting in 
late 1998 or early 1999 and lasting for many years, the preferred 
alternative will be implemented in stages.
    The California Water Commission strongly supports an fiscal year 
1998 federal appropriation of $143,300,000, which is in the President's 
fiscal year 1998 budget.
    CWC 612A--Coleman National Fish Hatchery Modification.--The Coleman 
National Fish Hatchery was built by the U.S. Bureau of Reclamation 
(USBR) on Battle Creek in 1942 to mitigate damages to salmon spawning 
areas in the Sacramento River system caused by the construction of 
Shasta and Keswick Dams. Federal custody and operation were transferred 
to the U.S. Fish and Wildlife Service (USFWS) in 1948. Title 34 of 
Public Law 102-575 (Central Valley Project Improvement Act) specifies 
that USBR provide funding for completion of the rehabilitation of the 
Coleman National Fish Hatchery: 50 percent will be reimbursable from 
water and power users and 50 percent non-reimbursable.
    Facilities remaining to be completed are additional water treatment 
facilities, estimated at $6,763,000; and replacement of facilities for 
administration, the fish health laboratory and public contact area, 
estimated to cost $2,100,000.
    In addition to USFWS's allocated operational costs at Coleman 
National Fish Hatchery, the California Water Commission supports the 
$5,773,000 contained in the President's fiscal year 1998 Budget for 
completion of the water treatment facilities.
    CWC 612B--Buckhorn Fish Hatchery.--The Winter-run Chinook salmon 
(WCS), a Federal and State protected endangered species, are currently 
being propagated at Coleman National Fish Hatchery, which is located on 
Battle Creek. The purpose of rearing WCS is to supplement the depleted 
wild population in the upper Sacramento River and not establish a 
salmon-run to the hatchery. Despite release strategies designed to 
promote homing to the mainstem Sacramento River, the Hatchery origin 
WCS have apparently imprinted on Battle Creek and are returning to 
Coleman NFH. USFWS recognized the imprinting problem.
    The relocation of the primary rearing site of the WCS from Coleman 
NFH on Battle Creek to Buckhorn hatchery on the upper Sacramento River 
near Anderson will be a significant benefit to the recovery of this 
species. By rearing the winter-run Chinook salmon at the Buckhorn 
facility, imprinting to the upper Sacramento River Basin will be 
insured. Therefore, when they return as adults, they will be returning 
to an area where the wild population is currently spawning.
    The California Water Commission supports an fiscal year 1998 
Federal appropriation of $450,000 for the rehabilitation of the 
Buckhorn Fish Hatchery in the recovery efforts of the winter-run 
Chinook salmon.
    CWC 621--Winter-Run Chinook Salmon Captive Broodstock Program.--
Rearing facilities at Bodega Marine Laboratory and Steinhart Aquarium 
were designed and constructed around the 1991 year class of juveniles, 
which was delivered in September 1992. Presently, the combined rearing 
facilities of both institutions are holding four year classes. 
Offspring from the spawning of wild-caught broodstock at USFWS's 
Coleman National Fish Hatchery can now be smolted and delivered to the 
broodstock rearing facilities with minimal mortality. The program has 
demonstrated the feasibility of rearing juvenile chinook salmon to 
maturity and obtaining gametes for artificial propagation. With further 
improvements in broodstock nutrition and fish health, it is expected 
that this program can produce gametes of known genetic background to 
supplement U.S. Fish and Wildlife Service's artificial propagation 
effort as needed to protect the race.
    The captive broodstock program has required and has provided 
substantial scientific and technical advances in the husbandry, 
pathology, and genetics of chinook salmon.
    The program has promoted the genetic conservation of winter-run 
chinook salmon. Analyses of the effective size of the winter-run stock 
showed that a properly managed artificial propagation program to which 
the captive broodstock program contributes gametes is not likely to 
have a negative effect and may, instead, be helping to maintain or 
possibly increase slightly the genetic diversity of the stock.
    The captive broodstock program was initiated as a rapid response to 
the endangerment of the Sacramento River winter-run chinook salmon. To 
date, the program has realized many of its objectives. Gametes from 
captively reared broodstock have contributed to artificial propagation 
of the winter-run population; however, gamete quality must be improved 
to ensure successful production of offspring.
    The California Water Commission supports an fiscal year 1998 
appropriation of $750,000 from three sources (USBR--$241,000; CVPIA 
Restoration Fund--$259,000; and NOAA--$250,000).
    CWC 646--Rock Slough Fish Screen.--The California Water Commission 
supports an appropriation of $2.5 million for construction of the 
Contra Costa Canal Rock Slough Fish Screen. The proposed Rock Slough 
fish screen is a requirement of Section 3406(b) of Public Law 102-575, 
the Central Valley Project Improvement Act (CVPIA). The project will 
screen the diversion for the Contra Costa Canal, the principal intake 
facility for the Contra Costa Water District.
    Congressman George Miller has expressed his support for this 
funding in a letter to Secretary of Interior Bruce Babbitt dated 
December 19, 1996. As Congressman Miller explains, the Bureau of 
Reclamation has determined that the project requires $2.5 million in 
fiscal year 1998. This level of funding will permit the completion of 
design and will allow construction to begin on this important project, 
which has already fallen behind schedule and could cause CCWD to run 
afoul of compliance deadlines for the Endangered Species Act. This 
would jeopardize the ability of CCWD to deliver its contractual water 
supply to over 400,000 people in central and east Contra Costa County.
    Congress appropriated funds in fiscal year 1996 ($80,000) and 
fiscal year 1997 ($500,000) for this project, meeting the initial 
commitment of both the Administration and Congress to this project. 
Full funding in fiscal year 1998 is essential to keep this project 
moving forward. In November, California voters approved Proposition 
204, which provides funds for the required 25 percent state of 
California match for the federal funding for Rock Slough screening.
    CWC 688--Anadromous Fish Screening Program.--Section 3406(b)(21) of 
the Central Valley Project Improvement Act (CVPIA) directs the 
Secretary of the Interior to assist the State of California in 
developing and implementing measures to avoid losses of juvenile 
anadromous fish resulting from unscreened or inadequately screened 
diversions on the Sacramento and San Joaquin Rivers, their tributaries, 
the Sacramento-San Joaquin Delta, and the Suisun Marsh. Measures may 
include, but are not limited to, construction of screens on unscreened 
diversions, rehabilitation of existing screens, replacement of existing 
non-functioning screens, and relocation of diversions to less fishery-
sensitive areas. The Secretary is authorized to cost-share up to 50 
percent with the State on measures under this program. The State's 
share in screening diversions may include contributions from local 
agencies and other non-Federal entities.
    A recent National Marine Fishery Service proposed Endangered 
Species Act rulemaking on screening Sacramento River diversions to 
protect endangered winter-run salmon has highlighted the need to 
accelerate implementation of screening efforts. Both DWR and USBR have 
been participating in test programs to evaluate the effectiveness of 
different screen designs, including acoustical technologies. DFG has 
developed a set of policies and criteria for fish screen installation, 
and is preparing an inventory of diversions and a priority listing of 
sites to be remediated. There are over 1800 unscreened diversions in 
the Delta alone.
    This program is eligible for State cost-sharing funding from 
Proposition 204. The CALFED Bay-Delta Program has identified a number 
of screening projects which could be implemented under this program
    CWC 635--Auburn-Folsom South Unit.--The Commission heard testimony 
from the Placer County Water Agency (PCWA) on March 7, 1997 and 
supported that Agency's need to have a reliable year-round access to 
their American River water entitlements by pumping from the North Fork 
American River at Auburn. The proposal has the potential to save the 
Federal Government money and not be detrimental for future support of a 
multi-purpose Auburn Dam project.
    PCWA completed construction of a pump station in the 1960s to 
deliver water to its 3-mile long tunnel to supply water from the North 
Fork American River to customers in Placer County for municipal, 
industrial and agricultural needs.
    Conditions have changed relevant to the Auburn Dam and for the last 
several years, USBR has been installing, removing and reinstalling a 
temporary replacement pump station at a minimum cost of $250,000 per 
year. This year, there was a flood of record in the American River, 
resulting in tremendous movement of the riverbed and nearly total 
destruction of temporary pump station components and access road. 
Reinstallation of just the temporary pump for 1997 will cost the 
Federal Government approximately $1 million.
    The California Water Commission supports an fiscal year 1998 
appropriation of 11,538,000 for this project.
    CWC 660A--Arroyo Pasajero.--In the 1960's, in cooperation with the 
California Department of Water Resources (DWR), the U.S. Bureau of 
Reclamation (USBR) designed and constructed a 100-mile long reach of 
the California Aqueduct called the San Luis Canal to convey municipal 
and agricultural water to California water users. The San Luis Canal is 
part of the joint-use facilities'' along the west side of the San 
Joaquin Valley, which are operated by DWR. Design, construction, 
operation and maintenance costs for this project are shared (DWR 55 
percent and USBR 45 percent).
    The Canal crosses an alluvial fan deposited from a natural drainage 
channel called Arroyo Pasajero. By original design, these flows were to 
be temporarily stored in a ponding basin upstream on the western side 
of the Canal and periodically discharged into the Canal through twelve 
inlet gates. Operational experience shows that floodflow volume and 
sediment load are much greater and more threatening to the Canal than 
designers had originally anticipated.
    At present, DWR and the Corps are about one year away from 
completion of the Feasibility Study which will identify a long-term 
flood protection plan for the Arroyo. The Corps, DWR and USBR are all 
participating in the cost of the study. If a Federal interest is 
identified by the feasibility study, the Corps will participate in the 
selected solution to Arroyo Pasajero flooding problems.
    The California Water Commission strongly supports an appropriation 
of $390,000 for the U.S. Bureau of Reclamation and supports the funding 
level in the President Budget for the U.S. Army Corps of Engineers to 
continue the study
    CWC 701--Central Valley Project Operations and Maintenance 
(includes CVPIA).--The Nation's public works infrastructure is aging. 
We must ensure that adequate levels of funding are provided to protect 
the public's investment in facilities which we rely upon daily to 
provide water supply, flood protection, public safety, and other 
benefits. California's population of 32 million people depends upon a 
network of local, state, and federal infrastructure developed over the 
past decades. Today, governments at all levels are finding it 
increasingly difficult to find funds to properly maintain existing 
facilities. The competition for funding raises important public policy 
questions about the relationship of funding for new projects and 
programs as opposed to funding to maintain and rehabilitate existing 
infrastructure.
    Too often, the temporary solution used by all levels of government 
to meet budgetary constraints is to defer maintenance funding. However, 
deferred maintenance does not come without a price.
    Given the increasing competition for federal dollars, we must be 
prepared to make the difficult choice of deferring studies and new 
projects until we are assured that existing federal facilities are 
receiving appropriate levels of safety review and maintenance.
    Agreements are being negotiated with non-Federal agencies that may 
reduce USBR's budget; however, until those agreements are in place, 
USBR needs an additional $3 million above the $70,611,000 in the 
President's fiscal year 1998 Budget to be adequately funded to meet its 
Operations and Maintenance responsibilities.
    The California Water Commission strongly supports an fiscal year 
1998 appropriation of $73,611,000 for the U.S. Bureau of Reclamation to 
meet the projected Operations and Maintenance costs.
    CWC 900--Recycled Water Projects.--The California Water Commission 
has long recognized water recycling as an important element in the 
management of California's water resources, both for cleanup of 
municipal, industrial and agricultural discharges and to improve the 
quantity and quality of water supplies. Following extensive hearings 
throughout the State, the Commission endorsed Department of Water 
Resources Bulletin 160-93, California Water Plan Update, October 1994, 
which includes a provision that nearly one million acre-feet of 
recycled water be added to California's annual water supply by the year 
2020.
    It is the Commission's view that both water recycling programs and 
the other ongoing USBR programs are highly important and that they 
should be supported in concert, within the limitations of available 
federal funds, giving due consideration to other potential sources of 
funds that could be available to effect their implementation
    CWC 1108--Salton Sea Study.--The Salton Sea is the largest lake in 
California and is a regionally important feature from both 
environmental and economic standpoints. It is located in the 
southeastern corner of the State within the geologic feature known as 
the Salton Basin, a natural basin located approximately 278 feet below 
mean Sea level (-278 feet msl). The Salton Sea receives drainage from 
approximately 8,000 square miles of Riverside, Imperial and San Diego 
Counties and the Republic of Mexico. It is a closed basin thus water 
only leaves the Sea via evaporation. Inflow to the Sea consists of 
agricultural drainage, storm water and wastewater, and is generally in 
hydrologic balance with evaporative losses. The closed nature of the 
system has resulted in changes in the salinity and water surface 
elevation of the Sea over time.
    In 1993, the Counties of Riverside and Imperial, Imperial 
Irrigation District (IID), and Coachella Valley Water District (CVWD) 
entered into a Joint Powers Agreement, creating a public agency known 
as the Salton Sea Authority. The Authority directs and coordinates 
actions relating to improvement of water quality, stabilization of 
water elevation, enhancement of recreational and economic development 
potential of the Sea, and other beneficial uses, in addition to 
recognizing the importance of the Salton Sea to the agricultural 
economy in the two counties.
    USBR will be finishing the Appraisal Report in 1997. The needed 
funding for fiscal year 1998 is to begin the Feasibility Report EIR/
EIS. The project will be cost-shared using Proposition 204 and local 
funds.
    The Commission supports the $400,000 in the President's fiscal year 
1998 Budget for this study.
[GRAPHIC] [TIFF OMITTED] TCORPS.005

[GRAPHIC] [TIFF OMITTED] TCORPS.006

[GRAPHIC] [TIFF OMITTED] TCORPS.007

[GRAPHIC] [TIFF OMITTED] TCORPS.008

[GRAPHIC] [TIFF OMITTED] TCORPS.009

[GRAPHIC] [TIFF OMITTED] TCORPS.010

[GRAPHIC] [TIFF OMITTED] TCORPS.011

[GRAPHIC] [TIFF OMITTED] TCORPS.012

                                 ______
                                 
   Prepared Statement of Frank Dal Gallo, President, Raymond Barsch, 
General Manager, the Reclamation Board, the Resources Agency, State of 
                               California

   THE RECLAMATION BOARD FINAL RECOMMENDATIONS FOR U.S. ARMY CORPS OF   
       ENGINEERS FLOOD CONTROL PROJECTS--FISCAL YEAR 1998 SUMMARY       
------------------------------------------------------------------------
                                       President's                      
                                     Fiscal Year 1998   Board Recommends
                                          Budget                        
------------------------------------------------------------------------
General Investigations--Surveys:                                        
    Northern California Streams:                                        
        Tehama-Hamilton City Flood                                      
         Control [205 Project] \1\  .................            ( \2\ )
        Yuba River Basin..........           $325,000           $325,000
        Sacramento River Watershed                                      
         Management Study.........            400,000          1,100,000
        Middle Creek (Lake) [1135                                       
         Project] \3\.............            350,000            350,000
        Sacramento River Riparian                                       
         Revegetation [1135                                             
         Project] \3\.............            300,000            300,000
    Sacramento-San Joaquin Delta:                                       
        South Sacramento County                                         
         Streams..................            180,000            180,000
        Sacramento-San Joaquin                                          
         Delta Investigation......            750,000            750,000
        Western Delta Islands                                           
         (Contra Costa,                                                 
         Sacramento)..............            300,000            300,000
    San Joaquin River Basin:                                            
        Stockton Metropolitan Area            450,000            450,000
        San Joaquin River                                               
         Watershed Management                                           
         Study....................  .................          1,200,000
        Arroyo Pasajero (Fresno)..          1,146,000          1,146,000
        Tule River................            250,000            250,000
    Preconstruction Engineering                                         
     and Design:                                                        
        American River Watershed..            401,000            401,000
        Kaweah River (Tulare).....          1,100,000          1,100,000
        Winters and Vicinity                                            
         (Yolo) [205 Project] \1\.  .................            ( \2\ )
Construction--General:                                                  
    Sacramento River at Glenn-                                          
     Colusa Irrigation District...            600,000            600,000
    Sacramento River Bank                                               
     Protection...................          5,500,000          5,500,000
    Sacramento River--Levee                                             
     Reconstruction...............  .................  .................
    Phase II--Marysville/Yuba City          7,300,000          9,300,000
    Phase III--Mid-Valley.........          3,100,000          5,600,000
    Phase IV--Lower Sacramento....            300,000          2,000,000
    Phase V--Upper Sacramento.....            200,000          2,700,000
    American River (Common                                              
     Elements)....................         44,744,000         44,744,000
    Upper Sacramento River--Murphy                                      
     Slough [1135 Project] \3\....  .................            ( \2\ )
    Magpie Creek (Sacramento) [205                                      
     Project] \1\.................  .................            ( \2\ )
    Yolo Basin Wetlands (Davis                                          
     Site) [1135 Project] \3\.....  .................            ( \2\ )
    China Island Habitat                                                
     Restoration [1135 Project]                                         
     \3\..........................  .................            ( \2\ )
    Merced County Streams.........          1,100,000          1,100,000
    West Sacramento...............          7,500,000         7,500,000 
------------------------------------------------------------------------
\1\ The Board supports this project to be funded under the ``Continuing 
  Authorities'' Program (Section 205).                                  
\2\ Support.                                                            
\3\ To be funded under ``Project Modifications for Improvement of the   
  Environment'' Program (Section 1135).                                 

   recommendations of the state reclamation board for flood control 
    projects in the central valley of california (fiscal year 1998)
    The Reclamation Board, as the State agency which furnishes required 
local assurances for a majority of the federal flood control projects 
in California's Central Valley, respectfully submits this statement of 
support for the following projects, which the Board considers to be of 
particular importance to the health, safety, and well-being of Central 
Valley residents and important to be started and/or kept on schedule:
General Investigations Surveys
            Northern California Streams
    This survey, authorized in 1962, is a study of the Sacramento River 
and its tributaries in regard to flood control measures. The following 
are interim study proposals for funding in fiscal year 1998.
    Tehama-Hamilton City Flood Control (205 Project).--A reconnaissance 
level study is underway that is investigating flood damage reduction 
alternatives for two towns located on the west bank of the Sacramento 
River in Tehama and Glenn Counties. The town of Tehama was flooded in 
1986 and the levee protecting Hamilton City was saved by extensive 
sandbagging and flood fights during the floods of 1995 and 1997. The 
reconnaissance study will be completed in 1997 and a cost-shared 
feasibility investigation under Section 205 authority will begin in 
1998 pending availability of funds.
    The Board recommends funding the feasibility study under Section 
205 authority.
    Yuba River Basin.--The Yuba River Basin is located about 60 miles 
north of Sacramento. The 1986 and 1997 floods and resulting levee 
failures on the Yuba and Feather Rivers made evident that flooding is a 
public safety issue in the area. Thus, a reconnaissance level study of 
alternatives for flood control and related purposes in the Yuba River 
watershed was completed, and a cost-shared feasibility study was 
initiated.
    The Board recommends funding of $325,000 for completion of the 
feasibility study and initiation of Preconstruction Engineering and 
Design.
    Sacramento River Watershed Management Study.--The levee failures 
and devastating floods resulting from the January 1997 Central Valley 
storms indicate that the Sacramento River Flood Control Project needs 
to be improved. The Sacramento River Watershed Management Study would 
provide a long range management program for the Sacramento River. The 
objective of this study is to improve the overall flood protection for 
areas within the Sacramento River Basin while allowing for restoration 
and protection of environmental features including wetlands, fish and 
wildlife habitat restoration and water quality improvements.
    The Board strongly recommends funding of $1.1 million for this 
cost-shared feasibility study.
    Middle Creek (Lake County).--The Middle Creek flood control project 
is located in Lake County near Clear Lake, approximately 80 miles north 
of San Francisco. The project consisting of levees, diversion 
structures and stream channelization was constructed by the Corps 
between 1958 and 1968. The project along with subsequent land use 
changes has resulted in the loss or damage of approximately 7,500 acres 
of emergent wetlands. A reconnaissance study was initiated in 1996 to 
study alternatives that would restore the natural functions of the 
Middle Creek/Clear Lake ecosystem. The study is currently in the 
reconnaissance phase.
    The Board recommends funding of $350,000 for continuing the 
investigation into the feasibility phase. The feasibility study will be 
cost-shared with a non-Federal sponsor.
    Sacramento River Riparian Revegetation.--This cost-shared 
feasibility study will examine the opportunities available to restore 
riparian habitat to enhance anadromous fisheries along the Sacramento 
River from Collinsville in the Delta to Verona located north of the 
City of Sacramento. The study will also examine restoration 
opportunities along Steamboat and Sutter Sloughs in the Lower 
Sacramento region. The study will examine the feasibility of 
restoration alternatives that do not compromise the structural or 
hydraulic integrity of the Sacramento River Flood Control Project.
    The Board recommends funding of $300,000 for this study.
            Sacramento-San Joaquin Delta
    South Sacramento County Streams.--These streams are located in the 
southerly portions of the City and County of Sacramento. The existing 
flood control projects in south Sacramento do not adequately address 
the flood issues in this rapidly developing area. Levees along Morrison 
Creek and tributaries provide less than a 100 year level of flood 
protection. The investigation also addresses the risk of flooding to 
the Sacramento Regional Wastewater Treatment Plant. Potential projects 
include a combination of channel and levee improvements and stormwater 
detention facilities.
    The Board recommends funding of $180,000 to continue this cost-
shared feasibility study.
    Sacramento-San Joaquin Delta Investigation.--The study area is 
located in Sacramento, Yolo, San Joaquin, Contra Costa, and Solano 
Counties and extends from the southern limits of the City of Sacramento 
to the City of Tracy, and from the City of Stockton west to Suisun Bay. 
The area consists of about 700,000 acres of land segregated into some 
100 tracts and islands, bounded by interconnecting waterways, which are 
confined by 1,100 miles of levees. A critical need for levee 
rehabilitation throughout the Delta exists. The most recent levee 
failures in the study area in February 1986 and January 1997, which 
caused damages estimated at over $20 million.
    The study is developing a region-wide plan for Corps involvement in 
the Delta that links with the planning efforts of other agencies and 
includes flood control, environmental restoration, and navigation.
    The Board supports funding of $750,000 to continue this cost-shared 
feasibility study.
    Western Delta Islands(Contra Costa and Sacramento Counties).--The 
study area includes Twichell Island, Jersey Island, and Webb Tract 
which comprise a total acreage of 12,500 acres located in the Western 
Delta area of Sacramento. The two islands and Webb Tract are at risk 
due to levee instability and levee failure could cause saltwater 
intrusion far into the Delta rendering the water unsuitable for 
agricultural and domestic uses. Levee failures could adversely affect 
existing fish and wildlife resources and habitat. The feasibility study 
will emphasize both flood damage reduction and environmental 
restoration.
    The Board recommends funding of $300,000 to continue the 
feasibility study.
            San Joaquin River Basin
    Stockton Metropolitan Area.--Studies by the Federal Emergency 
Management Agency have determined that a large portion of the City of 
Stockton has less than 100 year level of flood protection. The study 
area is located in the City of Stockton and surrounding area within 
portions of Calaveras, San Joaquin and Stanislaus Counties. The study 
area extends from the Calaveras River, Mormon Slough, and Bear Creek 
and tributaries north of Stockton to the Littlejohns Creek and 
Farmington areas southeast of Stockton. The reconnaissance study will 
determine if a federal flood control interest exists. The 
reconnaissance study is scheduled to be completed in 1997.
    The Board recommends funding of $450,000 to continue this study to 
the feasibility level. The feasibility study will be a cost-shared 
investigation.
    San Joaquin River Watershed Management Study.--The devastating 
flooding and levee failures resulting from the 1997 storms indicate the 
need for increased flood protection on the San Joaquin River Flood 
Control System. The San Joaquin River Watershed Management Study will 
develop the framework for a comprehensive, multi-objective plan for 
strengthening the existing flood control system in harmony with 
managing water and environmental resource activities. The study will 
identify objectives for managing the flood control project and assist 
in the coordination of all activities related to flood management, 
including environmental, recreational, economic, and water resources 
issues. The Reclamation Board has expressed its support for the study 
and is willing to participate in the feasibility phase of the study by 
funding 50 percent of the $9,000,000 study.
    The Board recommends funding of $1,200,000 to initiate the study.
    Arroyo Pasajero (Fresno County).--A feasibility study is underway 
for the Arroyo Pasajero watershed near Coalinga, California in 
Southwest Fresno County. Updated hydrologic and sediment transport 
studies show that both the estimated sediment loads and storm volumes 
are several times greater than the original design estimates. There are 
several public facilities in the floodplain including the California 
Aqueduct, Lemoore Naval Air Station, Interstate Highway 5, and Highway 
198. the lands east of the California Aqueduct are subject to flood 
damage as well as the Aqueduct.
    The Board recommends funding of $1,146,000 to continue the cost-
shared feasibility study.
    Tule River (Tulare County).--The study area is located within the 
12,500 square mile Tulare Lake Basin in the southeastern portion of the 
San Joaquin Valley north of the City of Bakersfield. In 1966 and 1983, 
Lake Success located on the Tule River upstream of the City of 
Porterville filled and excess flows flowed over the Success Dam 
spillway and caused significant downstream damages. An amended 
feasibility study which began in 1988 is currently underway which is 
investigating flood damage reduction alternatives which includes the 
raising of Success Dam.
    The Board recommends funding of $250,000 to continue the cost-
shared feasibility study.
Preconstruction Engineering and Design
    American River Watershed.--The Board and the Department of Water 
Resources acted as the nonFederal sponsor of the Feasibility Study and 
Supplemental Information Report on the American River Watershed which 
identified the Detention Dam Plan as the NED plan. The Reclamation 
Board and the SAFCA Board identified the Detention Dam as the locally 
preferred plan. However, the Final Chief of Engineers' Report 
recommended deferral of a decision regarding the Detention Dam feature 
of the NED plan and recommended proceeding with the element common to 
the final array of candidate plans. The Water Resources Development Act 
signed in October 1996 authorized $57.7 million for construction of the 
Common Features. A comprehensive flood control project is still needed 
to increase flood protection in Sacramento to a level commensurate with 
the degree and value of commercial, residential, and industrial 
development in the flood-risk area.
    The Board recommends funding of $401,000 to develop a comprehensive 
flood control plan for the American River Floodplain.
    Kaweah River (Tulare County).--The proposed project will provide 
additional water storage at Lake Kaweah (Terminus Dam) for increased 
flood protection and water supply, recreation and fish and wildlife 
enhancement.
    The Board recommends funding of $1,100,000 for preconstruction 
engineering and design.
    Winters and Vicinity (Yolo County).--The project area is in 
southwestern Yolo County approximately 30 miles west of Sacramento. The 
City of Winters is located along Putah Creek and Dry Creek and is 
bordered on the north by Moody Slough and Chickahominy Slough. Flooding 
in 1995 caused over $2 million in damages, the closure of major roads 
and the flooding of 45 residential properties. A cost-shared 
feasibility study was completed in 1997 and recommends a flood damage 
reduction plan that will provide the area with over a 100 year level of 
flood protection. The project is awaiting Section 205 funding.
    The Board supports funding for this Section 205 project.
Construction--General
    Sacramento River at Glenn-Colusa Irrigation District.--The project 
involves restoration of the hydraulic characteristics of the Sacramento 
River. The Corps is conducting the engineering and design of works to 
restore the elevation of the Sacramento River in the vicinity of the 
Glenn-Colusa Irrigation District intake to conditions existing prior to 
the flood of 1970 to complement fish screen remedial work being 
developed by the U.S. Bureau of Reclamation under the Central Valley 
Project Improvement Act.
    The Board recommends funding of $600,000 for initiating 
construction activities.
    Sacramento River Bank Protection.--The project, authorized in 1960, 
is a long range federal-State effort to preserve the existing project 
levee system of the Sacramento River. These existing levees offer flood 
protection along 192 miles of the Sacramento River and various 
tributaries between Collinsville in the Delta and Chico Landing on the 
Upper Sacramento River. The Sacramento River Bank Protection Project 
work consists of providing bank stabilization at locations which are 
identified each year as the most critical in terms of erosion control. 
Emphasis is currently on erosion control work along the American River 
and the lower Sacramento River and sloughs.
    The Board strongly supports continued funding of $5,500,000 for 
this project.
    Sacramento River-Levee Reconstruction.--Following the record high 
flows of February 1986, Operations and Maintenance funds were provided 
under Inspection of Completed Works to perform an evaluation of the 
integrity of the Sacramento River Flood Control System. A five-phase 
program which divided the system into five study areas was developed. 
In each phase the structural stability of the levees is examined and a 
determination made as to whether the system is functioning as its 
design level. The Reclamation Board is acting as nonFederal sponsor for 
the five phases of the Sacramento River System Evaluation. Work on 
Phase I, Sacramento Urban Area Levee Reconstruction has been completed 
and performed well during the January 1997 flood. Phase II, Marysville/
Yuba City Levee Reconstruction is under construction. The Reclamation 
Board supports the following fiscal year 1998 funding to accelerate 
construction.
  --Phase II--Marysville/Yuba City--The Board recommends funding of 
        $9,300,000
  --Phase III--Mid-Valley--The Board recommends funding of $5,600,000
  --Phase IV--Lower Sacramento--The Board recommends funding of 
        $2,000,000
  --Phase V--Upper Sacramento--The Board recommends funding of 
        $2,700,000
    American River (Common Elements).--The Water Resources Development 
Act signed in October 1996 authorized $57.7 million for construction of 
the common features which are elements common to the final array of 
candidate plans studied in the American River Watershed Project 
Supplemental Information Report. Construction of the common elements 
does not preclude construction of any of the comprehensive plans 
considered. The common features consist of stabilizing 24 miles of 
existing levees along the lower American River, raising and 
strengthening about 12 miles of levees on the east side of the 
Sacramento River, and implementing the telemetered inflow gage system 
and emergency flood warning system.
    The Board recommends funding of $44,744,000 for construction of the 
common elements.
    Upper Sacramento River--Murphy Slough.--The congressional direction 
for the Upper Sacramento Fish and Wildlife reconnaissance study focused 
on environmental restoration rather than an integrated flood control 
plan. While we still believe flood control is an integral part of 
necessary studies, we support the study results.
    It is recommended that a demonstration project for river 
restoration in accordance with Section 1135 of WRDA 1986 be developed 
on the upper Sacramento River near Murphy Slough. The proposal entails 
planting vegetation to restore riparian forest and wetland habitat. The 
project may result in an improvement in anadromous fisheries.
    The Board supports funding for the project.
    Magpie Creek (Sacramento County).--Feasibility evaluations of the 
Magpie Creek area indicate a need for increased flood protection for 
the study area. Magpie Creek overflows its bank, and periodically 
floods lands within the City of Sacramento downstream of McClellan AFB. 
The original Magpie Creek flood control project design described in the 
April 1996 Detailed Project Report, was based on the assumption that 
flood control improvements by the Air Force on McClellan AFB would be 
accomplished. However, Congress has since directed the closure of the 
AFB resulting in the suspension of on-base flood control project 
funding.
    In December 1996, the Corps completed a supplemental report which 
defines a Revised Tentatively Selected Plan which accounts for the 
elimination of the on-base improvements. The Revised Tentatively 
Selected Plan would not reduce the flood protection provided by the NED 
plan discussed in the Detailed Project Report. The proposed work 
includes channel widening and levee improvements to the existing Magpie 
Creek Diversion Channel to increase the level of flood protection 
within the City of Sacramento.
    The Board supports funding to move the study from the feasibility 
stage to preconstruction engineering and design and subsequently to 
construction.
    Yolo Basin Wetlands (Davis Site).--The project area is located next 
to the Yolo Bypass which is an operative feature of the Sacramento 
River Flood Control Project. the Yolo Bypass extends 43 miles from the 
Fremont Weir on the Sacramento River, south to the city of Rio Vista 
where it rejoins the Sacramento River. The Davis site will comprise 396 
acres consisting of 212 acres of permanent wetlands, 64 acres of 
riparian woodlands, 64 acres of grassland/upland, and 56 acres of 
seasonal wetland.
    The project was initiated in 1991 with funds added by Congress to 
the fiscal year 1991 Appropriations Act. The current project is 
proceeding under Section 1135(b) of WRDA 1986.
    The Board supports funding for continuing construction of this 
project.
    China Island Habitat Restoration.--As an outgrowth of the 
reconnaissance report on the San Joaquin River Mainstem study, it is 
strongly urged that a separate environmental restoration project be 
developed substantially consistent with the Section 1135 of WRDA 1986. 
The locally preferred restoration site is known as China Island and 
would involve restoring historic wetlands and riparian habitat on about 
3,300 acres of land southwest of the San Joaquin River above its 
confluence with the Merced River.
    The Board supports funding for this project.
    Merced County Streams.--This project, authorized in 1970, will 
provide flood protection for the City of Merced and adjacent suburban 
and agricultural lands. The Castle Dam component of the project has 
been completed. Funds are for preparing engineering and environmental 
documents leading to construction of additional flood protection 
facilities and improvements in and near the City of Merced.
    The Board supports funding of $1,100,000 for this project.
    West Sacramento.--The Board is the non-Federal sponsor for the West 
Sacramento flood control project which was authorized for construction 
by WRDA 1992. The project will provide the City of West Sacramento an 
approximate 400 year level of flood protection.
    The Board supports funding of $7,500,000 for this project.
                                 ______
                                 
 Prepared Statement of Steve Hall, Executive Director, Association of 
 California Water Agencies on Behalf of the California Bay-Delta Water 
                               Coalition
    Mr. Chairman and Members of Subcommittee, thank you for providing 
me an opportunity to submit this statement on the CALFED Bay-Delta 
Program on behalf of the California Bay-Delta Water Coalition. As 
authorized in October 1996 (H.R. 4126, the California Bay-Delta 
Environmental Enhancement and Water Security Act), the Administration 
has included $143.3 million in the Bureau of Reclamation's fiscal year 
1998 budget for the CALFED Bay-Delta Program. The California Bay-Delta 
Water Coalition strongly supports this budget request.
    California's economy is one of the strongest in the world, and that 
strength is highly dependent on sufficient and reliable supplies of 
water, which in turn depend on a healthy Bay-Delta ecosystem. 
Furthermore, the Bay-Delta Estuary is a uniquely valuable resource for 
a variety of fish species, several of which are on the verge of 
extinction. It is also an important wintering area for the Pacific 
Flyway waterfowl, whose seasonal migrations reach from northern Alaska 
to the tip of South America. Therefore, the environmental health of the 
Bay-Delta has important implications for other Western States. The Bay-
Delta Estuary and its watershed are critical not only to migratory 
birds, but also to several runs of Pacific Coast Salmon. Two-thirds of 
the population of California is dependent on Bay-Delta water supplies. 
If Bay-Delta supplies were reduced to Southern California, it would 
place additional demands for supplies from the Colorado River, 
affecting the seven basin states and Mexico.
                  california bay-delta water coalition
    During the summer of 1996 a diversion coalition of environmental 
interests, urban water suppliers, agricultural users, community and 
business leaders worked together in support of the Proposition 204 
water bond measure, ``The California Safe, Clean, Reliable Water Supply 
Act of 1996.'' The Coalition has also worked together in supporting 
passage of H.R. 4126 the federal matching funds needed to implement the 
ecosystem restoration portion of the CALFED Bay-Delta Program. Exhibit 
A is a list of participants in the Coalition.
    The Coalition has brought together diverse interests to develop a 
consensus on solving the Bay-Delta problems and to actively support the 
state/federal funding priorities for ecosystem restoration.
    Our first effort was to support the Congressional authorization of 
federal matching funds to Proposition 204 (a $1 billion water bond 
measure). H.R. 4126 (the California Bay-Delta Environmental Enhancement 
and Water Security Act was authorized within the fiscal year 1997 
Omnibus Appropriations Bill (H.R. 3610) and the Omnibus Parks and 
Public Lands Management Act (H.R. 4236). The active support of Governor 
Wilson, as well as, an unprecedented level of bipartisan support led to 
quick action in the 104th Congress.
    H.R. 4126 authorized a 3-year $430 million commitment in matching 
funds for the environmental restoration of the Bay-Delta Estuary. 
Federal funding was contingent upon passage of Proposition 204. These 
federal funds will be used to fund an array of urgently needed 
ecological improvements, including:
  --The protection and enhancement of existing habitat;
  --The restoration of tidal, shallow water, riparian, riverine, 
        wetlands, and other habitats;
  --The expansion of wetlands protection program;
  --The acquisition of water for instream flow improvement;
  --Improve habitat management;
  --Improved management of introduced species;
  --Improved fish protection and management.
    The Proposition 204 bond measure on November 6 was approved with 63 
percent voter approval. attached is a background briefing book 
describing Prop. 204 and the relationship to H.R. 4126.
  department of the interior fiscal year 1998 budget request for the 
                        calfed bay-delta program
    Consistent with the California Bay-Delta Environmental Enhancement 
and Water Security Act, the Administration included a request for 
$143.3 million in fiscal year 1998 as the first installment of the 
federal funds for ecosystem restoration activities being developed by a 
federal and state partnership (CALFED). The budget authority account of 
$143.3 million is included within the Bureau of Reclamation. These 
funds would be transferred to other federal agencies participating in 
the CALFED Bay-Delta Program. We support this ``one-stop'' federal line 
item as an efficient, less bureaucratic, streamlined approach to 
funding the federal cost-sharing requirements.
  federal/state cost-sharing partnership and role for stakeholders to 
                        assume adequate funding
    The Coalition supports the use of federal-state matching funds for 
both interim and long-term ecosystem restoration efforts. As part of 
the 1994 Bay-Delta accord, the stakeholders, together with the state 
and federal signatories, committed to funding a variety of non-flow 
restoration projects. To date, approximately $22 million in water user 
funding has been provided for immediate implementation of such projects 
(commonly called Category III), over and above user contributions to 
other on-going Bay-Delta restoration programs, such as the CVPIA 
Restoration Fund. In addition, California voters recently approved $60 
million in bond funding under Proposition 204 to serve as the State's 
share of the Category III program to be made available immediately. 
Consistent with these commitments, Congress authorized, and the 
President has requested, federal funding to support the federal share 
of the Category III program and related restoration efforts in 
recognition of the significance of these immediate needs to the overall 
success of the CALFED Bay-Delta program. Proposition 204 requires that, 
prior to the release of funds ($390 million) for the CALFED Bay-Delta 
ecosystem restoration program, a state/federal cost-sharing agreement 
will be executed. Likewise, the Administration's budget request for the 
CALFED Bay-Delta Program requires a cost-sharing agreement. A cost-
sharing agreement is currently being developed. The Coalition supports 
expeditious completion of a cost-sharing agreement to ensure that the 
requested funds are spent in the most efficient, cost-effective manner 
that restores the Bay-Delta ecosystem.
 ecosystem roundtable process to assure that federal/state funding is 
                      focused on priority projects
    The CALFED Bay-Delta Program will be the largest environmental 
restoration effort of its kind. The Bay-Delta Program, therefore, 
represents an unprecedented cooperative effort among federal, state, 
and local agencies. The Program also provides for substantial input and 
guidance from stakeholders groups and all interested public interests. 
To ensure that the stakeholders' views are incorporated in the 
priority-setting process of selecting individual ecosystem restoration 
projects, the Ecosystem Roundtable was formed to advise the CALFED Bay-
Delta Program state and federal agencies and to coordinate activities, 
projects, and programs throughout the Bay-Delta Watershed.
    A comprehensive ``implementation strategy'' to identify near-term 
priorities for Bay-Delta Ecosystem Restoration is being finalized by 
the Ecosystem Roundtable for use in conjunction with the fiscal year 
1998 budget request and the overall five-year CALFED Program budget.
    The overall Ecosystem Restoration Program will be implemented in 
phases, over several decades. This implementation strategy allows the 
short-term program to logically flow into a long-term program that 
allows for adaptive management flexibility.
                                summary
    The CALFED Bay-Delta Program is bringing state, federal, local, and 
stakeholder interests together in an open public process to make joint 
decisions on how to implement the ecosystem restoration programs and 
monitor progress in order to ensure overall success. The CALFED Program 
has broad responsibility to plan and coordinate a comprehensive, long-
term solution to restore the estuary and improve the reliability and 
quality of Bay-Delta water supplies. It is vital that environmental 
restoration activities be fully implemented. All stakeholders agree on 
this point.
    Species in the Bay-Delta watershed continue to be proposed for 
listing under the Endangered Species Act (ESA). Recovery efforts cannot 
begin without adequate funding and assurances that cost-sharing 
arrangements -are available to implement the many needed projects.
    Many projects and habitat restoration programs have already been 
planned and are ready to be implemented. Funding commitments are needed 
to move projects into construction. New projects are being identified 
by the Ecosystem Roundtable process and will be completed in early 
summer with a list of prioritized projects for the fiscal year 1998 
program.
    In closing, I note that the CALFED Bay-Delta partnership of state/
federal/stakeholder interests is consistent with the Draft House 
Republican Policy Priorities (Item 9), ``Make our environmental 
protection efforts smarter and more effective * * * by promoting needed 
environmental infrastructure--private as well as public.'' Clearly, our 
coalition's broad-based support for implementing a comprehensive Bay-
Delta ecosystem restoration program demonstrates the urgent need to 
appropriate the $143.3 million request for fiscal year 1998.
                                 ______
                                 
  Prepared Statement of Joe Serna, Jr., Mayor, City of Sacramento, CA
    The City of Sacramento has been unenviably labeled as the city 
having the most dangerous flood plain in the United States. Despite the 
efforts of Federal, State, and local flood control agencies to counter 
this threat, devastating floods have occurred in the region during the 
past two years. In January and March of 1995 intense rainfall caused 
flooding in the City. Coupled with power outages that cut off power to 
drainage pumps, the storms caused extensive flood damages and 
evacuation of residents. Less than two years later, the intense rain 
storms of January 1997 over snowpacked watersheds in the region caused 
unprecedented runoff. Folsom Dam, on the American River was required to 
release the maximum design flow (115,000 cfs) within the downstream 
levees through the City of Sacramento, joining the Sacramento River in 
the downtown area. The Sacramento River was already conveying record 
flows from its tributaries, including the Feather River which 
experienced a flood of record. Had it not been for the system of relief 
weirs and bypasses of the Federal/State flood control system on the 
Sacramento River, it is likely there would have been levee failures 
effecting the City and disastrous flood damages and loss of lives of 
monumental proportions. The U.S. Army Corps of Engineers have estimated 
that if the January 1997 storms had shifted from the Feather River 
watershed to the adjacent American River watershed it is questionable 
that the existing levees would have been able to contain the releases 
that would have been necessary from Folsom Dam and Reservoir. The U.S. 
Army Corp of Engineers' estimate indicated there was a 50-50 chance of 
failure of the American River levee system.
    Congress in September 1996 recognized the potential for immense 
flood losses and damages in Sacramento by including authorization in 
the Water Resources Development Act of 1996 for construction of 24-
miles of levee improvements to the American River and 12 miles to the 
Sacramento River levees protecting the City of Sacramento, new flood 
gauges upstream of Folsom Dam and Reservoir, and improvements to the 
Flood Warning System along the lower American River.
    In President Clinton's proposed budget for fiscal year 1998 
released in February of this year, he included funds for several 
projects and studies that will increase the level of flood protection 
for the City of Sacramento. The ``Common Elements'' of the plan for 
providing a greater level of flood protection for the City of 
Sacramento, were authorized in the Water Resources Development Act of 
1996, the President's proposal for $44.7 million in construction funds, 
together with $5.5 million for bank protection on the levees of the 
American River which bisects the City demonstrates the Administration's 
high priority for raising the level of flood protection for this area. 
The City of Sacramento strongly recommends and supports approval of 
these funds so that the highest priority may be assigned to such 
construction without delay. The Administration's proposal also includes 
funds for initiating the flood control improvements on Magpie Creek and 
continued feasibility studies for the South Sacramento County Streams 
Group which flow through the City.
    Funding is proposed by the Administration for Preconstruction 
Engineering and Design (PED) for the efforts of the U.S. Army Corps of 
Engineers to continue developing a comprehensive plan for flood control 
on the rivers through and adjacent to the City of Sacramento. 
Additional funding is needed for reimbursement for the Federal flood 
protection share of the works in the Natomas Area of Sacramento that 
have been constructed or improved by the Sacramento Area Flood Control 
Agency. Funding for the U.S. Army Corps of Engineers' PED efforts on 
the American River Watershed Investigation may need to be increased to 
allow the U.S. Corps of Engineers to continue the planning for a 
comprehensive solution to the American River threat.
    The Administration's proposed budget requests $44.7 million for 
full funding of the construction funds needed for the ``Common 
Elements'' on the American and Sacramento Rivers improvements. If the 
Congress prefers to appropriate only the amount that could be expended 
in fiscal year 1998, the amount of $9.5 million would be sufficient to 
ensure timely implementation of the first year of the urgently needed 
flood control improvements. We are hopeful that some of the 1998 
savings in the President's budget could be used to reimburse the locals 
for the work already performed in the Natomas Area of Sacramento. We 
currently estimate the U.S. Corps of Engineers reimbursement should be 
approximately $35 million. The President's budget also includes $5.5 
million for needed bank work to protect the American River levees. The 
City of Sacramento supports the State of California and the Sacramento 
Area Flood Control Agency's efforts to assist in cost-sharing the 
``Common Elements'' project. The Governor's budget for 1997-1998 
includes $3.2 million for the State's share of the ``Common Elements'' 
and funding to match the Federal share of bank protection for the 
American River levees.
    In summary, the specific recommendations from the City of 
Sacramento for the fiscal year 1998 appropriations for the U.S. Army 
Corps of Engineers flood control programs are supportive of the 
Administration's proposed budget and are as follows:

American River Common Elements (24-miles of slurry wall 
    in the lower American River levees; 12-miles of 
    levee modification on the Sacramento River; 3 stream 
    flow gauges upstream of Folsom Reservoir; 
    Modifications to the Flood Warning System below 
    Folsom Dam).........................................      $9,400,000
4-year total............................................      44,740,000
Sacramento River Bank Protection Project................       5,500,000
    San Joaquin River Basin--South Sacramento County 
      Streams Investigation.............................         180,000
    South Sacramento County Streams Group 
      Preconstruction Engineering and Design............         500,000
American River Watershed Preconstruction Engineering and 
    Design..............................................         401,000
    Reimbursement for Natomas North Area Local Project..      35,000,000

    The Continuing Authorities Program of the Corps of Engineers, 
authorized in the Flood Control Act of 1948, receives a lump sum 
appropriations each year, and funds are distributed to the U.S. Army 
Corps of Engineers offices for expenditures based on priorities 
established by the Chief of Engineers. The U.S. Army Corps of Engineers 
has been investigating the flood control problems and possible 
solutions on Magpie Creek since 1990 and has recently completed a 
feasibility study and environmental documentation for a project that 
would provide a high degree of flood protection on this stream. 
Preconstruction Engineering and Design are scheduled to be initiated in 
fiscal year 1997, and funds are needed in fiscal year 1998 to complete 
design and initiate construction. The City of Sacramento supports 
funding in fiscal year 1998 for continuation and completion of 
construction of this project. It is recommended that the Chief of 
Engineers provide sufficient funds for completion of the project in his 
distribution of fiscal year 1998 Section 205 funds.
    In addition to Sacramento's flood control problems, the City has 
requested under Public Law 104-303, Section 503 (Watershed Management, 
Restoration and Development) that the U.S. Corps of Engineers assist 
the City of Sacramento with $3 million for the combined sewer system 
improvements which will improve Sacramento River water quality (see 
attached fact sheet).
    Thank you for the opportunity to submit this statement and your 
consideration of the requested funding. The levees protecting the City 
of Sacramento are the City's first line of defense. Thank you for your 
assistance in making them reliable.
Issue:
    Implement a federal cost-shared program to correct natural 
resources and human health threats associated with the City of 
Sacramento's Combined Sewer System (CSS). The proposed federal share of 
requested assistance is $3 million. The requested assistance is to 
support design and construction activities.
    This project will accomplish two goals. First, it will address 
necessary infrastructure repairs to the city's wastewater treatment 
system. Second, it will contribute to the CAL-FED initiative to restore 
the Bay-Delta's ecosystem.
Background:
    The local sponsor for this request is the City of Sacramento. 
Authority for this request is Public Law 104-303, Section 503 
(Watershed Management, Restoration, and Development). This request is a 
new project.
    The CSS is a system first constructed in the 19th century to handle 
rainwater and wastewater flows. After a century of use, the system is 
under significant stress due to age and environmental health concerns.
    In 1990, the City recognized that the system required repairs and 
expansion.
    At the same time, the California Regional Water Quality Control 
Board issued a cease and desist order due to storm-related sewer 
backups into streets and into the Sacramento River.
    After significant studies, the City identified a solution that 
would include rehabilitation and facilities expansion to reduce future 
overflows.
    The total cost is estimated to be almost $400 million, of which the 
first phase costing $132 million has begun. The project, once 
completed, will allow the City's economy to grow without damage to the 
environment, stabilize neighborhoods, and provide an enhanced quality 
of life by protecting the Sacramento River and by extension of the Bay-
Delta.
    The goals of the CSS project are: provide full control over the 
risk of wastewater flooding city streets; reduce the potential for 
untreated wastewater to be discharged to the Sacramento River when the 
system is over capacity; and rehabilitate infrastructure.
                                 ______
                                 
          Prepared Statement of the County of San Joaquin, CA
    San Joaquin County, located in the heart of California's central 
valley, has both a vibrant agricultural economic base and burgeoning 
metropolitan growth. Both of these vital elements are vulnerable to the 
forces of nature. The 1997 flood has inundated thousands of acres and 
threatened our major urban areas. The actual economic loss to the 
County in 1997 is staggering ($100 million) and the 
potential loss due to flooding is enormous. The heart of Stockton faces 
a flood threat from the Calaveras River, Bear Creek and Mosher Slough. 
The Army Corps of Engineers is studying Federal alternatives to reduce 
the flood threat and their report is due in April 1997. In the 
meantime, a flood control authority, San Joaquin Area Flood Control 
Agency (SJAFCA) has been formed and construction is underway (a $70 
million investment) to restore the Stockton area 100-year level of 
flood protection. We have aggressively moved ahead with this work to 
protect our people but we understand that we could receive credit for 
our work against a Corps developed project.
    At the other extreme of the weather spectrum, San Joaquin is very 
vulnerable to drought induced water shortages. Due to the export of our 
water by East Bay Municipal Utility District to the Oakland area and by 
the Bureau of Reclamation to the CVP, San Joaquin County is deficient 
of an adequate water supply. Our ground water levels dramatically drop 
during a less than average water year. During these drops, the threat 
of salt water intrusion in our ground water basin from the Delta is a 
major concern. Our local water district (Stockton-East Water District) 
has invested $65 million to allow transfer of Stanislaus River flows to 
supplement our water supplies, but this project is dependent on the 
coordinated operation of New Melones Reservoir and local storage 
capability during wet years.
    As you can see, we are willing to invest in our future and we will 
continue to do so. We need Federal help in several of these projects 
and we request Federal appropriations during fiscal year 1997-98 for 
the following Corps of Engineers and Bureau of Reclamation projects:

                                                        Fiscal Year 1998
Corps of Engineers--General Investigations (Surveys)--
    Stockton Metropolitan Area..........................        $450,000
Bureau of Reclamation--Construction Projects--South 
    Delta Barriers......................................         200,000
Bureau of Reclamation CAL-FED Program (HR 4126).........     143,300,000

                           detailed comments
Corps of Engineers--Stockton Metropolitan Area
    This Corps study addresses our two critical water resources needs--
flood protection and water supply. The Corps study will develop a 
comprehensive flood control plan for Bear Creek, Mosher Slough, 
Calaveras River, Mormon Slough, Duck Creek and the San Joaquin River 
north of Mossdale. The Corps Reconnaissance study will be complete in 
April 1997. If the Corps identifies a project compatible with the $70 
million SJAFCA flood restoration project, we expect to receive credit 
for our work against the local share of the larger Corps project.
    In addition to the flood control, the Corps study will determine 
the viability of using the existing Farmington Dam for a water supply 
reservoir. The dam currently detains water for flood protection but 
does not store water for water supply. By making Farmington Dam a 
multiple purpose project, San Joaquin County's water shortage could be 
addressed with minimal impact. We are hopeful that this element of the 
study will obtain a Federal interest.
    The timely funding and completion of this important Corps study is 
crucial to the economic well being of San Joaquin County.
U. S. Bureau of Reclamation--South Delta Barriers 1998
    The programmed money will be used to start construction of salinity 
barriers in the South Delta. The completion of this project would 
formally conclude litigation brought against the Bureau by the South 
Delta Water Agency for violations of water quality standards. Trial 
barriers have been constructed annually and the permanent barriers 
should help the salinity problems in the South Delta.
U. S. Bureau of Reclamation--CAL-FED Process
    The Federal funding requested will match State Proposition 204 
monies for Delta restoration. These funds will be used to offset the 
accumulated impact of the CVP and SWP water diversions. Although 
project specifics are not readily available at this time, we expect the 
funding would improve Delta levee security, improve water quality in 
San Joaquin County, and enhance environmental habitat. San Joaquin 
County strongly supports this funding.
                                 ______
                                 
     Prepared Statement of Dick Lyon, Mayor, City of Oceanside, CA
   u.s. corps of engineers san luis rey river flood control project 
                         oceanside, california
    Dear Chairman Domenici and Members of the Subcommittee: The City of 
Oceanside requests the Subcommittee's support for $5,400,000 as 
recommended in the President's fiscal year 1998 budget for the final 
phase of construction of the San Luis Rey River Flood Control Project 
in Oceanside, California. This project provides 5.4 miles of double 
levee, stone protection with a soft bottom channel, 1,330 feet of 
parapet walls, six interior drainage ponds, a five-mile bicycle trail, 
and habitat to mitigate for impacts to the endangered least Bell's 
vireo. Over 90 percent of construction on this project has been 
completed. The remaining portion of the project is the closure of a 
small segment of levee, construction of the lower pond, installation of 
relief wells and additional environmental measures. With the proposed 
funding, construction of the project can be completed by December, 
1997.
    The City of Oceanside has appreciated the strong support that the 
Subcommittee has offered this project over the years. Completion of the 
San Luis Rey River Flood Control Project will provide flood protection 
to over 100 businesses in the Oceanside Industrial Park and Oceanside 
Municipal Airport area. This flood protection will not only provide a 
tremendous economic benefit to the citizens of Oceanside, but will also 
protect life and property against devastating floods.
    Thank you for your continued support for this important project.
 mission basin brackish groundwater desalting research and development 
                     project oceanside, california
    The City of Oceanside appreciates the Subcommittee's past support 
for the authorization of the Mission Basin Groundwater Desalting 
Facility in fiscal year 1997. The City is now requesting that the 
Subcommittee support an appropriation of $1.5 million in the fiscal 
year 1998 federal budget for 25 percent of the desalter expansion 
costs.
    The City of Oceanside owns and currently operates the Mission Basin 
Groundwater Desalting Facility, located near Fireside Drive in 
Oceanside. Under the current operations, approximately 1.9 million 
gallons per day (MGD) of potable water is produced from treating 
brackish groundwater through a reverse osmosis process. Because of the 
successful operation of the existing plant over the past three years, 
the City plans to expand the production capacity of the groundwater 
desalting program up to 6.3 MGD, or 22 percent of the City's daily 
average demand. The cost for the expansion is estimated to be $6.0 
million. The additional water supply is expected to be available by 
late 1998.
    The City of Oceanside is fortunate that the Mission Basin aquifer 
holds about 30 billion gallons or 92,000 acre feet of water. Water 
rights to this dependable aquifer were established over 100 years ago. 
The City anticipates that at least 50 percent of Oceanside's future 
water supply can ultimately be derived from this source.
    Expansion of the Mission Basin Desalting Facility has several 
important benefits. First of all, it will provide the City of Oceanside 
an independent water source that can serve the community in the event 
of a natural disaster, such as an earthquake. In addition to reducing 
the City's reliance on imported water, the quality of water produced at 
the desalting facility is significantly better than that of the City's 
imported source (400-500 total dissolved solids [TDS] versus 600-700 
TDS for imported water). Further, the project will enhance the City's 
ability to reclaim its wastewater which will be used for a sea water 
barrier on the downstream side of the Mission Basin aquifer, and will 
also be utilized for maintaining an environmentally safe water level in 
the aquifer.
    The local water supply produced through the Mission Basin Desalting 
Facility saves the City of Oceanside $150,000 per year today and will 
save at least $500,000 per year when it is expanded to its 6.3 MGD 
capacity. These savings will keep Oceanside's water rates comparable to 
or lower than average rates in surrounding communities.
    The City of Oceanside respectfully requests your support for this 
vital project.
                                 ______
                                 
     Prepared Statement of San Diego, CA, Water Reclamation Program
    The City of San Diego provides water service as well as wastewater 
collection, treatment and disposal service to a growing metropolitan 
area of two million people. The City receives 90 percent of its water 
supply from Colorado River and northern California sources, hundreds of 
miles distant from the City. Located at the tail end of this extensive 
aqueduct supply system, San Diego is most vulnerable to outages or 
reductions in supplies from these sources. In conjunction with its 
wholesale water supplier, the San Diego County Water Authority, the 
City is engaged in a long-term effort to reduce regional reliance on 
imported water supplies. The San Diego Water Reclamation Program is 
critical to the success of this effort.
    The City will have invested nearly $300 million in water 
reclamation facilities through this fiscal year, and has programmed 
another $90 million in fiscal year 1998 to continue these efforts. Upon 
completion of the water reclamation and recycling projects in the next 
20 years, the City will have an estimated $1 billion of capital 
investment in this program. The City's projects include 4 new water 
reclamation plants with a combined capacity of 57 million gallons per 
day (construction of the 30 mgd North City Water Reclamation Plant will 
be completed this month) and over 100 miles of reclaimed water 
distribution system pipelines; an innovative water repurification 
project to treat reclaimed water to a quality suitable for potable 
reuse; and a groundwater project providing for conjunctive use of 
reclaimed water and other sources of supply.
    Section 1612 of Public Law 102-575, the Central Valley Project 
Improvement Act, authorizes the Secretary of the Department of Interior 
to provide financial support for water reclamation projects in the San 
Diego area. The U.S. Bureau of Reclamation is authorized to participate 
in the planning, design and construction of water reclamation projects 
serving the San Diego area at a federal cost-share of up to 25 percent. 
Based on the criteria established by the Bureau of Reclamation 
regarding funding eligibility, approximately $82 million through this 
fiscal year, and $138 million of the projected expenditures through 
fiscal year 1998 are eligible for federal funding. Nearly half of the 
$1 billion of projected expenditures over the next 20 years would be 
eligible for the 25 percent federal funding.
    These costs represent a heavy financial burden for the City to bear 
alone. Federal participation will help make this innovative water 
supply program a reality. Therefore, the City of San Diego respectfully 
requests the Committee to recommend appropriating funds in the amount 
of at least $13 million in fiscal year 1998 for the San Diego region 
through the Bureau of Reclamation program.
                san diego area water reclamation program
    The San Diego Area Water Reclamation Program is an ambitious, long-
term program designed to decrease regional reliance on imported water 
supplies. The Program is a cooperative effort by the cities of San 
Diego, Escondido, and Poway; the Otay Water District; the Padre Dam 
Municipal Water District; the Sweetwater Authority; the Tia Juana 
Valley County Water District; and San Diego County Water Authority. 
Together, these agencies have developed a system of interconnected 
water reclamation projects that will make the best use of existing and 
planned water reclamation facilities and result in a cost effective and 
efficient use of local water resources.
    When completed, the San Diego Area Water Reclamation Program will 
serve an area of more than 700 square miles, from the agricultural 
valleys near the City of Escondido in the north to the expanding 
business centers along the international border with Mexico in the 
south. Ultimately, almost 23 billion gallons (70,050 acre-feet) will be 
added annually to the region's scarce local water supply, more than 
doubling the current average local water supply. Facilities to be 
constructed include up to ten new or expanded water reclamation plants, 
a state-of-the-art water repurification facility, and hundreds of miles 
of reclaimed water delivery pipeline.
    Implementation of the San Diego Area Water Reclamation Program will 
produce both economic and environmental benefits. The development of 
local reclaimed water supplies will provide opportunities for 
environmental enhancement projects within San Diego County and reduce 
the demand for imported water from the Sacramento-San Joaquin River 
Delta, an environmentally sensitive water body of national 
significance. The availability of a reliable local water supply is also 
critical to the region's long-term economic health and its ability to 
attract and retain employers. In the near-term, construction of the 
reclamation facilities will stimulate the local economy by creating 
jobs in construction-related industries. After the facilities are 
completed, many high-wage, high-skill jobs will be created in the 
operation and maintenance fields.
    Construction is already under way for a number of these reclamation 
facilities. The City of San Diego has nearly completed the construction 
of its flagship reclamation facility, the North City Water Reclamation 
Plant. While still in the planning stages, the proposed Water 
Repurification Program could have far-reaching consequences for both 
the San Diego region and the State of California. This innovative water 
supply project will treat reclaimed water to a quality standard equal 
to that of untreated water supplies. The repurified water would be 
stored in a local reservoir for subsequent potable uses. If implemented 
on a wide scale, water repurification technology could help to solve 
California's long-term water supply problem.
    With an annual cost in the range of $900-$1,200 per acre-foot, the 
San Diego Area Reclamation Program is competitive with the development 
of new imported or other local water supplies. However, the level of 
capital investment makes it a heavy financial burden for the local 
agencies. The vast majority of the capital costs would have to be 
funded by local ratepayers. The financial feasibility of this ambitious 
water supply development project, if funded solely with local 
resources, is questionable. Federal participation would provide the 
means to ensure the project is constructed and the benefits realized.
          city of san diego regional water reclamation project
    The City of San Diego is undertaking a regional water reclamation 
program which will ultimately provide over 8.6 billion gallons (26,500 
acre-feet) of reclaimed water annually to users within the City of San 
Diego and surrounding communities. The proposed regional reclamation 
system will include four new water reclamation plants: one in northern 
San Diego, one in central San Diego, and two in southern San Diego near 
the international border with Mexico. These water reclamation 
facilities will serve commercial, industrial and residential customers 
through a network of over 125 miles of distribution pipeline.
Northern/Central Regional Water Reclamation System
    The City of San Diego is scheduled to complete construction of its 
flagship reclamation facility, the 30-million-gallon-per-day (mgd) 
North City Water Reclamation Plant (North City WRP), this month. The 
North City WRP could ultimately provide over 4.5 billion gallons 
(14,000 acre-feet) of reclaimed water annually to meet commercial, 
industrial and landscape irrigation demands in northern and central San 
Diego and the southern portions of the neighboring City of Poway. 
Reclaimed water will be delivered to over 750 user sites via an 
extensive network of pump stations and pipelines. The City of Poway has 
completed a portion of its southern reclaimed water distribution system 
and will complete the remaining portions of the system in time to take 
deliveries from the North City WRP. Initial users will include the 
internationally known Torrey Pines Golf Course, Miramar Naval Air 
Station, and CalTrans, as well as numerous schools, parks, nurseries 
and residential homeowner associations.
    Construction of the North City WRP created badly needed jobs in San 
Diego's construction-related industries. The City estimates that this 
project alone generated 4,400 job-years of work for the local 
community. Construction of the northern/central distribution system is 
expected to generate an additional 4,200 job-years of work. After the 
plant is completed, many high-wage, high-skill jobs will be created in 
the operation and maintenance fields. The development of a reliable 
local water supply will improve the long-term health of the San Diego 
economy by enhancing the region's ability to attract and retain 
employers.
    A future reclamation plant is planned for the commercial center of 
San Diego to supplement reclaimed water from the North City WRP. The 
proposed 8-mgd Mission Valley Water Reclamation Plant (Mission Valley 
WRP) could provide 1.3 billion gallons (4,000 acre-feet) of reclaimed 
water annually for the irrigation of schools, parks, commercial and 
tourist facilities, cemeteries, nurseries, golf courses, freeway 
embankments and street medians. This supplemental source of reclaimed 
water would allow the North City WRP to serve new customers in the 
developing communities in northern San Diego.
South Bay Regional Water Reclamation System
    Construction of the North City WRP will be followed by the 
construction of the 7-mgd South Bay Water Reclamation Plant (South Bay 
WRP) near the international border with Mexico. The South Bay WRP will 
provide almost one billion gallons (3,000 acre-feet) of reclaimed water 
annually to approximately 50 commercial, industrial, and agricultural 
users in Southern San Diego County. The South Bay WRP and southern 
distribution system, currently scheduled for completion by 2001, will 
complement reclamation projects proposed by Otay Water District, the 
Sweetwater Authority, and the Tia Juana Valley County Water District.
    The estimated costs (in 1997 dollars) for the City of San Diego 
Water Reclamation Program are as follows:

Northern/Central Regional Water Reclamation System:
    North City WRP......................................     $50,094,000
    Mission Valley WRP..................................      17,040,000
    Northern/Central San Diego Distribution System......     180,615,000
                    --------------------------------------------------------
                    ____________________________________________________
      Subtotal..........................................     247,749,000
                    ========================================================
                    ____________________________________________________
South Bay Regional Water Reclamation System:
    South Bay WRP.......................................      22,475,000
    Southern San Diego Distribution System..............      21,493,000
    Otay Valley WRP.....................................      14,880,000
                    --------------------------------------------------------
                    ____________________________________________________
    Subtotal............................................      58,848,000
                    --------------------------------------------------------
                    ____________________________________________________
      Total.............................................     306,597,000
                 san diego water repurification program
    The City of San Diego, with assistance from the San Diego County 
Water Authority (SDCWA), is planning to use cutting-edge technology to 
purify almost 4.9 billion gallons (15,000 acre-feet) of reclaimed water 
annually to a level equivalent to that of existing imported water 
supplies. The Water Repurification Project is the natural outgrowth of 
a multi-year health effects study conducted by the City of San Diego. 
The health effects study showed that the quality of repurified water is 
comparable to the quality of imported raw water supplies and has no 
health effects.
    The City of San Diego proposes to construct a water repurification 
facility with a capacity of up to 20-million-gallons-per-day (mgd) to 
treat reclaimed water from the North City Water Reclamation Plant. The 
repurified water would be transported over 20 miles to the San Vicente 
Reservoir for blending with imported raw water supplies. The blended 
water would eventually be conveyed via the existing El Monte Pipeline 
to the Alvarado Filtration Plant. There the water would undergo 
additional filtration and disinfection before being introduced into the 
City's potable water delivery system.
    The City of San Diego and the SDCWA conducted a detailed 
feasibility study which indicated the proposed project is both 
technically and economically feasible. The State of California 
Department of Health Services reviewed the feasibility study and 
conceptually approved the proposed project. A citizens advisory 
committee convened by the City and the SDCWA concluded that there is 
sufficient information available to establish the suitability of water 
repurification as a supplement to the San Diego region's water supply.
    The Water Repurification Program is expected to replace the less 
cost-effective elements of the City of San Diego's proposed non-potable 
distribution system. Implementation of the Water Repurification Program 
in combination with selected elements of the non-potable distribution 
system would allow the City to achieve the most efficient use of water 
from its North City WRP. Should the Water Repurification Program prove 
feasible, it could begin operation in late 2001.
    The proposed Water Repurification Program has potentially far-
reaching consequences for both the San Diego region and the State of 
California. California has a wastewater stream of some 2.5 to 3 million 
acre-feet per year, the vast majority of which is going unused. By 
providing for the near total recovery of this non-traditional resource, 
the Water Repurification Program could help to solve California's 
chronic water supply problem.
    The estimated cost of the Water Repurification Program in 1997 
dollars is $133,523,000. Cumulative expenditures through fiscal year 
1998 are projected to total $14,223,000.
                    san pasqual groundwater project
    The proximity of the San Pasqual Groundwater Basin to the City of 
Escondido's Hale Avenue Resource Recovery Facility (HARRF) provides a 
unique opportunity for the conjunctive use of reclaimed water and 
groundwater supplies. The San Pasqual Valley, an agricultural preserve 
located within the incorporated limits of San Diego, contains wetland, 
riparian and other sensitive habitat. The world-renowned San Diego Wild 
Animal Park is also located within the preserve's boundaries. The 
existing City of San Diego's 1-mgd San Pasqual Aquaculture Plant 
provides reclaimed water for irrigation purposes to agricultural 
customers in the Valley and residential and commercial users in the 
community of Rancho Bernardo.
    The City of San Diego proposes to construct a San Pasqual 
Groundwater Project which will recharge up to 2.6 billion gallons 
(8,000 acre-feet) of reclaimed water from the HARRF into the San 
Pasqual Valley Groundwater Basin. The reclaimed water will blend with 
natural sources of recharge and will subsequently be extracted and 
treated at a 5-mgd reverse-osmosis facility, to be located at the San 
Pasqual Aquaculture Plant site.
    The San Pasqual Groundwater Project will add approximately 2.6 
billion gallons (8,000 acre-feet) to local water supplies. In addition 
to the benefits derived from job creation in the construction and 
service industries, implementation of this project will result in the 
preservation of sensitive habitat and the protection of a vital 
watershed area. Improvement of the groundwater quality in the basin 
will also help farmers reliant on groundwater supplies remain 
economically viable and maintain the San Pasqual Valley's agricultural 
identity.
    The estimated cost of the City of San Diego San Pasqual Groundwater 
Project in 1997 dollars is nearly $47 million.
                                 ______
                                 
  Prepared Statement of the Public Works Department, City of Tracy, CA
    The City of Tracy has developed a water reuse project to separate 
the water used by H.J. Heinz' Tracy plant to wash tomatoes. This water, 
called food process water, currently is sent directly to the City's 
municipal treatment facility. Food process water is used only to clean 
the tomatoes. There is no sanitary contribution.
    The volume of water from the Heinz facility is approximately 800 
acre-feet per year. By separating out the Heinz flow, additional 
capacity will be available at the municipal treatment plant. The City's 
Master Plan Study concluded that this was the most cost effective way 
to add capacity to provide for anticipated industrial and residential 
growth in the community.
    The City proposes to purchase or lease a farm of approximately 300 
acres of land that it would irrigate with the process water. Utilizing 
a separate pipeline from the Heinz facility, the water will be conveyed 
to the farm for reuse. The City intends to enter into a contract with 
an experienced farm manager who will actually run and maintain the farm 
on a day-to-day basis. The organic matter in the water contains 
valuable nutrients that make it an ideal soil conditioner for some 
forage crops such as alfalfa, oats, milo or hay. The crop will be sold 
and revenues generated will offset a portion of the farm's operating 
expense. The fields will be tilled, disked and carefully managed in 
accordance with the Best Management Practices typical of the local 
area.
    The farm will look like any other farm in the community. All the 
food process water imported will be contained on the site and any 
storage ponds will be lined.
    This project is similar to many others that have been successfully 
operated in other parts of California. The Cities of Merced and 
Modesto, among others, have similar farms that have been on-going for 
more than 10 years.
    Food process water reuse is environmentally-friendly. Recent 
studies of the water content has indicated that the water is very safe. 
The water was sampled for a wide variety of constituents including 
metals, herbicides, insecticides, solvents and other organic chemicals. 
Maximum detected metal concentrations were well below drinking water 
standards by factors of 5 to 10 or more. Few organic compounds were 
detected in the water and were also substantially below drinking water 
standards. They will be continuously monitored as required by a variety 
of state regulations.
    The goals of the water recycling and reuse project include:
  --Conserve and reuse water for agriculture and the community;
  --Select a farm site that is technically acceptable;
  --Select a farm site that meets with the approval of the public;
  --Reduce flows to the City Municipal Treatment Facility; and
  --Involve the public in all aspects of the project.
    The public has actively participated in the project from the 
beginning. The City organized a Citizen's Advisory Committee, 
consisting of local farmers, other key stakeholders, and 
representatives of the City and Heinz, to assist the City in its 
planning. A series of interviews with knowledgeable community leaders 
were conducted to focus on issues and concerns. Two public forums were 
advertised and held in Tracy to give the public an opportunity to 
comment.
    Two project overview newsletters were prepared and distributed to 
the community. Other interested citizens were mailed newsletters and 
case studies of similar San Joaquin Valley projects. There was, for all 
intents and purposes, no citizen opposition.
    Funding will be in the form of a combination of local and federal 
funding. The project is estimated to cost approximately $13 million. 
The local share of $9.75 million will be bond financed. The federal 
share is $3.25 million.
    The project has received substantial public support as it affords a 
number of benefits to the agricultural and the development communities, 
and the City and its residents as a whole. It provides for future 
growth in a cost-effective basis, benefits Tracy's largest industrial 
employer, while reusing water in a environmentally-friendly plan.
                                 ______
                                 
Prepared Statement of Walter Fickewirth, Chairman, Placer County Water 
                                 Agency
    In 1996, representatives of this community submitted testimony with 
bipartisan, regional support of a multi-purpose Auburn Dam and its 
related issues. [attached for ease of reference are copies of last 
year's written statements submitted by Placer County Water Agency 
(PCWA) and the American River Authority (ARA).] All of the reasons to 
support a multi-purpose Auburn Dam project by PCWA and others remains 
as valid today as in previous years, if not more so.
    Our request for Federal fiscal year 1998 concerns PCWA's need to 
reliably access, year-round, our American River water entitlements by 
pumping from the North Fork American River at Auburn. Our proposal has 
the potential to save the federal government money and not be a 
detriment for future support of a multi-purpose Auburn Dam project.
    By way of background, in the 1960s PCWA completed construction of a 
pump station to deliver water to PCWA's 3-mile long tunnel to supply 
water from the North Fork American River to Placer County for 
municipal, industrial and agricultural needs. [A copy of a photograph 
of the 1967 installation is enclosed (Exhibit A).] Shortly thereafter, 
a contract was entered into by the U.S. Bureau of Reclamation 
(Reclamation) and PCWA, that, among other things, allowed Reclamation 
to remove the PCWA pumps with a promise by Reclamation to re-install 
the pumps every year upon request of PCWA until the Auburn Dam was 
completed.
    Conditions have changed relevant to the Dam and for the last 
several years, Reclamation has been installing, removing and 
reinstalling a temporary replacement pump station at a minimum cost of 
$250,000 per year. This year, there was a flood of record in the 
American River, resulting in tremendous movement of the river bed and 
nearly total destruction of temporary pump station components and 
access road. Reinstallation of just the temporary pump for 1997 will 
cost the Federal government in the neighborhood of $1 million. 
[Included are a series of photographs of the North Fork American River 
at Auburn (Exhibit B) taken during and after the devastating flood of 
early January 1997 in Northern California.] We estimate the American 
River bed near Auburn went down forty feet in some areas, which will 
not only increase the temporary pump station installation costs this 
year but will increase the likelihood of similar damage at lower flows 
in the future.
    All of this brings us to the issue of the day: We are seeking 
federal funding for a PCWA all-weather, year-round accessible and 
operational pump station with associated channel stabilization that 
carries water to the pump intakes and that will allow PCWA to access 
its own water year-round. Also, we seek to help the federal government 
eliminate the annual federal expense of installing and removing the 
temporary replacement pumps that are subject to flood damage. Further, 
we seek a project that, when a multi-purpose Auburn Dam is built, 
allows most of the pump station equipment to be salvaged and re-
installed as part of a permanent pump station that will be required 
because of the probable fluctuations in water level of a multi-purpose 
facility. [The fluctuation of the lake will impact us because the inlet 
of the PCWA existing 3-mile long, 12-foot diameter tunnel is located 
250 feet above the river, thus whenever the surface elevation of an 
Auburn Dam reservoir drops below the tunnel inlet, a pump will be 
needed to lift water to the tunnel inlet.]
    In regard to a funding request, there are some variations due to 
the nature of this project that we outlined below.
    PCWA urges your support of Reclamation's request for a supplemental 
appropriation for Federal fiscal year 1997 of $1.5 million to replace 
the temporary pump station this year. PCWA relies on this facility to 
meet the needs of its existing customers each year; and we fully 
support Reclamation in this request as an absolute minimum level.
    In 1995 and 1996, Reclamation prepared a concept report for the 
installation of an all-weather pumping facility to meet PCWA's needs 
and to eliminate Reclamation's annual costly obligations. In 1997, $1 
million in additional funding has been appropriated to Reclamation to 
prepare final plans and specification for construction of the 
facilities.
    Reclamation had requested $10 million in the 1998 budget and 
additional funding in 1999. But the 1998 funds were removed by the 
Federal Administration last spring because of the then-ongoing 
consideration in Congress over whether to immediately begin 
construction of a phased, multi-purpose Auburn Dam to provide flood 
control to Sacramento. Matters on Auburn Dam did not materialize and 
neither did the Administration's authorization of the $10 million.
    PCWA, thus, urges your support for restoring Reclamation's $10 
million funding in 1998 for the continuation of the all-weather pump 
station and channel stabilization project. Without your support for 
this project the work will stop at the end of this year and Reclamation 
will continue to spend millions of dollars on an inadequate, annual 
temporary facility.
    Your consideration to fund this appropriation request by 
Reclamation and PCWA would be greatly appreciated.
    If you have any questions, or need any additional information, feel 
free to contact: at PCWA, General Manager Dave Breninger at (916) 823-
4860, or our Special Projects Administrator, Jack Warren, at (916) 823-
4960; or at Reclamation, Regional Director Roger Patterson at (916) 
979-2207, or Area Manager Tom Aiken at (916) 988-1707.
    Thank you for this opportunity to bring this matter to your 
attention for funding.
                                 ______
                                 
 Prepared Statement of the Department of Water and Power, City of Los 
                              Angeles, CA
    The Department of Water and Power of the City of Los Angeles is the 
largest municipal utility in the United States serving a city of 3.6 
million.
    The Department respectfully requests the subcommittee's approval 
and support of an appropriation of $10 million for the Los Angeles Area 
Water Reclamation Program as contained in the President's budget. 
Included within this budget is about $4 million for the East Valley 
Water Recycling Project and $1 million for the Terminal Island (Los 
Angeles Harbor) Water Recycling Project. These projects were authorized 
pursuant to Section 1613 of Public Law 102-575, the Reclamation 
Projects Authorization and Adjustment Act of 1992.
    The East Valley project involves the construction of 13 miles of 
pipe and a pump station. About 2 miles of pipe have been constructed. 
The remaining pipeline and the pump station will be constructed in 
fiscal year 1998, so that operations can start in December 1998. The 
project will cost $55 million when completed. The 25 percent federal 
share amounts to $13 million, of which we have already received $4 
million. Our request of $4 million for fiscal year 1998 will help keep 
this project on schedule toward completion at the end of 1998.
    The East Valley Water Recycling Project represents the cornerstone 
of Los Angeles' commitment to water recycling. It will ultimately 
distribute 32,000 acre feet per year of recycled water to our local San 
Fernando Valley Groundwater Basin. The recycled water will also 
eventually be used for irrigation and industrial purposes.
    The other project is the Terminal Island (Los Angeles Harbor) Water 
Recycling Project. It will provide upgraded treatment and a 
distribution system that will utilize recycled water for groundwater 
recharge, industrial and irrigation applications. It is estimated to 
cost about $37 million and will operational by December 1999. Twenty-
five percent of the cost which is reimbursable from federal funding is 
$9.25 million. $840,000 has been appropriated for 1996-97. We are 
requesting $1 million for 1997-98.
    Mr. Chairman, Los Angeles is an arid region that has traditionally 
relied heavily on imported sources of water to meet its needs. Imported 
water will continue to provide most of the necessary supply. However, 
increased environmental concerns, several recent years of drought, 
limitations on the ability to further develop state water supplies, and 
other factors have caused Los Angeles to aggressively embrace water 
recycling as an integral part of its water future along with water 
conservation. Out goal is to displace up to 10 percent of our water 
supply by 2010 with recycled water.
    Mr. Chairman, the Department appreciates the opportunity to appear 
before you today to submit this statement. Thank you for your 
longstanding support of water recycling projects in Southern 
California.
                                 ______
                                 
           Prepared Statement of the Yuba County Water Agency
    The Yuba River is the third largest tributary of the Sacramento 
River, exceeded in drainage area only by the Feather and American 
Rivers. The Yuba River Basin, which lies between the Feather and 
American Rivers, drains about 1,200 square miles of the Sierra Nevada 
Mountains. Runoff enters the Feather River at the cities of Marysville 
and Yuba City, which, with adjacent communities, are in flood plains 
protected by levees.
Summary of Request
    Yuba County Water Agency requests approval of appropriations of 
$325,000 for continuing the feasibility study that is in progress by 
the US Corps of Engineers, $9,300,000 for continuing USCE levee 
restoration work, and $50,000 for advance design of higher levels of 
flood protection. Yuba County Water Agency has entered into contract to 
provide the non-federal share of the total feasibility study cost. The 
$9,300,000 is for continuing the levee restoration work in the 
Marysville-Yuba City Area. Yuba County Water Agency has entered into an 
agreement to underwrite the local non-federal share of the levee 
restoration work in Yuba County and is in the process of acquiring 
rights of way for the Project. The California Reclamation Board is 
acting as local sponsor for all of these activities. All of the 
requested appropriations are included in the President's 1998 Budget. 
Yuba County Water Agency has committed and has made available all of 
the local share of the funding for the projects being requested.
Need for Increased Flood Protection
    On 2 January 1997 one of the levees scheduled to be restored with 
the $9,300,000 appropriations being requested instantaneously failed, 
resulting in three deaths, 18,200 acres flood and $300,000,000 in 
damages.
    Since 1950 the Area has experienced seven major floods, the latest 
in January 1997, which displaced 100,000 people. These floods affected 
large areas of residential, commercial and industrial development as 
well as agricultural lands. The 1955 flood displaced 40,000 people and 
resulted in 40 deaths. The 1950 flood inundated 43,000 acres, the 1955 
63,000 acres and the 1986 10,700 acres.
    U.S. Corps of Engineers' studies show the existing levees are only 
providing about a 30 year level of protection and if restored to 
project standards will provide in the range of 60 year level of 
protection. The feasibility study is expected to show justification for 
a project that would provide 200 year level of protection.
    The Yuba is one of California's major rivers with an annual average 
unimpaired runoff of 2.4 million acre feet. The River is comprised of 
three principal forks and a number of lesser tributaries. The only 
flood control storage on the Yuba is New Bullards Bar Reservoir on the 
North Fork which provides 170,000 acre feet of flood space. The Middle 
and South Forks of the Yuba are virtually uncontrolled with regard to 
flood protection. A 1990 U.S. Corps of Engineer's study concluded that 
rather than provide flood storage for the Middle and South Forks of the 
Yuba River, higher levels of flood protection should be provided by 
enhancing the levees.
    The Yuba River watershed is steep and reacts quite rapidly to 
storms.
    Though the Marysville-Yuba City Area is increasing in commercial 
and industrial development and is experiencing an increase in new 
housing starts, the low level of flood protection is deterring 
additional economic growth that would otherwise occur. Yuba County has 
the highest welfare rate and the one of the lowest per capita income of 
any county in California. In addition to providing higher levels of 
protection to existing property, increased flood protection will 
provide economic stimulation to the Area. The levee restoration work in 
itself will create additional jobs and the Yuba County area protected 
by the levees contains the four largest employers in the County. 
Without increased levels of flood protection these jobs are in 
jeopardy.
    The levee restoration work and feasibility study to support higher 
levels of flood protection need to proceed as rapidly as possible:
  --Devastating floods can occur in any year. The longer the delay in 
        constructing needed flood facilities, the greater the risk of 
        loss of life and property, as demonstrated in January of this 
        year.
  --Construction and property costs continue to escalate.
  --Improved levels of flood protection will help stimulate the 
        depressed economy of the Area.
Local Participation
    The Yuba County Water Agency has contracted to pay the 50 percent 
non-federal share of the feasibility study and has contracted and 
committed to underwrite the local non-federal share of the levee 
restoration work in Yuba County. Yuba County Water Agency has the funds 
in a restricted reserve account to fully cover the committed costs.
Conclusion
    The Marysville-Yuba City Area of California has, since the days of 
the Gold Rush, been the commercial hub of the region. The Area has on 
numerous occasions been ravaged by floods, resulting in substantial 
loss of life and property. Though some flood protection has been 
achieved through the construction of extensive levee systems and the 
Oroville Dam on the Feather and New Bullards Bar Dam on the North Yuba, 
the current facilities are not adequate to provide a reasonable level 
of protection to the Area. The levee restoration project and the 
feasibility study will contribute to improved levels of flood 
protection to around 100,000 people and property valued at $2 billion 
within the 100 year flood plan. The Area is one of high unemployment in 
California. The lack of adequate flood protection, in addition to 
placing existing developments at risk, is restricting the development 
of potential additional job creating industrial and commercial 
enterprises.
                                 ______
                                 
    Prepared Statement of Bruce George, Manager, Kaweah Delta Water 
                         Conservation District
    Mr. Chairman and Members of the Subcommittee: My name is Bruce 
George, and I am the Manager of the Kaweah Delta Water Conservation 
District in the eastern San Joaquin Valley of California. Thank you for 
the opportunity to present testimony regarding the fiscal year 1998 
budget for the U.S. Army Corps of Engineers. This testimony is 
presented on behalf of the District, and it's co-sponsors: the City of 
Visalia, the County of Tulare, and the County of Kings.
    The President's fiscal year 1998 budget request for the Corps of 
Engineers includes $1.1 million for the continuation of preconstruction 
engineering and design (PED) of a project to increase the water storage 
capacity of Lake Kaweah at Terminus Dam California's San Joaquin 
Valley.
    The President's budget also provides $684,000 in fiscal year 1998 
dam safety funding for completion of a seismic testing and analysis 
program to verify the stability of Terminus Dam. The dam safety funding 
is included in the $2.073 million that the Corps has budgeted for 
operations and maintenance at Terminus Dam in fiscal year 1998.
    The Kaweah Delta Water Conservation District and its project 
cosponsors support the President's fiscal year 1998 budget for Terminus 
Dam and Lake Kaweah, and we respectfully request that Congress 
appropriate the $1.1 million budgeted for PED and the $2.073 for 
operations and maintenance of the project.
    The California Water Commission also supports the level of funding 
requested by the President for the Terminus enlargement project and dam 
safety program.
    Funding of the Terminus PED and dam safety programs have been 
strongly supported by Representatives Bill Thomas, Cal Dooley, and 
George Radanovich.
Terminus Dam Enlargement Project
    The Kaweah Delta Water Conservation District was formed in 1927 to 
conserve and protect the surface and groundwater of the Kaweah delta. 
The District serves 337,000 acres, which include the cities of Visalia 
and Tulare and several other incorporated and unincorporated areas in 
Kings and Tulare counties. Those two counties consistently rank among 
the most productive agricultural counties in the nation.
    Terminus Dam and Lake Kaweah, located on the Kaweah River three and 
one-half miles east of the District, were completed in 1962 by the U.S. 
Army Corps of Engineers. The purpose of the project is to provide 
storage space for flood protection and irrigation on the Kaweah River. 
The Conservation District manages the irrigation and flood control 
releases for the Kaweah River, as well as assisting in the conjunctive 
use of the surface and groundwater of the Kaweah delta.
    Rapid growth and inadequate flood protection in the region have 
created a need for greater reservoir storage space for flood control 
and irrigation storage. With a maximum capacity of 143,000 acre-feet, 
Lake Kaweah currently provides a less than 50-year level of flood 
protection for communities downstream.
    In 1988, the Corps began a feasibility study for a project to 
enlarge Lake Kaweah. The project would add approximately 43,000 acre-
feet of flood control and conservation storage space to the lake by 
widening the Terminus Dam spillway and raising it by 21 feet. The 
estimated total first cost of the project is $36 million. Bruce George 
Manager Kaweah Delta Water Conservation District .
                                 ______
                                 
  Prepared Statement of Katherine Gong Meissner, City Clerk, City of 
                              Stockton, CA
    Mr. Chairman and Members of the Committee: The City of Stockton 
supports the following Corps of Engineers and Bureau of Reclamation 
water, flood control and fishery projects:

Stockton Metropolitan Area Study and Farmington Dam 
    Evaluation..........................................        $450,000
South Delta Barriers....................................         200,000
CAL-FED Program (HR 4126)...............................     143,300,000
                        u.s. corps of engineers
Stockton Metropolitan Area Study and Farmington Dam Evaluation
    The Federal Emergency Management Agency (FEMA) completed a study of 
flood potential for the Stockton Metropolitan area. The study concluded 
that much of the Stockton Metropolitan area did not have protection 
from a 100-year flood. The affected area included all of downtown 
Stockton and the most heavily populated areas of the community.
    Although the City of Stockton and San Joaquin County pursued a 
locally funded project to restore the 100-year flood protection, U.S. 
Army Corps of Engineers' assistance was needed to review alternatives 
that would raise this level of protection and provide reimbursement for 
at least some of the locally funded expenses to at least 200 years. 
This study may also identify a multiple purpose project that could help 
resolve our inadequate water supply situation.
    Farmington Dam is an existing Corps of Engineers flood control 
project in San Joaquin and Stanislaus Counties. It is normally dry, but 
controls flows from the Little John Creek stream group during flood 
events. A project to raise the level of Farmington Dam shows the 
promise of being able to provide water to the City of Stockton via 
Stockton East Water District from its Stanislaus River Project with 
minimal additional infrastructure. The increased utilization of 
upstream reservoir storage and operational improvements at Farmington 
Dam to enhance downstream flood protection will greatly benefit our 
region.
                         bureau of reclamation
South Delta Barriers
    The California Water Commission supported a funding add-on request 
to allow the Bureau to participate with the State in constructing a 
barrier to improve water quality in the South Delta. The request came 
from the South Delta Water Agency and was supported by the City. The 
City continues its support of this project. The City's Water Quality 
Model of the San Joaquin River indicates this barrier would greatly 
enhance water quality in the vicinity of Stockton.
CAL-FED Program (HR 4126)
    The Federal funding requested will match State Proposition 204 
monies for Delta restoration. These funds will be used to offset the 
accumulated impact of the Central Valley Projects and State Water 
Projects water divisions. Although project specifics are not readily 
available at this time, it is expected that the funding would improve 
Delta Levee security, improve water quality in San Joaquin County, and 
enhance environmental habitat. The City of Stockton strongly supports 
this funding''.
                                 ______
                                 
  Prepared Statement of Carl L. Blum, Deputy Director, Department of 
                  Public Works, Los Angeles County, CA
    Summary of recommendations by Los Angeles County Department of 
Public Works concerning budget allocations to the U.S. Army Corps of 
Engineers.
    We strongly support the California Water Commission's 
recommendation to the Committee for:
  --$40 million to fund the continuing construction phase of the Los 
        Angeles County Drainage Area (LACDA) project.
  --$204,000 to fund the completion of the feasibility study for the 
        Los Angeles County Drainage Water Conservation and Supply of 
        Hansen and Lopez Dams.
  --$189,000 to fund the completion of the feasibility study for the 
        Los Angeles County Drainage Water Conservation and Supply of 
        Santa Fe and Whittier Narrows Dams.
    Mr. Chairman and Members of the Committee: We appreciate your 
Committee's continued support of critical flood control and water 
conservation projects in Los Angeles County, California.
Background for Recommendation No. 1
    Floods are a part of the history of the Los Angeles area. 
Widespread floods have periodically devastated vast areas of the region 
and were responsible for taking lives, damaging property and 
interrupting commerce and trade.
    The U.S. Army Corps of Engineers and County of Los Angeles, acting 
on behalf of the Los Angeles County Flood Control District, have built 
one of the most extensive flood control systems in the world. 
Construction of the major elements of the system began in the 1920s and 
consisted of 20 major dams, 470 miles of open channels, and many other 
appurtenant facilities. Fifteen of these major dams are owned and/or 
operated by the County while the remaining five dams (Hansen, Lopez, 
Santa Fe, Sepulveda and Whittier-Narrows), are owned and operated by 
the Corps. Since the major segments were completed, it is estimated 
that the system has prevented $3.6 billion in potential flood damage.
    Development which occurred after World War II exceeded the 
projections the Corps used in the 1930s and has increased runoff to the 
point where, even in a moderate storm, the runoff could exceed the 
design capacity of portions of the system. For example, the lower Los 
Angeles River in the City of Long Beach can only provide protection 
from a 25-year flood and came close to overtopping in 1980. A storm of 
greater magnitude would have a tremendous impact, both personal and 
economic, on Los Angeles County, the nation's second largest 
metropolitan area.
    At the request of the County of Los Angeles, the U.S. Army Corps of 
Engineers analyzed the adequacy of the existing major flood control 
facilities serving the Los Angeles basin in the LACDA Review study. In 
1990, a Project to upsize a portion of the LACDA system received 
Congressional approval subject to a favorable report by the Chief of 
Engineers (received in 1995), and signature of the Record of Decision 
by the Secretary of the Army, which was obtained in July 1995.
    The final report by the Corps identified 100-year flood damages 
totaling $2.25 billion covering an 82-square-mile area which houses 
over 500,000 people. These damages would occur in the heavily-urbanized 
Los Angeles basin, where adequate protection from a 100-year flood was 
previously provided.
    The LACDA project is a critical modification to existing 
facilities. Obtaining funds to do the modification is critical for two 
reasons: first, because of the threat of flooding to over one-half 
million people; and second, because FEMA is in the process of 
finalizing Flood Insurance Rate Maps (FIRMs) for the area that would be 
affected by overflows from the lower Los Angeles River and Rio Hondo 
Channel. The financial impact on the affected property owners could 
reach as high as $131 million annually for flood insurance premiums. 
Any delay in construction causes a great financial hardship on 
thousands of people, who thought the existing river provided adequate 
protection and will now need to buy flood insurance until such a 
project is completed. An economic impact study done by the University 
of Southern California also indicated that failure to construct the 
needed flood control measures will result in the loss of as many as 
120,000 jobs. Economic losses in the region of over $30 billion over a 
10-year period could also be realized due to stringent building 
restrictions.
    This project, currently estimated to cost approximately $240 
million, is scheduled, pending adequate funding, to be completed within 
the next five years. The 1994-95 budget included $500,000 to initiate 
the first construction contract awarded in September 1995. The 1995-96 
budget included $11.3 million to continue the first contract. The 
current 1996-97 budget includes $14.4 million to complete the first 
contract and two new construction contracts awarded in August and 
September of 1996. Two additional construction contracts will be ready 
to award later this fiscal year. In order to complete the project 
within the five-year schedule, it is critical to move the level of 
construction activity to the $50 million a year level. As a result, we 
strongly support the California Water Commission's recommendation for 
$40 million of Federal funds to continue construction of the LACDA 
Project ($10 million will be provided by the local sponsor).
Background for Recommendations 2 & 3
    Since their inception, the majority of the County's 15 dams have 
performed a dual role. In addition to flood control, our facilities 
have also been used to capture local storm runoff to assist in 
recharging our underground aquifers. With the exception of the 
Whittier-Narrows Dam, Corps facilities are not used to assist in 
groundwater recharge activities. Increased demands on our existing 
water supply system have shown the need of integrating local resources 
to better manage our local water supplies.
    While the County captures much of the water flowing within our 
flood control system, 280,000 acre-feet on average is discharged to the 
Pacific Ocean each year from the Los Angeles River. Since 1985, the 
County has been working to improve its existing water conservation 
system. The utilization of certain Corps facilities could be an 
integral part of this system by storing significant amounts of this 
lost runoff.
    In 1993, Congress authorized the Corps to initiate a reconnaissance 
study to determine the viability of increased use of Corps facilities 
for water conservation. The study looked at establishing water 
conservation pools at Hansen, Lopez, and Santa Fe Dams, and increasing 
the existing water conservation pool at Whittier Narrows Dam. The 
utilization of these facilities would benefit many of the groundwater 
basins in the County. A secondary benefit would be realized by helping 
to dilute the groundwater pollution that currently threatens many water 
supply wells within these basins.
    In May 1994, the Corps' reconnaissance study was completed. 
Preliminary benefit-cost ratios range from 2.2 to 19.0 for the four 
study sites, and the annual economic benefits range from $622,700 to 
$6,463,000. Overall, the four reservoirs could potentially conserve 
nearly 17,000 acre-feet annually of additional storm runoff, enough 
water to serve the annual needs of nearly 136,000 people. The study 
concluded that two feasibility studies were warranted: one for the 
Hansen Dam-Lopez Dam system, the other for the Santa Fe Dam-Whittier 
Narrows Dam system. The Corps began these feasibility studies in 
January 1995 with Los Angeles County as the local sponsor. Each 
feasibility study was to be conducted over a four-year period at a 
total cost of $4.66 million ($2.24 million for the Hansen-Lopez system 
and $2.42 million for the Whittier Narrows-Santa Fe system). The County 
will contribute 50 percent of the necessary funds. Currently, we are in 
the third of this four-year schedule and anticipate completing both 
feasibility studies by early 1998.
    We strongly support the amount included in the President's budget 
and supported by the California Water Commission for the 1998 fiscal 
year for the Hansen-Lopez study and the Whittier Narrows Santa Fe 
study.
    We appreciate your Committee's continued support in addressing 
these critical concerns in the Los Angeles County area of Southern 
California.
                                 ______
                                 
  Prepared Statement of the Riverside County Flood Control and Water 
              Conservation District, Board of Supervisors
   resolution no. f97-2 supporting federal appropriations for flood 
                 control projects for fiscal year 1998
    WHEREAS, the United States House of Representatives Committee on 
Appropriations, Sub-Committee on Energy and Water Development, and the 
United States Senate Committee on Appropriations, Sub-Committee on 
Energy and Water Development are holding hearings to consider 
appropriations for Flood Control and Reclamation Projects for fiscal 
year 1998 and have requested written testimony to be submitted to the 
committees prior to March 31, 1998; and
    WHEREAS, the Riverside County Flood Control and Water Conservation 
District (District) supports the continuation of construction of the 
Santa Ana River Mainstem project, the completion of design and 
initiation of construction for the project to reduce flooding and bank 
destruction along the Santa Ana River at Norco Bluffs, California, the 
initiation of land acquisition for the Section 1135 environmental 
enhancement project at Gunnerson Pond, Lake Elsinore, California, the 
continuation of a flood plain maintenance plan study for Murrieta 
Creek, Riverside County, California, under the Section 22 Planning 
Assistance to States program, the completion of cost sharing for the 
Lake Elsinore Outlet Channel Project, the initiation of a flood control 
reconnaissance study for the San Jacinto River, and the initiation of 
feasibility studies for flood control needs in the Murrieta Creek sub 
basin of, and a watershed management plan within, the Santa Margarita 
River watershed in Riverside and San Diego Counties, California; now, 
therefore,
    BE IT RESOLVED by the Board of Supervisors of the Riverside County 
Flood Control and Water Conservation District in regular session 
assembled on February 18, 1997, that they support appropriations by 
Congress for fiscal year 1998 for the following projects:

U.S. Army Corps of Engineers:
    Construction--General--Santa Ana River Mainstem.....     $52,900,000
    Construction--General--Santa Ana River at Norco 
      Bluffs............................................       1,500,000
    Section 1135, Environmental Enhancement Projects--
      Lake Elsinore, Gunnerson Pond.....................       2,100,000
    Section 22, Planning Assistance to States--Murrieta 
      Creek Floodplain Maintenance Plan.................          50,000
    Section 205, Small Flood Control Projects--Lake 
      Elsinore Outlet Channel, Federal Cost Share.......       2,000,000
    Reconnaissance Study--Flood Control and Other 
      Purposes--San Jacinto River.......................         350,000
    Feasibility Study--Flood Control--Murrieta CreekSub-
      basin, Santa Margarita River Basin................         300,000
    Feasibility Study--Watershed Management--Santa 
      Margarita River Basin.............................         300,000

    BE IT FURTHER RESOLVED that the General Manager-Chief Engineer is 
directed to distribute certified copies of this resolution to the 
Secretary of the Army, Members of the House of Representatives 
Committee on Appropriations and Sub-Committee on Energy and Water 
Development, the Senate Committee on Appropriations and Sub-Committee 
on Energy and Water Development, and the District's Congressional 
Delegation--Senators Dianne Feinstein and Barbara Boxer, and 
Congressmen Ron Packard, Ken Calvert and Sonny Bono.
                       santa ana river--mainstem
    The Water Resources Development Act of 1986 (Public Law 99-662) 
authorized the Santa Ana River--All River project which includes 
improvements and various mitigation features as set forth in the Chief 
of Engineers' Report to the Secretary of the Army. The Boards of 
Supervisors of Orange, Riverside, and San Bernardino Counties continue 
to support this critical project as stated in past resolutions to 
Congress.
    The Local Cooperation Agreement (LCA) was signed in December 1989 
by the three local sponsors and the Army. The first of five 
construction contracts started on the Seven Oaks Dam feature in the 
Spring of 1990, with completion scheduled by the year 2000. Acquisition 
has been completed on enhancement lands near the mouth of the river 
channel and the local sponsors continue acquisition for other elements 
of the project. Significant construction has been completed on the 
lower Santa Ana River Channel, Oak Street Drain, the Mill Creek Levee 
and San Timoteo Creek.
    We support the President's recommendation to appropriate $52.9 
million for the Santa Ana Mainstem construction and urge the Committee 
to approve the funds in the fiscal year 1998 appropriations.
                    santa ana river at norco bluffs
    The Santa Ana River passes along the northerly border of the city 
of Norco which is situated on a bluff that forms the southerly bank of 
the river. The bluff varies in height from 46 to 96 feet above the 
streambed. The floods of January and February 1969 caused flow 
impingement on the river bank which undermined the toe of the slope, 
causing bank sloughing. Although 50 to 60 feet of the bluff retreated 
to the south, no improvements were lost but the threat to improvements 
from future river actions became apparent. The floods of 1978 and 1980 
impinged further, causing another 30 to 40 feet of bluff retreat, and 
the loss of a single family residence.
    Section 101 (b)(4) of the Water Resources Development Act of 1996 
provides for the authorization of the project, based on a Chief's 
Report dated December 23, 1996 that recommends the project for 
construction.
    We are requesting Congress, through the Committee, to appropriate 
$1,500,000 in fiscal year 1998 to provide sufficient Federal funding to 
initiate construction in fiscal year 1998 on the Santa Ana River at 
Norco Bluffs project. The Riverside County Flood Control and Water 
Conservation District is fully prepared to meet its cost sharing 
obligation.
                       santa margarita watershed
    The Santa Margarita Watershed lies in the south and northwesterly 
areas of Riverside and San Diego Counties, respectively. Murrieta Creek 
passes through the cities of Murrieta and Temecula in Riverside County, 
then combines with Temecula Creek to form the Santa Margarita River 
which flows into San Diego County, through the Camp Pendleton Marine 
Base, and into the Pacific Ocean.
    Murrieta and Temecula experienced severe flood damage in January 
1993, estimated in excess of ten million dollars, from Murrieta Creek 
overflow. Camp Pendleton also suffered extensive flood damage to 
facilities and aircraft due to overflow of the Santa Margarita River.
    The requested Feasibility Study is needed to define and scope 
alternatives and develop a recommended watershed plan. The feasibility 
effort will address watershed management, including flood control, 
environmental restoration, water conservation and supply, recreation, 
and related purposes.
    We request the Committee to approve $300,000 in fiscal year 1998 
appropriations as is included in the Administration's Budget to 
undertake a Feasibility Study on the Santa Margarita Watershed.
                             murrieta creek
Feasibility Study
    In January of 1993, due to dramatic winter storms, Murrieta Creek 
overflowed its banks and caused 10 million dollars in damages in the 
cities of Murrieta and Temecula. Prior to that time, and continuing 
today, a coalition of local citizens, community leaders, 
environmentalists, and developers have worked with the District to 
identify solutions to the flood problem.
    This $300,000 in requested funding is needed to pursue a 
Feasibility Study for flood control along Murrieta Creek.
Section 22, Planning Assistance to States
    The District is also seeking the Corps' assistance in the continued 
development of a flood plain maintenance plan for Murrieta Creek, under 
the Section 22, Planning Assistance to the States authority. The plan, 
which currently involves the Corps of Engineers working cooperatively 
with the District and regulatory agencies, will provide an agreed upon 
plan for creek maintenance to assure maximum flood protection within 
the limitations of the existing flood control system and the riparian 
environment.
    We request the Committee to approve a fiscal year 1998 
appropriation of $50,000 under the authority of Section 22, Planning 
Assistance to the States, in order to complete work on the flood plain 
maintenance plan.
                             gunnerson pond
    In 1995, the Corps of Engineers, Los Angeles District, began an 
investigation under Section 1135 to evaluate the possibility of a 
wetlands restoration project at Gunnerson Pond. The site is located 
north of the city of Lake Elsinore, at Gunnerson Pond, adjacent to and 
downstream of the Corps-built Lake Elsinore Outlet Channel, a Section 
205 project.
    The proposed modification of the outlet channel would allow flood 
water from Lake Elsinore and discharge from a nearby wastewater 
treatment plant to flow into Gunnerson Pond, creating a permanent 
wetland in that area. The purpose of this modification would be to 
enhance and develop waterfowl habitat, endangered species habitat, 
emergent wetlands vegetation, and riparian vegetation. The proposed 
project would significantly expand and enhance existing wetland and 
riparian areas along the Temescal Creek flood plain.
    The Corps Headquarters approved the Preliminary Restoration Plan in 
August 1996 and the Project Modification Report which will provide 
final definition of the project is in progress.
    We request the Committee to approve $2,100,000 in fiscal year 1998 
appropriations to initiate plans and specifications and acquisition of 
critical wetlands and riparian area for the Gunnerson Pond project 
under the authority of Section 1135, within available funds.
                             lake elsinore
    The Lake Elsinore flood control project was funded and constructed 
under the Section 205 Small Flood Control Projects authority. In order 
to bring the project costs back to 50 percent federal/50 percent local, 
Section 306 of the Water Resources Development Act of 1996 directed the 
Secretary to revise the project cooperation agreement to increase 
federal costs to $7,500,000.
    In accordance with Section 306 (WRDA 96), we are requesting the 
Committee approve $2,000,000 in fiscal year 1998 appropriations for the 
Lake Elsinore project.
                           san jacinto river
    The San Jacinto River watershed encompasses approximately 730 
square miles, that drains into Lake Elsinore in western Riverside 
County. The river originates in the San Jacinto Mountains and passes 
through the cities of San Jacinto, Perris, Canyon Lake and Lake 
Elsinore. The only major flood control structure on the river are 
levees in the city of San Jacinto built by the Corps of Engineers in 
the early 1960's. In the 30 mile reach of the river between Lake 
Elsinore and the city of San Jacinto, only minor channelization exists 
and the river is characterized by expansive overflow areas. Flooding by 
the river has caused major damage to agricultural areas and has 
rendered Interstate 215 and several local arterial transportation 
routes impassable. The river is an important resource that provides 
water supply, wildlife habitat, drainage and recreation values to the 
region.
    The District is requesting that the Corps of Engineers conduct a 
reconnaissance study of the San Jacinto River between the city of San 
Jacinto and the city of Lake Elsinore to investigate whether there is a 
federal interest in flood control, environmental enhancement, water 
conservation and supply, recreation and related purposes.
    Because of the size of the study area and the large scope of the 
study issues, we request the Committee to approve $350,000 in fiscal 
year 1998 appropriations to undertake a Reconnaissance Study on the San 
Jacinto River.
                                 ______
                                 
    Prepared Statement of W. Ben Wicke, President, Elsinore Valley 
                        Municipal Water District
    Mr. Chairman, as President of the Board of Directors of Elsinore 
Valley Municipal Water District, Lake Elsinore, California, I 
appreciate the opportunity to provide the Appropriations Committee with 
information regarding the Temescal Valley Project. The Temescal Valley 
Project is a public works water project which is being sponsored by 
Elsinore Valley Municipal Water District to develop and manage local 
water resources and to improve the economy of western Riverside County 
and southern California.
    The importance of this project as we plan for the next century 
cannot be overstated. It will ensure the ability of the District to 
meet the growing water requirements of an expanding population in 
southern California while preserving the existing water resources on 
which agriculture has relied for over a century. The project has been 
conceived in a manner which will keep impacts to the environment to an 
absolute minimum. Approximately 6,000 acres of citrus are under 
production in this area. Much of the crop is exported to trading 
partners in the Pacific Rim, which has a positive effect on the balance 
of trade with these countries.
    The Elsinore Valley Municipal Water District's Temescal Valley 
Project was funded $4.7 million in the 1997 Federal budget and has been 
allocated $2.0 million, including the Treasury Department's portion for 
1998. Design for the initial phases of the project is complete and it 
is anticipated that construction will start in the third quarter of 
1997.
    In accordance with the funding and allocation projects agreed to by 
the NWRA Committee, it is requested that support be given for $2 
million, including both the Bureau of Reclamation and Treasury shares 
for the fiscal year 1998 budget. This will allow Elsinore Valley 
Municipal Water District to continue the Temescal Valley construction 
through budget year 1998.
                                 ______
                                 
Prepared Statement of Donald R. Kendall, Ph.D., P.E., General Manager, 
                   Calleguas Municipal Water District
    Mr. Chairman and Members of the Subcommittee, thank you for the 
opportunity to submit this written statement regarding the U.S. Bureau 
of Reclamation appropriations for fiscal year 1998. Calleguas Municipal 
Water District is requesting $2 million in the Bureau's appropriations 
under the authorization of Title XVI of Public Law 102-575 and the 
specific project authorization (Public Law 104-266) for the Calleguas 
Municipal Water District water recycling project.
                   calleguas municipal water district
    The District was formed in 1953 by a popular vote of its residents. 
The District is located in Ventura County and its service area is 
approximately 350 square miles. Communities within the District service 
area include: Oxnard, Camarillo, Thousand Oaks, Simi Valley, Moorpark, 
and Port Hueneme. The District is governed by a five-member elected 
Board of Directors. The District is a member agency of The Metropolitan 
Water District of Southern California (Metropolitan). The District 
imports from Metropolitan about 100,000 acre-feet annually from the 
State Water Project (Bay-Delta) supplies.
                           water supply needs
    The District's service area is very dependent on imported water 
from northern California. Rapid population growth and urban development 
is expected to increase the need for an additional 50,000 acre-feet of 
imported water by the year 2020, if recycled water supplies are not 
developed. In the context of the CALFED Bay-Delta Program, it is 
imperative that alternative local supplies (recycled water) be 
developed to reduce the need for imported water.
                          program description
    The District proposes to implement a regional water reuse and 
recycling program. The principal objectives of the proposed program are 
to:
  --Increase the reliability of water supplied to water purveyors 
        within the District's service area.
  --Assist water purveyors and regulators in achieving regional 
        solutions to meeting wastewater discharge requirements 
        (Calleguas Creek Watershed Study).
  --Provide the facilities necessary to achieve long-term salt balance 
        in the region.
    The project as envisioned is, in fact, made up of several water 
recycling projects which include wastewater reclamation and groundwater 
recovery projects which will use reverse osmosis (RO) technology for 
demineralization. The treatment facilities will be connected by a Brine 
Disposal Pipeline designed to collect the concentrated effluent from 
the various demineralization facilities which are planned. A map of the 
preliminary facilities is shown in Figure 1.
    The source of water for the wastewater reclamation project are some 
eight wastewater treatment plants located throughout the District's 
service area.
    The source water for the RO treatment plants will be local brackish 
groundwater high in total dissolved solids (TDS). Most of the area is 
underlain by two aquifer systems and generally the upper aquifer system 
is high in TDS as a result of over extraction, the concentration 
effects of agricultural use, and discharges from the local publicly 
owned treatment works (POTW) that percolate to the upper aquifer 
system. The product water from the RO treatment plants will be blended 
with the local groundwater to meet drinking water standards or with 
imported water obtained by Calleguas from the Metropolitan Water 
District of Southern California.
    The water which would be developed through these programs will 
provide a wide range of beneficial potable and non-potable uses and 
will substantially reduce the region's demand for additional imported 
water supplies. Table 1 summarizes each of the projects in terms of 
project costs and yield. Figure 1 presents the location of the proposed 
recycled water projects. The time frame considered for project 
implementation extends through the year 2020. These projects include:
                   calleguas water recycling program
    Wastewater reclamation.--Simi Valley Wastewater Reclamation 
Project; Camarillo Wastewater Reclamation Project; Oxnard Wastewater 
Reclamation Project/Seawater Intrusion Barrier Project; and Moorpark 
Recycled Water Project.
    Groundwater recovery.--South Las Posas Basin Desalter; and Thousand 
Oaks Blending Project.
    Regional brine disposal line.--Calleguas Creek Wastewater Watershed 
Management Issues; and Calleguas Creek Watershed Management ``Net 
Environmental'' Benefit.

 TABLE 1.--CALLEGUAS MUNICIPAL WATER DISTRICT SUMMARY OF WATER RECYCLING
                    PROJECTS, YIELD AND CAPITAL COSTS                   
------------------------------------------------------------------------
                                                              Estimated 
                                                   Project     project  
       Project name/phase          Project code     yield      capital  
                                                    (AFY)       costs   
------------------------------------------------------------------------
Wastewater Reclamation:                                                 
    Simi Valley Wastewater                                              
     Reclamation Project:                                               
        Phase I................  RW.01.01.......       250    $1,500,000
        Phase II...............  RW.01.02.......     3,250    15,000,000
        Phase III..............  RW.01.03.......     1,500     8,500,000
                                ----------------------------------------
          Subtotal.............  ...............     5,000    25,000,000
                                ========================================
    Conejo Diversion Project                                            
     (Hill Canyon Wastewater                                            
     Reclamation Project):                                              
        Phase I................  RW.02.01.......     6,000    16,500,000
        Phase II...............  RW.02.02.......     8,000     9,500,000
                                ----------------------------------------
          Subtotal.............  ...............    14,000    26,000,000
                                ========================================
    Camarillo Wastewater                                                
     Reclamation Project:                                               
        Phase I................  RW.03.01.......     1,710     1,200,000
        Phase II...............  RW.03.02.......     1,130     3,000,000
                                ----------------------------------------
          Subtotal.............  ...............     2,840     4,200,000
                                ========================================
    Oxnard Wastewater                                                   
     Reclamation Project:                                               
        Phase I................  RW.04.01.......     5,000    45,000,000
        Phase II...............  RW.04.02.......     5,000    10,000,000
        Phase III..............  RW.04.03.......    10,000     5,000,000
                                ----------------------------------------
          Subtotal.............  ...............    20,000    60,000,000
                                ========================================
Oak Park/North Ranch Wastewater  RW.05.02.......       750     1,750,000
 Reclamation System Expansion:                                          
 Phase II.                                                              
    Moorpark Wastewater                                                 
     Reclamation Project:                                               
        Phase I................  RW.06.01.......       757     3,000,000
        Phase II...............  RW.06.02.......       953  ............
                                ----------------------------------------
          Subtotal.............  ...............     1,710     3,000,000
                                ----------------------------------------
          Total Wastewater       ...............    44,300   119,950,000
           Reclamation.                                                 
                                ========================================
Brackish Groundwater Recovery                                           
 Project:                                                               
    South Las Posas Brackish                                            
     Groundwater Recovery                                               
     Project...................  GW.01.01.......     5,258    11,500,000
    West Simi Valley Brackish                                           
     Groundwater Recovery                                               
     Project...................  GW.02.01.......     3,382     7,100,000
    Thousand Oaks Brackish                                              
     Groundwater Recovery                                               
     Project...................  GW.03.01.......       900       300,000
                                ----------------------------------------
      Total Brackish                                                    
       Groundwater Recovery                                             
       Projects................  ...............     9,540    18,900,000
                                ========================================
Regional Brine Disposal:                                                
    Regional Brine Disposal                                             
     Pipeline:                                                          
        Phase I................  BD.01.01.......  ........    18,250,000
        Phase II...............  BD.01.02.......  ........     4,250,000
                                ----------------------------------------
          Total Regional Brine                                          
           Disposal Pipeline...  ...............  ........    22,500,000
          Program Total........  ...............    55,840   161,350,000
------------------------------------------------------------------------

                            program benefits
    The Program will provide the following benefits:
    Enhanced Reliability and Economic Vitality.--By enhancing and 
preserving the local sources of supply, the project will provide an 
increased measure of water supply reliability in the event of 
curtailment of imported water deliveries due to drought or earthquake. 
This reliability will ensure adequate supplies for thousands of area 
families and that the region will continue to meet the water needs of 
various industries. Moreover, the project will guarantee a long-term 
water supply for agricultural operations in the region. Agricultural 
activities in this region account for a considerable portion of Ventura 
County's total annual economy valued at $4 billion.
    Resource Conservation.--Groundwater replenishment of the various 
aquifer systems underlying the Calleguas' service area will alleviate 
the prevailing overdraft condition and will also aide in the mitigation 
and prevention of further seawater intrusion.
    Increased Level of Independence.--Since the early 1960's, much of 
urbanized Ventura County has become exceedingly reliant upon imported 
State water deliveries. The program will assist the region in 
maximizing beneficial use of local water resources thereby decreasing 
the region's precarious dependence on unpredictable, imported water 
deliveries.
    Cost Avoidance.--Presently, the California Regional Water Quality 
Control Board, Los Angeles Region, is evaluating whether to require the 
City of Oxnard to expand its ocean outfall facility. If expansion is 
required, it is estimated that the cost incurred by the city would be 
on the order of $50 million. Implementation of the Oxnard Wastewater 
Reclamation project and others will reduce the amount of effluent being 
discharged to the Pacific Ocean. The reduction of the volume of 
effluent being discharged through the ocean outfall will free-up ocean 
outfall capacity which may be used for regional brine disposal.
    Delta Protection.--Moreover, development of the project could 
potentially benefit biological resources in the Sacramento/San Joaquin 
Delta region due to reduced demands for imported State water. To the 
degree that reclaimed water would be utilized to supplant imported 
deliveries, an equivalent amount of water could remain in the Delta to 
aid in sustaining sensitive species and habitat.
                            program phasing
    The proposed recycled water program will comprise of several water 
reuse projects, several of which will be implemented in phases. The 
capital costs of the proposed program is estimated at $161.35 million 
(see Table 1). It is anticipated that all or most of the projects will 
be implemented by the year 2010. The annual water supply yield of the 
proposed program is shown on the graph below and cumulative capital 
expenditures and the program annual water supply yield.
    Several of the projects such as Phase I of the Simi Valley 
Reclamation Project the Oak Park/North Ranch Wastewater Reclaimed Water 
System Expansion, and others are in the advance stages of 
implementation. For those projects, feasibility studies and NEPA/CEQA 
Compliance documentation have been completed and can, therefore, be 
implemented in 1998. The remainder of the projects will require 
additional studies and NEPA/CEQA Compliance documentation prior to 
implementation.
[GRAPHIC] [TIFF OMITTED] TKEN.000


[GRAPHIC] [TIFF OMITTED] TKEN.001

                         program financing plan
    The potential funding sources which have been identified to finance 
the implementation of the proposed water recycling program included: 
$20 million USBR Grant; $20 million Proposition 204 Water Recycling 
Loan; Recycled Water Sales--Wholesale; and Metropolitan Water District 
of Southern California Local Projects Program Rebate.
    The following table provides a summary of the program economics 
with the $20 million USBR Grant and the $20 million Proposition 204 
Water Recycling Loan.

            Financial Feasibility of Recycled Water Program

               [With USBR Grant and Proposition 204 Loan]

Program funding using USBR grant and proposition 204 
    loan:
    Project Capital costs...............................   $161,350,000 
    Less USBR grant.....................................   ($20,000,000)
    Less proposition 204 water recycling loan...........   ($20,000,000)
    Project Capital costs less grants and loans.........   $121,350,000 
    Project life cycle period (years)...................              20
    Capital recovery rate (percent).....................             7.0
                    --------------------------------------------------------
                    ____________________________________________________
    Annualized Capital cost.............................    $11,454,227 

----------------------------------------------------------------------------------------------------------------
                                                                                  Rate,   Terms,    Annual debt 
                         Funding source                              Amount      percent   years      service   
----------------------------------------------------------------------------------------------------------------
Proposition 204 water recycling loan repayment funding:                                                         
 Proposition 204 water recycling loan..........................     $20,000,000    3.50       20      $1,480,000
----------------------------------------------------------------------------------------------------------------

Debt service:
    Annualized Capital costs............................    $11,454,227 
    Proposition 204 water recycling loan................     $1,480,000 
                    --------------------------------------------------------
                    ____________________________________________________
        Total debt service..............................    $12,934,227 
                    ========================================================
                    ____________________________________________________
Total annual program costs:
    Total annual debt service...........................    $12,934,227 
    Annual operation and maintenance costs..............     $3,500,000 
                    --------------------------------------------------------
                    ____________________________________________________
        Total annual program costs......................    $16,434,227 
                    ========================================================
                    ____________________________________________________
Other revenue source:
    Recycled water sales (80 percent of potable water 
      rate--$515) (per acre-foot).......................           $412 
    Metropolitan local projects program rebate (per 
      acre-foot)........................................           $250 
                    ========================================================
                    ____________________________________________________
Revenue/program cost analysis:
    Average annual water sales (period between 1997 
      through 2020) (acre-feet per year)................          25,000
    Annual revenue from water sales (per year)..........    $10,300,000 
    Annual revenue from Metropolitan LPP rebates (per 
      year).............................................     $6,250,000 
    Annual program costs (debt plus O&M costs) (per 
      year).............................................   ($16,434,227)
                    --------------------------------------------------------
                    ____________________________________________________
    Annual revenue/(deficit) (per year).................       $115,774 
                        need for federal funding
    As demonstrated in the previous section, the viability of the 
program is dependent on the ability of the District to secure USBR and 
Proposition 204 project funding assistance.
    Without USBR and Proposition 204 project funding assistance, there 
is a demonstrable funding shortfall and negative cash flow of over $2 
million per year. Therefore, the economic viability of the water 
recycling program is contingent on federal funding assistance
                                 ______
                                 
     Prepared Statement of Anthony C. Volante, President, Board of 
                  Directors, Port Hueneme Water Agency
    Chairman and members of the Subcommittee, the Port Hueneme Water 
Agency (Agency) was formed by the City of Port Hueneme and the Channel 
Islands Beach Community Services District in July of 1994 as a Joint 
Powers Agency, governed under the laws of the State of California. The 
Agency wishes to solicit the Subcommittee's support for our request of 
$2.0 million in cooperative funding from the United States Bureau of 
Reclamation for a Brackish Water Reclamation Demonstration Facility 
(BWRDF) during Federal fiscal year 1998.
Project Summary
    The Agency was formed to plan, coordinate, develop, finance, 
construct and operate a BWRDF and related water distribution pipeline 
network for its member agencies: City of Port Hueneme (COPH), Channel 
Islands Beach Community Services District (CIBCSD), Naval Construction 
Battalion Center (NCBC)--Port Hueneme, and Naval Air Weapons Stations 
(NAWS)--Point Mugu. All of these agencies are located along the 
southwestern coast of Ventura County and currently utilize local 
groundwater and/or groundwater imported by the United Water 
Conservation District (UWCD) from an inland recharge area for the 
Oxnard Plain Basin. The Basin is in an overdraft condition which has 
also induced seawater intrusion. The total dissolved solids level of 
these water sources is normally greater than 1000 mg/L.
    To provide high quality water, the Agency is implementing a Water 
Quality Improvement Program (WQIP). The WQIP involves demineralization 
of the imported groundwater which will be used conjunctively with 
imported State Project Water delivered by the Calleguas Municipal Water 
District (CMWD), a member agency of the Metropolitan Water District of 
Southern California (MWD). The Agency has annexed to both CMWD and MWD. 
Local groundwater pumping along the coast would be eliminated and total 
groundwater extractions will be reduced.
    The BWRDF is the cornerstone of the program to improve water 
quality and reliability, reduce groundwater extractions and seawater 
intrusion in the Oxnard Plain, and provide a reliable long-term water 
supply for our four member agencies. The BWRDF will not only provide 
high quality water, it will also provide a full-scale demonstration of 
side-by-side operation of the three most promising brackish water 
desalination technologies which are reverse osmosis, nanofiltration, 
and electrodialysis reversal. The BWRDF will provide a realistic 
comparison of the desalination technologies which can then be utilized 
by water purveyors across the country to determine which technology 
best suites their specific needs.
    In accordance with Section 1605 of Public Law 102-575 (Reclamation, 
Wastewater and Groundwater Study and Facilities Act), the Agency and 
the United States Bureau of Reclamation (USBR) have executed 
Cooperative Agreement No. 1425-6-FC-30-00850 (Agreement) on 19 
September, 1996. This authorization allows USBR to provide cooperative 
funding of $3.7 million. To date, the Agency has requested and received 
appropriations of $1.0 million in fiscal year 1996 and $1.0 million in 
fiscal year 1997. For fiscal year 1998, the Agency would like to 
request the continued support of the USBR for this innovative program 
by requesting the remaining $1.7 million provided for under the 
Cooperative Agreement. In addition, $0.3 million is requested to allow 
ongoing USBR support, including a feasibility study of using 
desalination concentrate for wetlands enhancement. Accordingly, the 
Agency solicits the continued support of the Subcommittee for our 
request of $2.0 million for fiscal year 1998.
Project Background
    Currently, the COPH, CIBCSD, NCBC, and NAWS utilize brackish 
groundwater from the Oxnard Plain Groundwater Basin, which is listed in 
California Department of Water Resources Bulletin 118 as a critically 
overdrafted basin and is under active basin management by the Fox 
Canyon Groundwater Management Agency. The groundwater used by these 
agencies is extracted locally from deep aquifer wells increasingly 
subject to seawater intrusion along the coast, or delivered from upper 
aquifer wells located inland by the UWCD. Both groundwater sources are 
deemed brackish, in that they have a total dissolved solids (TDS) 
content of greater than 1000 mg/l and a hardness in excess of 500 mg/l. 
By comparison, water quality in the Washington, D.C. urban area 
averages 217 mg/l, TDS and 126 mg/l in hardness.
    The Agency was formed to secure a safe, reliable, high quality, 
environmentally sound and economical water supply for its member 
agencies. Prior to the formation of the Agency, increasing overdraft of 
the local groundwater basin, seawater intrusion, poor water quality and 
aging infrastructure had prompted each of the aforementioned 
participants to independently pursue water supply and quality 
improvement projects.
Facility Description
    The Agency's project involves the construction of a 3.0 million 
gallon per day (mgd) sub-regional water treatment plant, the BWRDF, and 
various transmission pipelines to deliver a blend of desalinated local 
brackish groundwater and a limited amount of imported State Project 
Water. The primary source of local brackish groundwater is highly 
mineralized. To treat this water, a combination of three most promising 
desalination technologies will be used. These technologies include 
reverse osmosis, nanofiltration, and electrodialysis reversal. State 
Water Project water will be blended with desalinated local groundwater 
through existing and proposed transmission pipelines. To optimize the 
utilization of the water treatment facilities, the proposed plant's 
capacity is based on current minimum diurnal water demands of the 
project participants. Peak day and fire flow demands will be met by the 
State Water Project water deliveries.
    When all the program elements are in place, the PHWA will use a 
mixture of one-third imported State Project Water and two-thirds 
desalinated local groundwater. This arrangement will allow the PHWA to 
maximize use of local resources while providing excellent water quality 
to its customers.
    The construction and operation of the BWRDF will provide a unique 
opportunity for the Federal government to enter into an innovative 
Federal-State-Local partnership with California water agencies in order 
to obtain long-term economic and performance data from the operation of 
a full-scale, groundwater desalination treatment facility in Ventura 
County, California. To the best of our knowledge, there are no such 
full-scale facilities operating in the United States simultaneously 
using these desalination technologies
Proposed Wetlands Enhancement Feasibility Study
    The BWRDF will be located near a coastal wetlands at Ormond Beach 
(Oxnard, California). The coastal wetlands at Ormond Beach has received 
significant public interest and is considered to be at risk by regional 
flood control considerations. The littoral system of the Ormond Beach 
area builds a sand barrier that separates the surf zone from inland 
portions of the beach, wetlands, and developed inland areas. Up until 
1992, the Ventura County Flood Control District would periodically 
breach the sand barrier to drain the lagoon to maintain safe water 
levels in the discharge drains. Cessation of this action resulted in 
the expansion of the lagoon but also created a deep water condition in 
the flood control channels. Water levels in the Hueneme Drain, ``J'' 
Street Drain, and Oxnard Industrial Drain (OID) reached a maximum level 
of 7.2 feet in September 1994. At this water level, several adverse 
consequences occurred and included: the OID overtopped its banks and 
resulted in the flooding of adjacent properties; channels at this water 
level could not safely convey flood waters in the event of a heavy 
rainstorm and had potential to result in a severe flood hazard; soils 
became saturated and created unstable conditions for the nearby land 
uses; and bacteria and mosquitoes bred in the abundant warm water, 
causing a human health hazard.
    One of the key issues to the enhancement of this wetlands resource 
appears to be providing an acceptable source of water to maintain water 
levels in the Ormond Beach lagoons. Accordingly, the PHWA would like to 
conduct a feasibility study to enhance the Ormond Beach wetlands. The 
study would evaluate the feasibility of using the BWRDF concentrate to 
maintain water levels in the wetlands as well as whether its 
composition would be toxic or inhibitory to the wetlands ecosystem.
    The study would be conducted at the BWRDF site. Using holding 
tanks, researchers would simulate the ecosystems found in the Ormond 
Beach Lagoon and wetlands and would analyze the effects of the 
desalination concentrate. This study would provide valuable information 
concerning the toxicity of the concentrate on sensitive plant and 
animal species without harming or disrupting the lagoon or the 
wetland's sensitive ecosystems. The study would also address the 
hydrology and hydrodynamics of the wetland and lagoon. Depending on the 
results of the study a demonstration project which utilizes the 
concentrate for wetlands enhancement could be implemented. The use of 
desalination concentrate for wetlands enhancement also has the 
potential to allow development of a regional flood control system which 
would be in harmony with this coastal resource.
    The study would be conducted by PHWA, United States Bureau of 
Reclamation, and National Biological Survey. Funding for the study is 
authorized under Section 1605 of Public Law 102-575 (Reclamation 
Wastewater and Groundwater Study and Facilities Act).
Project Benefits
    Implementation of this innovative program is expected to provide 
significant benefits to over 50,000 people including NCBC and NAWS. 
Benefits will include improved water quality, an increase in economic 
development and job creation resulting from the construction of the 
BWRDF, and obtaining a long term, safe reliable and environmentally 
sustainable high quality water supply which meets current and proposed 
water quality drinking standards under the Safe Drinking Water Act 
Amendments. Water quality to the Agency's customers will be greatly 
improved through the construction of the BWRDF to treat brackish local 
groundwater supplies supplemented by the imported State Project Water 
from CMWD and MWD.
    Long-term water supply reliability for the Agency's customers and 
the Port Hueneme Subregion will be improved by access to both 
demineralized groundwater from local sources and imported State Project 
Water. The delivery of imported State Water Project water will also 
allow the Agency's members to reduce groundwater extractions from 
coastal wells threatened by seawater intrusion. Seawater intrusion will 
be minimized by relocating groundwater extractions from the coastal 
area to inland recharge areas.
    Benefits accruing to the Agency's customers which result from the 
implementation of the Port Hueneme WQIP, including the BWRDF, include 
the following:
  --elimination of reduction in the need for expensive and highly 
        inefficient home water softening units, thereby reducing the 
        need to desalinate wastewater effluent proposed for reclamation 
        in the future.
  --reduction in the cost of purchasing bottled water and/or household 
        reverse osmosis units.
  --reduction in the costs of repairs and replacement of plumbing, 
        plumbing fixtures and water using appliances.
  --reduction in the cost of soap and cleaning products for those water 
        customers who do not provide home water softening.
  --avoidance of potential penalties associated with the staged 
        reductions in groundwater pumping allocations imposed by the 
        Fox Canyon Groundwater Management Agency.
  --avoidance of additional water treatment costs imposed by Federal 
        and State Regulatory Agencies.
  --enhancement of an important wetlands resource.
Project Progress
    The Agency has made significant progress with the WQIP. A joint 
NEPA/CEQA Program Environmental Impact Report was finalized and 
certified by the Agency's Board of Directors on 22 May, 1996. The 
design of the BWRDF and pipeline network was completed, competitive 
bids were received, and public works contracts have been awarded. Total 
capital costs of the project (originally estimated at $13.8 million) 
are currently $2.0 million under budget. Construction of the BWRDF has 
been initiated and it is anticipated that demineralized groundwater 
from the BWRDF will be delivered to the Agency's customers by the end 
of February 1998.
    We believe that the WQIP will be an indispensable resource in our 
community and will provide a unique opportunity to study brackish water 
desalination in California. Thank you for your consideration of our 
unique and widely beneficial program.
                                 ______
                                 
Prepared Statement of Emery Poundstone, President, Reclamation District 
                                No. 108
    Mr. Chairman and Members of the Subcommittee. Thank you for your 
past support of the District's efforts to develop economical fish 
protection through innovative behavior barrier technology at our 
Wilkins Slough Diversion on the Sacramento River. Reclamation District 
No. 108 is one of the largest diversion on the River and screening of 
the Wilkins Slough facility is a high priority for resource agencies.
    In August 1996, the National Marine Fisheries Service (NMFS) and 
other resource agencies withdrew their support for further testing of 
these technologies by the District. The District agreed to proceed 
rapidly with a feasibility study, design and construction of a positive 
barrier fish screen.
    The District is now on an accelerated schedule to complete design 
and construction of a $10 million positive barrier fish screen facility 
by the 1999 irrigation season. This schedule is mandated by the NMFS 
Biological Opinion. In order to meet this closely coordinated time 
schedule, it is critical that construction funds be available by the 
beginning of fiscal year 1998 (October 1997). We respectfully request 
an appropriation of $5,000,000 designated to complete this construction 
project at Reclamation District No. 108.
    Additionally, the District requests that the Committee support 
adding an additional $3 million to the Anadromous Fish Screen Program 
from the Bureau of Reclamation general fund monies for fiscal year 1998 
to enable the Bureau to fully fund priority screening projects 
including Reclamation District No. 108.
    We greatly appreciate the support of the Committee.
                                 ______
                                 
  Prepared Statement of Sig Sanchez, Chair, Board of Directors, Santa 
                      Clara Valley Water District
                        guadalupe river project
Background
    The Guadalupe River is one of the major waterways that flow through 
the highly developed area of San Jose, California. Historically, the 
river has flooded the downtown areas of San Jose and Alviso beyond 
local prevention capabilities. For example, estimated damages from a 1 
percent flood that would inundate the urban center of San Jose is over 
$526 million. The Guadalupe River started to overflow its banks in 
April 1982 and January 1983 before the storms receded and avoided major 
damage. The Guadalupe River overbanked in February 1986, January 9, 
1995, and March 10, 1995, causing damage to residences and businesses 
in the St. John and Pleasant Street areas of the downtown.
Project Synopsis
    In 1971, the community requested the Corps reactivate its earlier 
study. Stage 1 started with the Plan of Study and was completed in 
1973. The initial problem definition and alternative screening were 
completed in 1974. More detailed problem definition and alternative 
studies for the Guadalupe River were completed in 1978. The Stage 2 
report was completed in 1980 for the combined Guadalupe River, Coyote 
Creek and Baylands, establishing the economic feasibility and federal 
interest in the Guadalupe River.
    The Guadalupe River project received authorization for construction 
under the Water Resources Development Act of 1986; the final General 
Design Memorandum was completed in 1992; the local cooperative 
agreement was executed in March 1992; construction of the first phase 
of the project was completed in August 1994; construction of the second 
phase of the project was completed in August 1996.
    In an effort to accelerate completion of this project, the local 
community through the Santa Clara Valley Water District has been 
providing a substantial technical and financial assistance since 1972. 
The local community has completed local projects within the Corps' 
project reach and reaches downstream of the Corps limits. More than $64 
million in local funds has been spent on the planning, design, land 
purchases for, and construction of such improvements.
Fiscal Year 1997 Funding
    The 1997 Budget includes $7.1 million to continue construction of 
the Guadalupe River Project. Contract 3 is scheduled to be advertised 
in April 1997 and construction completed in August 1998.
Fiscal Year 1998 Funding
    Funding for the Guadalupe River project during 1998 in the amount 
of $19 million is necessary to complete project construction and 
provide critically needed flood protection in the City of San Jose from 
downtown north to the community of Alviso.
Recommendation
    Based upon the present high flood risk and potential damage from 
the Guadalupe River, it is requested that the Committee support $19 
million in the Administration's budget to complete construction of the 
Guadalupe River project in 1998.
                    coyote/berryessa creek projects
Background
    The Coyote and Berryessa Creeks investigation was authorized by 
Congress in 1941 under the Guadalupe River and Adjacent Streams 
authority. Coyote Creek is one of two major waterways that flow through 
the highly urbanized areas of San Jose and Milpitas within Santa Clara 
County, California. Berryessa Creek flows through a small portion of 
San Jose and the growing community of Milpitas. Historically, Coyote 
Creek flooded the north San Jose community of Alviso beyond local 
prevention capabilities. A 1 percent flood in the Berryessa area would 
result in damages of $52 million to the homes and industries of 
Milpitas and San Jose. The probability of a large flood occurring 
before implementation of flood prevention measures was quite high. A 2 
percent flood has an 18 percent chance of occurring during a 10-year 
period, and a 1 percent flood has about a 10 percent chance of 
occurring during this same period. Based on the percent flood 
estimates, there is a strong potential that a damaging flood will occur 
in the near future.
    In January 1983, floodwaters escaped from Berryessa Creek and 
caused damage to several homes and businesses. Coyote Creek overbanked 
in April 1982 and again in March 1983 causing damages amounting to 
several million dollars. Hundreds of people were forced to evacuate 
their homes where floodwaters stood for many days. Flood damages were 
avoided in January, March 1995, and again in January 1997 due to the 
protection offered by project improvements made on the Coyote Creek.
Project Synopsis
    In 1971, the community requested the Corps to reactivate its 
earlier Guadalupe River and Adjacent Streams Study which included 
Coyote Creek. The Plan of Study was completed in 1973. The first phase 
of work included initial problem definition and alternative screening 
and was completed in 1974. The second phase of work included more 
detailed problem definition and alternative studies and was completed 
in 1978. The third phase, study of freshwater flooding in the Baylands, 
(which included the lower reaches on Coyote Creek) was completed in 
1979. The Stage 2 report could not establish the economic feasibility 
and federal interest in Coyote Creek. In light of flooding in 1982 and 
1983, the Corps refocused its study on Coyote Creek to address the 
inadequate level of protection provided by unstable levees. Berryessa 
Creek originally was a Section 205 study but was combined with Coyote 
Creek when the project cost exceeded the limits of that program.
    In an effort to accelerate the completion of this overall program, 
the local community through the Santa Clara Valley Water District 
(District) has provided a substantial amount of technical and financial 
assistance since 1972. Special planning studies have been completed by 
the District for inclusion into the Corps' studies. The Coyote/
Berryessa Creek project received authorization for preconstruction, 
engineering and design under the Water Resources Development Act of 
1986. The project was authorized for construction under the Water 
Resources Development Act of 1990. The Project Cooperation Agreement 
for Coyote Creek was executed in August 1994.
    The severe flood problem and the ominous threat of future damages 
forced the local community to initiate a local project on Coyote Creek 
in anticipation of future federal participation. Over $30 million has 
been spent on the planning, design and construction of improvements on 
Coyote Creek to date, which are planned for augmentation of and 
incorporation into the federal project. The Chief of Engineer's 
February 1989 report contained $8.63 million Section 104 credit for 
flood control measures undertaken by the District from San Francisco 
Bay to Milpitas Sewage Treatment Plant. Congress authorized, in the 
Water Resources Development Act of 1988 (Public Law 100-676), $3 
million in reimbursement to the District for construction of flood 
control measures upstream of the Milpitas Sewage Treatment Plant. The 
District has completed this work. A Section 215 agreement was executed 
with the Corps in December 1993 which provided an additional $3 million 
for the sponsor to design and construct approximately 7,000 feet of 
offset levees and overflow channel excavation along of Coyote Creek 
upstream of Highway 237 in the Cities of San Jose and Milpitas. The 
flood control improvements were completed in July 1996. The remaining 
project work consists of establishing over 20 acres of riparian 
mitigation plantings.
    The Corps completed the Draft General Design Memorandum in November 
1993 for Berryessa Creek which indicated an economically infeasible 
plan with a benefit/cost ratio of less than one. The District commented 
that a more environmentally protective project design is necessary to 
garner support of the local community; the District identified 
insufficient channel capacity existing downstream of the General Design 
Memorandum project limit at Calaveras Boulevard. Based on the Corps' 
and District's assessment, the Berryessa Creek downstream reach between 
Calaveras Boulevard and Lower Penitencia Creek does not have 1 percent 
capacity. Improvement of this downstream reach must be made prior to 
the upstream reaches identified in the General Design Memorandum to 
avoid induced flooding. Therefore, extension of the original General 
Design Memorandum project scope may be needed to include the downstream 
reach, which requires the preparation of a General Reevaluation Report.
Fiscal Year 1997 Funding
    The 1997 Budget included $1.4 million to continue preconstruction 
engineering and design on Berryessa Creek and continue construction on 
Coyote Creek. The Corps awarded the Coyote Creek construction contract 
in September 1994, which was completed in July 1996. The Coyote Creek 
mitigation planting construction contract was awarded in April 1996.
Fiscal Year 1998 Funding
    Construction funding for the Coyote/Berryessa Creek projects during 
1998 in the amount of $1.0 million as contained in the Administration's 
budget will be required to complete mitigation planting construction of 
the Coyote Creek project.
Recommendation
    Based on the present high flood risk and potential damage from 
Coyote and Berryessa Creeks, it is requested that the Committee support 
continued construction funding in the amount of $1.0 million as 
included in the Administration's budget to continue federal 
construction.
                     upper penitencia creek project
Background
    The Upper Penitencia Creek watershed is located in the northeast 
part of Santa Clara County, California, near the southern end of San 
Francisco Bay. Since 1978, the creek has flooded in 1980, 1982, 1983, 
1986, and 1995. The January 9, 1995 event caused damage to a commercial 
nursery and deposited mud in a condominium complex and a business park.
    The proposed project on Upper Penitencia Creek, from Coyote Creek 
confluence to Dorel Drive, will protect portions of the Cities of San 
Jose and Milpitas. The watershed is completely urbanized; undeveloped 
land is limited to a few scattered parcels still used for agriculture 
and the corridor along Upper Penitencia Creek. Based on the 1995 
Reconnaissance Report, 4,300 buildings are located in the floodprone 
area, 1,900 of which will have water entering the first floor. The 
estimated damages from a 1 percent or 100-year flood is $121 million.
Study Synopsis
    The National Resource Conservation Service under the authority of 
the Watershed Protection and Flood Prevention Act, Public Law 83-566, 
completed a study of the economic feasibility of constructing flood 
damage reduction facilities on Upper Penitencia Creek. However, the 
National Resource Conservation Service watershed plan has been stalled 
since 1990 by the U.S. Department of Agriculture because the benefits 
to agriculture are less than 20 percent of the total benefits of the 
project.
    The Santa Clara Valley Water District requested that the Corps 
proceed with a reconnaissance study in April 1994 while the National 
Resource Conservation Service plan was on hold. Funds were appropriated 
by Congress for fiscal year 1995 and the Corps started the 
reconnaissance study in October 1994. The Reconnaissance Report was 
completed in July 1995, with the recommendation to proceed with the 
Feasibility Study Phase. The Feasibility Study is scheduled to be 
completed in September 1999.
Fiscal Year 1997 Funding
    The Feasibility Study is scheduled to begin on Upper Penitencia 
Creek in fiscal year 1997 with funding in the amount of $241,000. The 
Feasibility Study Cost-Sharing Agreement is expected to be signed by 
the sponsor in April 1997. The study is scheduled to be completed in 
August 1998.
Fiscal Year 1998 Funding
    Funding for the Upper Penitencia Creek project during fiscal year 
1998 in the amount of $475,000 to continue the Feasibility Study is 
essential to provide needed flood protection to citizens in the Cities 
of San Jose and Milpitas.
Recommendation
    Based upon the present high flood risk and potential damage from 
Upper Penitencia Creek, it is requested that the Committee support the 
administration's fiscal year 1997-98 budget of $475,000 for the 
feasibility study of the Upper Penitencia Creek Project.
           san jose area water reclamation and reuse program
Background
    The San Jose Area Water Reclamation and Reuse Program, also known 
as the South Bay Water Recycling Program, will allow the City of San 
Jose and its tributary agencies of the San Jose/Santa Clara Water 
Pollution Control Plant to protect endangered species habitats, meet 
receiving water quality standards and supplement Santa Clara County 
water supplies.
    The Santa Clara Valley Water District (District) is participating 
with the City of San Jose in the development of the reclamation and 
reuse program. Towards that end, the District is assisting the City of 
San Jose in providing financial support and technical assistance for 
program planning, liaison with water retailers, design, construction, 
inspection, and other services for the Program. Design, construction, 
construction administration, and inspection for the Program's 
Transmission Pipeline and Milpitas 1A Pipeline are being performed by 
the District under contract to the City of San Jose. Phase 1, now under 
construction, involves construction of nearly 60 miles of transmission 
and distribution pipelines, pump stations and reservoirs, and has an 
estimated capital cost of $140 million. It is anticipated that Phase 1 
will begin operation in March 1998, and will deliver an estimated 9,000 
acre-feet/year of nonpotable recycled water. The City of San Jose is 
the program sponsor for Phase 1.
    In 1992, Public Law 102-575 authorized the Bureau of Reclamation to 
participate with the City of San Jose and the District in the planning, 
design, and construction of demonstration and permanent facilities to 
reclaim and reuse water in the San Jose metropolitan service area.
Fiscal Year 1997 Funding
    Funding in the amount of $2,760,000 was approved in the fiscal year 
1997 Budget for the San Jose Area Water Reclamation and Reuse Program 
to continue the construction effort.
Fiscal Year 1998 Funding
    The Administration's fiscal year 1998 Budget includes $3 million to 
continue construction of the San Jose Area Water Reclamation and Reuse 
Program.
Recommendation
    Based on the important water supply and environmental benefits to 
the area, it is requested that the committee support the 
Administration's proposed $3 million fiscal year 1998 Budget for the 
construction for the San Jose Area Water and Reuse Reclamation Program.
               san francisco area water reclamation study
Background
    The purpose of the San Francisco Area Water Reclamation Study, also 
known as the Central California Regional Water Recycling Project, is to 
develop a Regional Water Recycling Master Plan for maximizing local 
reuse of recycled water and identify regions in California outside the 
Bay Area that could use high-quality recycled water for such purposes 
as agricultural irrigation or salinity control. The master plan will 
identify sources of freshwater and what potential exchange could result 
to benefit environmental, urban, or industrial needs. This plan will 
also include preparation of a technical memorandum to CALFED to 
summarize recycled water projects for implementation into their 
Environmental Impact Report.
    The feasibility study was completed in 1996. The master plan is 
expected to be completed in 3 years.
    The Santa Clara Valley Water District is participating in the 
master plan and is providing financial, technical, and project 
management support along with other local water and wastewater 
agencies.
Fiscal Year 1997 Funding
    Feasibility Study funding of the San Francisco Area Water 
Reclamation Study in fiscal year 1997 was $1,510,000.
Fiscal Year 1998 Funding
    Funding in the amount of $375,000 is included in the 
Administration's fiscal year 1998 Budget for the San Francisco Area 
Water Reclamation Study to develop the water recycling master plan.
Recommendation
    Based on the important water supply and wastewater discharge 
benefits to the region, it is requested that the committee support 
$375,000 included in the Administration fiscal year 1998 Budget for the 
San Francisco Area Water Reclamation Study.
  central valley project operations and maintenance of san luis unit 
                          joint use facilities
Background
    The San Luis Unit of the Central Valley Project is located near Los 
Banos on the west side of the San Joaquin Valley in Fresno, Kings and 
Merced Counties. The San Luis Unit is an integral part of the Central 
Valley Project, delivering water and power supplies developed in the 
American River, Shasta and Trinity River Divisions to users located in 
the service area.
    Certain facilities of the San Luis Unit are owned, operated and 
maintained jointly with the State of California. These Joint Use 
facilities consist of O'Neill Dam and Forebay, San Luis Dam and 
Reservoir, San Luis Pumping-Generating Plant, Dos Amigos Pumping Plant, 
Los Banos and Little Panoche Reservoirs, and the San Luis Canal. These 
facilities are essential to the State Water Project's ability to serve 
numerous agricultural and municipal and industrial water users in the 
San Joaquin Valley and Southern California. Costs of the Joint Use 
facilities are funded 55 percent State and 45 percent Federal, under 
provisions of Federal-State Contract No. 14-06-200-9755, December 31, 
1961.
    Within the Central Valley Project, the Joint Use Facilities of the 
San Luis Unit are an important link to the San Felipe Division, which 
serves as the largest source of water imported into the Santa Clara 
Valley Water District (District) and the San Benito County Water 
District. All of the Central Valley Project water delivered through the 
San Felipe Division must be pumped through O'Neill Dam and Forebay and 
San Luis Dam and Reservoir.
Project Synopsis
    For the past several years, there have been inadequate federal 
funds available to cover the pro rata federal share of Joint Use 
facility operation and maintenance costs. As of September 30, 1995, the 
federal government owed the State of California $9.9 million. As of 
September 30, 1996, the federal government would have owed the State of 
California $20.2 million, if the Santa Clara Valley Water District had 
not used the Contributed Funds Act to direct a $20 million advance 
payment of its Central Valley Project capital costs toward liquidation 
of this shortfall in operations and maintenance payments.
    The Santa Clara Valley Water District is a contractor of both the 
Central Valley Project and the State Water Project. Along with other 
State Water Project contractors, the District shared a growing concern 
about finding a way to expediently resolve the issue of unreimbursed 
operations and maintenance expenses incurred by the State on behalf of 
the federal government. Such unreimbursed expenses are carried by the 
State without interest, and these unreimbursed expenses impair the cash 
flow and financial management of the State Water Project.
Fiscal Year 1997 Funding
    In fiscal year 1997, approximately $6 million was appropriated for 
San Luis Joint Use facility operation and maintenance costs, an amount 
which is not sufficient to meet the total annual federal share of 
costs. It was anticipated that new agreements would be in place that 
would allow Central Valley Project contractors to collect funds 
directly for conveyance and conveyance pumping components of San Luis 
Joint Use operation and maintenance costs, and to pay such funds to the 
State of California. However, difficult cost allocation issues have so 
far prevented the direct funding agreements from being completed.
Fiscal Year 1998 Funding
    The Administration has requested $6,709,000 to continue operation 
and maintenance of San Luis Joint Use facilities. This quantity is once 
again insufficient to meet the federal share of operation and 
maintenance costs for Joint Use facilities. Bureau of Reclamation staff 
confirmed that the fiscal year 1998 budget figure assumes that the 
necessary agreements with Central Valley Project contractors will be 
completed for direct funding of conveyance and conveyance pumping 
components. If the agreements are not completed, and if funds cannot be 
redirected from other Central Valley Project operations and maintenance 
activities, there will be a shortfall of approximately $3 million in 
payments to the State in fiscal year 1998.
Recommendation
    The House and Senate Budget and Appropriations Committees should 
augment the Administration's request for $6,709,000 by an additional $3 
million to continue operation and maintenance of the San Luis Unit 
Joint Use facilities. The Administration's budget proposal puts a 
financial risk on the cash flow and financial management of the State 
Water Project and its contractors.
    Along with other State and federal contractors, it is the 
District's belief that the issue of outstanding obligations owed by the 
federal government to the State of California for operation and 
maintenance of the Joint Use facilities could significantly erode the 
cooperative relationship between the two projects and groups of 
contractors, if such obligations are allowed to accumulate or continue 
for any length of time. Maintaining a healthy and stable fiscal 
relationship with regard to these costs is a foundational issue which 
has the potential to affect the successful development of the long-term 
Bay-Delta solution through the CALFED process. It is especially 
important at this time, when successful implementation of the Bay-Delta 
Accord and the Central Valley Project Improvement Act, both important 
to Santa Clara County, depends on the two projects working well 
together.
                        calfed bay-delta program
Background
    In an average year, half of Santa Clara County's water supply is 
imported from the Bay-Delta watersheds through three water projects: 
the State Water Project, the federal Central Valley Project, and San 
Francisco's Hetch Hetchy project. In conjunction with locally-developed 
water, this water supply supports the 1.6 million residents of the 
county and the capitol of the high-tech industry. In average to wet 
years, there are enough water supplies to meet the county's long-term 
needs. In dry years, however, the county could face a water supply 
shortage of as much as 100,000 acre-feet per year, or roughly 20 
percent of the expected demand. In addition to shortages due to 
hydrologic variations, the county's imported supplies have been reduced 
due to regulatory restrictions placed on the operation of the state and 
federal water projects.
    There are also water quality problems associated with using Bay-
Delta water as a source of drinking water supply. Organic materials and 
pollutants discharged into the Delta, together with salt water coming 
in from San Francisco Bay, have the potential to create disinfection-
by-products that are carcinogenic.
    Santa Clara County's imported supplies are also vulnerable to 
extended outages due to catastrophic failures such as major earthquakes 
and flooding. As demonstrated by the recent flooding in Central Valley, 
the levee systems can fail and the water quality at the water project 
intakes at the Delta can be degraded to such an extent that the 
projects cannot pump from the Delta.
Project Synopsis
    The CALFED Bay-Delta Program is an unprecedented cooperative effort 
among federal, state and local agencies to restore the Bay-Delta. With 
input from urban, agricultural, environmental, fishing and business 
interests, and the general public, CALFED is developing a 
comprehensive, long-term plan that will address ecosystem and water 
management problems in the Bay-Delta.
    Restoring the Bay-Delta ecosystem is important not only because of 
its significance as an environmental resource, but also because failing 
to do so will stall efforts to improve water supply reliability for 
millions of Californians and the state's $700 billion economy and job 
base.
    Although the CALFED Bay-Delta Program is a long-range planning 
process, ecosystem restoration is an immediate priority because of the 
substantial lead time needed to produce ecological benefits. Species in 
the Bay-Delta continue to be proposed for listing under the Endangered 
Species Act (ESA). Recovery efforts cannot begin until adequate funding 
becomes available to implement the array of critical ecosystem 
restoration and water quality projects.
Fiscal Year 1997 Funding
    Congress authorized $430 million in matching federal funds for the 
environmental restoration of California's Bay-Delta as part of the 
California Bay-Delta Environmental and Water Security Act (HR 4126). 
The authorization was contingent on passage of a state bond act 
providing for similar programs.
    In November 1996, Californians passed Proposition 204, a $995 
million bond measure by an overwhelming 63 percent of the vote. The 
measure includes roughly $600 million for various programs related to 
Bay-Delta restoration.
Fiscal Year 1998 Funding
    President Clinton has requested $143 million in new federal 
spending in fiscal 1998 for ecosystem restoration in the Bay-Delta 
estuary. The request would provide the first installment of Bay-Delta 
funds authorized by Congress in late 1996.
Recommendation
    The House and Senate Budget and Appropriations Committees fully 
appropriate the President's budget request for Bay-Delta through the 
Budget Resolution, 602(a) allocation. Because success of this program 
will rely on adaptive management, and because a number of agencies and 
interests will be involved in deciding how funds can best be spent, the 
money allocated under 602(a) should be placed in a trust fund, to be 
administered by the Bureau of Reclamation with decisions and 
expenditures made through CALFED.
                                 ______
                                 
 Prepared Statement of William L. Zaun, Chief Engineer, Orange County 
                         Flood Control District
Request
    Mr. Chairman and Members, this statement is prepared on behalf of 
The Orange County Flood Control District and Orange County California 
to request your support for the appropriation of fiscal year 1998 
funding requested by the U. S. Army Corps of Engineers for continued 
construction of the Santa Ana River Mainstem Project.
                    santa ana river mainstem project
Status
    The U. S. Army Corps of Engineers has constructed approximately 50 
percent of the project. Of the major features, twenty (20) miles of the 
lower Santa Ana River Channel is complete with one three (3) mile reach 
remaining to be constructed and Seven Oaks Dam is about 50 percent 
complete.
    Orange County has expended about $170 million to date toward its 
responsibilities in providing land and performing relocations in 
support of the Santa Ana River Mainstem Project.
    At Prado Dam, Orange County is proceeding with pre-construction 
activities such as relocation of State Route 71.
    Orange County Citizens experienced a reduction of their flood 
insurance rates due to the progress made on the Project.
Summary
    Continued Federal appropriations are absolutely essential to the 
completion of the Santa Ana River Mainstem Project to provide adequate 
flood protection for the residents of Orange, Riverside and San 
Bernardino Counties. Pending completion of this important project these 
citizens remain vulnerable to flooding catastrophes and the same 
financial and emotional devastation experienced in Northern California 
and the Northwest this past winter.
                             other projects
    The Orange County Flood Control District also requests approval of 
appropriations requested by the U. S. Army Corps of Engineers to 
continue the studies on flood plain restoration and management of Aliso 
and San Juan Creeks.
                  santa ana river project information
                            flood potential
    Headwaters in San Bernardino Mountains, 75 miles to Pacific Ocean.
    Drains 3,200 square miles in Orange, Riverside and San Bernardino 
Counties in Southern California.
    Flows through Cities of Colton, Riverside, Norco, Anaheim, Santa 
Ana, Orange, Fountain Valley, Costa Mesa and Huntington Beach.
Floods in Orange County
    1938, greatest flood of this century, flooded the entire northern 
half of Orange County. Almost all bridges destroyed including damages 
to agricultural land which is now urbanized.
    1862, greatest flood on record, approximating the Corps Standard 
Project Flood.
Estimated Damage
    Standard Project Flood would exceed capacity of the existing Prado 
Dam
    LEVEES WOULD BE BREACHED: Flooding 110,000 acres from Anaheim to 
the ocean killing as many as 3,000 people and causing more than $15 
billion in property damage.
    MAJOR TRANSPORTATION CORRIDORS INTERRUPTED: San Diego, Garden 
Grove, Santa Ana, Costa Mesa and Orange Freeways. Railroad Stations and 
Track.
    MAJOR PUBLIC FACILITIES WOULD BE INUNDATED: Hospitals, Shopping 
Centers, Colleges, Sanitation Plants, Stadiums, Disneyland, Knotts 
Berry Farm and Hotels.
                             major features
Lower Santa Ana River
    ESTIMATED COST: $384 million
    ESTIMATED COMPLETION: Year 2000
    Improve 23 mile channel from Prado Dam to the Pacific Ocean
    Restore/Enhance 92 acre (8-acre mitigation) wetlands
    Acquire 1,123 acres of canyon lands to ensure safe releases from 
Prado Dam and provide open space habitat
    Relocate 60 various utility lines and 15 oil wells/lines.
    Modify 37 bridges
    STATUS: 80 percent COMPLETE
Prado Dam
    ESTIMATED COST: $472 million, construction is unscheduled
    Raise the dam elevation from 566 feet to 594.4 feet (increase of 
28.4 feet)
    Increase reservoir area from 6,695 acres to 10,256 acres
    Impoundment increase from 212,000 acre-feet to 362,000 acre-feet
    Increase capacity of outlet gates from 9,200 cfs to 30,000 cfs
    Acquire over 1,600 acres of property rights for reservoir expansion
    Relocate or protect 30 various utility lines
    Raise State Highway Route 71
    STATUS: UNSCHEDULED
Seven Oaks Dam
    ESTIMATED COST: $364 million
    ESTIMATED COMPLETION: Year 1999
    550-foot high, earth-rockfill dam, 2,980 feet long
    Gross reservoir capacity of 145,600 acre-feet
    Reduces peak inflow of 85,000 cfs to a peak outflow 7,000 cfs
    Acquire about 4,00 acres of land in fee or easement
    Relocate powerhouse, flume & transmission line, spreading basins, 
waterwells
    STATUS: 55 percent COMPLETE
                                 ______
                                 
Prepared Statment of Jerry Eaves, Chairman, Supervisor, Fifth District, 
                      County of San Bernardino, CA
    The Board of Supervisors of San Bernardino County, State of 
California, appreciates the opportunity to bring the following flood 
control and water conservation projects to your attention for 
consideration in the fiscal year 1997-1998 Federal Budget.

Corps of Engineers:
    Santa Ana River Mainstem--Construction of Seven Oaks 
      Dam, San Timoteo Creek, and the Lower Santa Ana 
      River.............................................     $52,900,000
    San Antonio Creek--Feasibility study of flood 
      control...........................................         180,000
    Mission Zanja Creek--Construction of expanded inlet 
      structure. (Funded through Continuing Authorities 
      Program)..........................................         774,000
Bureau of Reclamation: San Sevaine Creek Water Project-- 
    Public Law 84-934 Small Watershed Project Loan 
    Program.............................................       1,333,000

    The Board once again wishes to express its deep appreciation for 
your past and present support of these priority programs in San 
Bernardino County and also Orange and Riverside Counties.
                    santa ana river mainstem project
Project Description
    The Santa Ana River Project includes seven interdependent features: 
Mill Creek Levee, Oak Street Drain, San Timoteo Creek, Lower Santa Ana 
River, Seven Oaks Dam, Prado Dam and Santiago Creek. Mill Creek Levee, 
Oak Street Drain, San Timoteo Creek Reach 1, and Reaches 1, 2, 3, 4, 5, 
6, 7 and 10 of the Lower Santa Ana River are complete. Completion of 
all of the features will provide (a) the necessary flood protection 
within Orange, Riverside and San Bernardino Counties; (b) enhancement 
and preservation of marshlands and wetlands for endangered waterfowl, 
fish and wildlife species; (c) recreation amenities; and (d) flood 
plain management of the 30 miles of Santa Ana River between Seven Oaks 
Dam and Prado Dam. The Mainstem project is scheduled for completion by 
the year 2001.
San Bernardino County Features Status
    Seven Oaks Dam.--Intake structure excavation, Abutment stripping 
and Outlet Works/Diversion Tunnel contract is complete. Embankment and 
Spillway construction contract was awarded in March 1994. Construction 
is progressing satisfactorily and is 53 percent complete as of January 
1997.
    Mill Creek Levee.--Project was completed in April 1992.
    San Timoteo Creek.--San Timoteo Creek/Reach I construction was 
completed in September 1996. Reach II construction contract was awarded 
in September 1996 and scheduled for completion in September 1997.
Funding Required
    To continue construction of the Mainstem Project in fiscal year 
1997/98, the Corps of Engineers will require an additional $52,900,000 
in federal funding along with cash contributions of $1,700,000 million, 
lands, and various services from local sponsor.
    Project authorized.--Public Law 94-587, Section 109, Approved 
October 22, 1976 Public Law 99-662, Water Resources Development Act of 
1986
    Total project cost.--$1.4 billion--Includes $473 million local 
share.
    President's budget fiscal year 1997/98.--$52,900,000.
    Requested action.--Approval of $52,900,000 for Santa Ana River 
Mainstem, including Seven Oaks Dam and San Timoteo Creek projects in 
San Bernardino County.
                           san timoteo creek
Project Description
    The San Timoteo Creek is a major tributary to the Santa Ana River 
in the east San Bernardino Valley. At the downstream end of a large 
watershed of approximately 126 square miles, the existing creek flows 
through the cities of Redlands, Loma Linda, and San Bernardino before 
discharging into the Santa Ana River. The existing creek in all three 
cities has an earthen bottom and partially improved embankments 
reinforced with rail and wire revetments.
    Major storm flows along the creek in 1938, 1961, 1965, 1969, and 
1978 caused considerable damage to the creek itself as well as 
overtopping the banks and causing loss of life and severe property 
damage.
    The Energy and Water Development Appropriations Act of 1988 
authorized improvement of San Timoteo Creek as part of the Santa Ana 
River Mainstem Project. The improvements include the construction of 
approximately 5.5 miles of concrete lined channel from the Santa Ana 
River upstream through the Cities of San Bernardino, Loma Linda and 
Redlands plus the construction of debris retention facilities at the 
upstream end of the project in the form of in-channel sediment storage 
basins.
Project Status
    The Corps of Engineers completed Reach I of this project which 
encompassed 0.7 mile from Interstate 10 downstream to the confluence 
with the Santa Ana River including replacement of Waterman Avenue 
bridge in September 1996. Reach II construction started in September 
1996 and is scheduled for completion in September 1997. Reach II 
includes replacement of Redlands Boulevard bridge and 1.9 miles of 
channel. Plans and Specifications for Reach III are in progress.
      Estimated Project Schedule

Completion of Feasibility       Fiscal year 1988/89.                    
 Study.                                                                 
Preparation of Final Special    Fiscal year 1989/90.                    
 Report.                                                                
Basis for Design Report.......  Fiscal year 1990/91-1991/92.            
Right-of-Way Acquisition......  June 1992-June 1997.                    
Engineering Design, Plan, and   May 1992-June 1997.                     
 Specifications.                                                        
Construction Start              September 1994.                         
 (approximate).                                                         
Project Completion              October 1999.                           
 (approximate).                                                         
                                                                        

Estimated Project Cost
    The total estimated project cost is $58,000,000 with the federal 
participating cost at 75 percent or $43,500,000 and the local 
participating cost at 25 percent or $14,500,000.
    Requested action.--Approval of continued funding for the San 
Timoteo Creek Project.
              san antonio creek channel feasibility study
    Project History.--The San Antonio Creek Channel was constructed by 
the Corps of Engineers in the 1950's. Its watershed encompasses an area 
of approx. 89 sq. miles at the western border of San Bernardino County. 
Most of this channel is concrete lined or improved with rock slope 
protection. Approximately one-third of the primarily undeveloped 
watershed is tributary to the San Antonio Dam, which is located about 
11 mi. downstream from the headwaters of the watershed.
    Current Status.--Based on recent hydrologic and hydraulic studies, 
the existing channel was deemed inadequate to convey 100 year peak 
flows. Upon review of data developed by the reconnaissance study, it 
appears that the existing channel may be sufficient to convey 100 year 
flows if a re-operation plan of the existing San Antonio Dam is 
developed and implemented.
    Purpose.--The completed reconnaissance study will enable the Corps 
of Engineers to proceed with the feasibility phase study, which will 
develop a re-operation plan for San Antonio Dam, and establish 
guidelines for future use and capacity of the existing system, thereby 
eliminating the necessity for costly channel improvements.
    Funding Required.--To initiate a feasibility study, the Corps of 
Engineers will require $178,000 in Federal funding in fiscal year 1998.
    Requested action.--Approval of $178,000 for the San Antonio Creek 
Channel Feasiblity Study.
                         mission zanja project
    Project History.--The reconnaissance study, completed in February 
1994, considered the past work performed by the Corps of Engineers and 
expanded that effort to include the entire upper and lower ends of the 
drainage area not previously studied. Two features, the Expanded Inlet 
Plan and the Reservoir Canyon Detention Plan were recommended for 
further study. The Expanded Inlet Plan is the only feature recommended 
for construction at this time.
    Current Status.--The Expanded Inlet option will convey flows more 
efficiently than existing conditions. Construction of this portion 
would increase the level of flood protection in downtown Redlands. 
Plans and specifications for the Expanded Inlet option are currently 
being prepared.
    Requested Action.--Support of construction of Expanded Inlet Option 
through Section 205 Continuing Authorities Program.
               seven oaks dam water conservation project
    Project Purpose.--To research and establish water conservation 
alternatives at the Seven Oaks Dam facility.
    Current Status.--The feasibility phase of this study started in 
November 1993 and will be completed in July of 1997. Funding and 
feasibly studies are complete.
    Requested Action.--No further funding required
                    san sevaine creek water project
Project Description
    The San Sevaine Creek Water Project, as proposed, will provide 
environmental enhancements, water conservation and flood control 
facilities in the western portion of the San Bernardino Valley.
    A 132-acre area is being set aside to protect a sensitive plant 
community, wetlands and wildlife enhancement. In addition, several 
water conservation basins will percolate an estimated 25,000 acre feet 
of storm water runoff per year into the Chino Groundwater Basin 
benefiting agricultural, municipal and industrial water users in the 
Valley. This project will create water storage and conservation 
facilities which will provide approximately 5400 acre-feet of combined 
storage and reduce the need for purchasing imported water.
Project Status
    On January 25, 1996, Bureau of Reclamation officials advised, ``The 
County has met all requirements under the current Small Reclamation 
Projects Act (SRPA) program. The project is technically qualified for 
funding as proposed.'' The loan application was signed by Commissioner 
Eluid Martinez on April 11, 1996 and approved by the Secretary of 
Interior, Bruce Babbitt, on May 9, 1996, starting the 60-day 
congressional approval process. As of July 25, 1996 the San Sevaine 
project cleared the 60 day calendar for review by congress as required 
under the Small Reclamation Loan Act. On December 17, 1996, the project 
Repayment Agreement was approved by the Board of Supervisors of the 
County of San Bernardino and approved on January 8, 1997, by Robert 
Johnson, Regional Director of the Bureau of Reclamation.
    Although some levee, channel and interim basin work has already 
been completed at various locations on this major water project, 
federal assistance in the form of a Small Project Loan is urgently 
needed to allow for the construction of major improvements that will 
provide a fully integrated and functional project. Without these funds, 
it will be many decades before local interests can accrue sufficient 
funds to continue this vital project.
    The California Water Commission has consistently since the late 
1980's supported the construction of this project.
    Federal authority.--Public Law 84-984, as amended 1956.
    B of R grant contribution.--Approximately $27.4 million.
    B of R loan contribution.--Approximately $19.2 million.
    Total B of R project (not additive).--Approximately $52.9 million.
    Total local contribution.--$33.7 million.
    The County has been coordinating with the National Water Resources 
Agency (NWRA) in a cooperative effort to obtain funding for $1,333,000 
in fiscal year 1998, which coincides with the President's Budget. The 
project is very large and the Bureau has indicated an 8 year 
construction schedule with project completion by year 2004. We 
appreciate the continuing support provided by the Bureau of Reclamation 
for this project.
    Requested action.--Approval of $1,333,000 for fiscal year 1998, to 
be in line with Bureau total project build out by year 2004.
                                 ______
                                 
Prepared Statement of Mike Rippey, Chairman, Board of Supervisors, Napa 
                      River Flood Control Project
                               background
    The Napa River is the main waterway into which all tributaries of 
the Napa Valley flow. The river reaches its highest flow and the main 
point of concentration of stormwater in the heart of the downtown city 
of Napa. The original town of Napa was established at the head of the 
navigable Napa River channel in 1848 as its only port for 
transportation and commerce until the railroad extended from Benicia to 
Napa in 1902.
    The project is located in the city and county of Napa, California. 
The population in the City of Napa, approximately 67,000 in 1994, is 
expected to exceed 77,000 by the year 2000. Excluding public 
facilities, the present value of damageable property within the project 
floodplain is over $500 million. The Napa River Basin, comprising 426 
square miles, ranging from tidal marshes to mountainous terrain, is 
subject to severe winter storms and frequent flooding. In the lower 
reaches of the river, flood conditions are aggravated by high tides and 
local runoff. Floods in the Napa area have occurred in 1955, 1958, 
1963, 1965, 1986 (flood of record) and 1995.
    Over the years, the community has expressed a strong desire for 
increased flood management. Since 1862, twenty-seven major floods have 
struck the Valley region, exacting a heavy toll in loss of life and 
property. The flood of 1986, for example, killed three people and 
caused more than $100 million in damage. The town of Napa is 
particularly vulnerable to floods: during a typical 100-year flood, 
more than 325,000 gallons flow through downtown per second, with the 
potential of inundating 2 million square feet of businesses and offices 
and nearly 3,000 homes.
    Flood damage in downtown Napa has recurred in January 1993, March 
1995, and January 1997, resulting in disaster declarations and 
substantial federal assistance and economic losses, reaffirming the 
urgent need to implement the cost-effective project. In March 1995 and 
January of 1997 additional flood disasters occurred and FEMA is 
reviewing the damage claims.
    Damages throughout Napa County totaled about $85 million from the 
January and March 1995 floods. The floods resulted in 227 businesses 
and 843 residences damaged county-wide. Almost all of the damages from 
the 1986 and 1995 floods within the project area would have been 
prevented by the project.
    Locally developed flood measures currently in place provide minimal 
protection and include levees, floodwalls, pump stations, upstream 
reservoirs, restrictive flood plain management ordinances, and 
designated flood evacuation zones. Vast areas of flood plain are 
restricted to agricultural and open space uses, precluding development 
which would be damaged by flooding. These local measures still leave 
most of the city of Napa vulnerable to frequent damaging floods. Flood 
control projects have been authorized by Congress since 1944 but due to 
their expense, lack of public consensus on the design, and concern 
about: environmental impacts, a project has never been realized. The 
most recent Corps of Engineers project plan consisted of a deepening 
and channelization project. In mid-1995, federal and state resource 
agencies reviewed the plan and gave notice to the Corps that this plan 
had significant regulatory hurdles to face.
                    coalition plan--project synopsis
    To address project design issues, the Napa County Flood Control and 
Water Conservation District (District) initiated a new project planning 
approach. They formed the Napa River Community Coalition (Coalition), 
which included representatives of all project stakeholders. Using a 
consensus design approach with technical assistance from public 
resource managers, volunteer private professionals, the Coalition's 
consultants, and the Corps, a substantially modified flood control/
management project (the Coalition Plan) was developed over a record 
period of six months. The goal of the Coalition Plan is to provide 
flood protection for the community while maintaining a ``living 
river''. This living river strategy replaces the former project and now 
entails floodplain acquisition and restoration, restoration of a 
geomorphically stable river channel, replacement of bridges, and 
environmentally sensitive stream bank treatment in the urban reaches of 
the City of Napa.
    The Coalition Plan, which provides 100-year protection, is 
currently undergoing fine tuning with hydraulic modeling and other 
detailed work. The Corps' Supplemental General Design Memorandum (SGDM) 
and Supplemental Environmental Impact Statement/Environmental Impact 
Report (SEIS/EIR) for the Coalition Plan are scheduled to be released 
by the Corps for public comment in October of 1997. Land acquisition is 
planned through 1998 when the County plans for project construction to 
begin.
    The Coalition Plan now being detailed in the Corps' SGDM provides 
land acquisition for river widening, Oxbow dry bypass, utility 
relocations and pumping plants, levee and floodwall construction, 
bridge improvements, as well as recreational trails, open space and 
environmental mitigation. The benefits this plan will provide include 
reducing or eliminating property damage, cleanup costs, community 
disruption, and the need for flood insurance. The plan will protect 
access to businesses and public services and create opportunities for 
recreation and downtown development, boosting year-round tourism. As a 
critical feature, the plan will improve water quality, create urban 
wetlands, and enhance wildlife habitats.
    The plan would protect over 5,000 people from the 100 year flood 
event on the Napa River and its main connecting tributary, the Napa 
Creek, and the project has a positive benefit-to-cost ratio under the 
Corps' calculation. The Napa County Flood Control District is prepared 
to meet its local cost-sharing responsibilities for the project. A 
county-wide sales tax, along with a number of other funding options, is 
currently being pursued for the local share.
                            project synopsis
Fiscal Year 1997 Funding
    The 1997 budget included $700,000 to revise the key SGDM and SEIS/
EIR documents
Necessary Fiscal Year 1998 Funding
    Funding for the Napa River Project during 1998 in the amount of 
$1,600,000 is needed to complete the final SGDM and SEIS/EIR and 
initiate plans and specifications, and to finalize the Project 
Cooperation Agreement (PCA) to begin construction of the project in 
fiscal year 1999.
Recommendation
    Based on continuing high flood risk and severe damage from the Napa 
River, we request that the Committee support $1,600,000 to complete 
preconstruction, engineering and design of the Napa River Project.
                            project elements
March 1997
    The current plan, which is the result of the Coalition effort in 
concert with the Corps of Engineers, includes land acquisition for 
river widening, levee and flood wall construction, recreational 
facilities and open space and an oxbow dry bypass, among other items. 
The Corps is now working to incorporate the refined design into its key 
preconstruction documents. After the design documents are approved and 
the construction drawings prepared, the PCA will be negotiated and 
signed by the local sponsors and the Corps. Once real estate is 
acquired and construction funds are appropriated, construction will 
begin. The county is working to ensure that construction of the project 
will start in fiscal year 1999.
                redesigned project elements by location
    The following redesigned project elements were developed by the 
Community Coalition and are listed here by location along the river. 
These elements are being incorporated into the redesigned Corps plan.
Kennedy Park
    Wetlands will be created from Kennedy Park to the Oxbow. In 
addition, new recreational trails will extend continuously from the 
park through downtown Napa and north to Trancas Street.
Maxwell Bridge
    A causeway section will be added to Maxwell Bridge. The natural 
flood plain will be restored and extended alongside the river 
underneath its new causeway.
Riverside Drive
    Riverside Drive and the existing homes will remain intact. Previous 
plans called for the elimination of the road and 10 homes in order to 
avoid toxic clean-up along the east bank. A setback flood wall and 
recreational trail will be constructed with stable riverbanks.
Oil Company Road
    Toxins in the Oil Company Road area will be removed.
Napa Waterfront
    The waterfront from 3rd Street to the Hatt Building represents the 
only section of the project area where flood flow constrictions still 
remain. Conceptual design alternatives for this area will be developed. 
These designs must adhere to guidelines for a living river and to urban 
riverfront design standards. To the extent possible the designs will 
retain historical properties, remove the construction of the river, 
require no further deepening of the channel, minimize property 
acquisition, and require only limited use of vertical bank treatments.
Oxbow Dry
    A dry bypass will provide open space in the downtown area and will 
retain the Oxbow as the primary waterway--fulfilling the objectives of 
the living river. During floods, the bypass will divert excess water 
away from the Oxbow.
                                 ______
                                 
    Prepared Statement of Donald Bransford, President, Glenn-Colusa 
                          Irrigation District
    Mr. Chairman, Members of the Subcommittee, my name is Don 
Bransford. I am a rice farmer from Colusa County, California, and I am 
President of the Board of Directors of the Glenn-Colusa Irrigation 
District (GCID or District).
    I appreciate the opportunity to provide you this statement 
regarding the federal funding priorities for GCID. I also appreciate 
the Subcommittee's past efforts to address our concerns, particularly 
the efforts of Congressman Vic Fazio, who represents our area.
    GCID is the largest and one of the oldest diverters of water from 
the Sacramento River. The District delivers water to approximately 
1,200 families who have about 141,000 acres of land in cultivation in 
Glenn and Colusa Counties. More than $270,000,000 in agricultural 
products are produced annually on GCID farms, helping to sustain an 
estimated 12,000 jobs in the region.
    The District is also the sole source of surface water for three 
wildlife refuges--the Sacramento, Delevan and Colusa National Wildlife 
Refuges--that cover some 20,000 acres in the heart of the Sacramento 
Valley. Winter water supplied by GCID to thousands of acres of rice 
land also provides a rich oasis for migrating waterfowl.
    The District is firmly committed to obtaining lasting protection of 
the winter-run salmon and other fishery resources at the Hamilton City 
Pump Station. Over the last several years, the District has invested 
over $3,000,000 in the construction of an interim flat-plate fish 
screen and other improvements to provide immediate protection to the 
endangered winter-run chinook salmon and other fish species. Since the 
installation of the flat-plate fish screen, there have been no fish 
taken at the GCID pumping plant. We are operating under a zero take 
limit for the winter-run chinook salmon, and constant monitoring has 
revealed no evidence of take having occurred at the plant.
    While the new flat-plate screen, installed in late 1993, has been 
very effective, it is only an interim solution. Permanent protection is 
needed. Without a new permanent fish screen, the District will continue 
to face restrictions which result in pumping only 75 percent of the 
District's full water entitlement.
    And, unlike some other projects, the availability of non-federal 
cost-sharing is not in doubt at GCID. The District has set aside 
$5,500,000 to date to help pay for the non-federal, 25 percent cost-
share of a new permanent fish screen. The State of California has also 
recently appropriated an additional $500,000 to complete the 
environmental review and development of a mitigation and monitoring 
plan. And, California voters have approved almost a billion dollars for 
projects like the GCID fish screen to help restore fisheries throughout 
the Central Valley. We are ready and able to cost-share any federal 
funds provided by this Committee.
    On behalf of GCID, the fishery and all of those whose economic fate 
is tied to the recovery of the winter-run salmon, I respectfully 
request that you provide $4,000,000 for the Bureau of Reclamation in 
fiscal year 1997 to advance work on a permanent new fish screen at the 
Hamilton City Pump Station. This is the same amount included in the 
president's budget request. Specifically, an allocation of $4,000,000 
is needed to allow construction to get underway in earnest.
    Without such a commitment of funds, construction will be delayed. 
That will mean less water for the farmers and a less speedy recovery of 
the fishery. Failure to provide the funds necessary to advance the 
project represents a lose-lose proposition. It is bad for the farmers 
and it is bad for the fishery resource. Again, I urge you to provide an 
allocation of $4,000,000 to keep the project moving forward on an 
optimum schedule.
    For the U.S. Army Corps of Engineers, GCID requests the Committee's 
support of an appropriation of $600,000 to the Corps of Engineers to 
continue work on the Sacramento River gradient or riffle restoration 
project. This is also the same amount that was included in the budget 
request. Construction of the gradient restoration project will 
stabilize the river elevation and improve the effectiveness of the new 
fish screen built at the District's pumping plant. In addition, the 
gradient facility is critical to ensuring the long-term viability of 
the new fish screen structure under changing river conditions.
    Finally, Mr. Chairman, GCID requests that the Subcommittee earmark, 
from within the funds made available for refuge water supply, $500,000 
to initiate design and feasibility studies to construct a siphon across 
Stony Creek and upgrade these GCID canal facilities necessary to make 
refuge deliveries. This project will enable the District to make year-
round water deliveries to the three National Wildlife Refuges in the 
GCID service territory (the Sacramento, Delevan and Colusa National 
Wildlife Refuges) as well as make Stony Creek available for possible 
fish restoration activities. It will also allow water deliveries during 
the winter for crop diversification and to expand the acreage flooded 
for rice straw decomposition and wildlife habitat. This project is the 
most efficient and least costly way to provide expanded water service 
to the Sacramento Refuge complex, as required by the Central Valley 
Project Improvement Act.
    Mr. Chairman, Members of the Subcommittee, on behalf of GCID, I 
would like to express my appreciation for your past support of our 
efforts to address the fish bypass problem at the Hamilton City Pump 
Station, and I respectfully request your support once again in the 
Fiscal Year 1998 Energy and Water Development Appropriations Act.
    Thank you for your consideration.
                                 ______
                                 
 Prepared Statement of Virginia Grebbien, General Manager, West Basin 
  Municipal Water District and Central Basin Municipal Water District
    Mr. Chairman and members of the Subcommittee, thank you for 
providing me an opportunity to testify today on the U.S. Bureau of 
Reclamation appropriations for fiscal year 1998.
    The West Basin Municipal Water District (WBMWD) supports the $31 
million in the Bureau's fiscal year 1998 appropriation under the 
authorization of Title XVI of Public Law 102-575. Section 1613 of Title 
XVI, Los Angeles Area Water Reclamation and Reuse Project, provides 
that the Secretary is authorized to participate with WBMWD and the City 
of Los Angeles in the design and construction of water recycling 
facilities to produce 120,000 acre-feet of recycled water annually. The 
federal share shall not exceed 25 percent of the total construction 
costs (and no federal funds are to be provided for operation and 
maintenance). West Basin is seeking to increase the current 
appropriations from $10 million to $17.5 million for the Los Angeles 
Area Water Reclamation and Reuse Project.
    Section 1614 of Title XVI, San Gabriel Basin Demonstration Project, 
similarly authorizes the Secretary to participate with the Metropolitan 
Water District of Southern California (MWD), Main San Gabriel Water 
Quality Authority, Central Basin Municipal Water District (CBMWD), and 
the Upper San Gabriel Valley Municipal Water District in a 
comprehensive conjunctive use program. CBMWD is constructing the Rio 
Hondo In-lieu Recycling Project component of the San Gabriel 
Demonstration Project. CBMWD supports $5.235 million in the Bureau of 
Reclamation's budget for Section 1614, the San Gabriel Demonstration 
Project.
    The West Basin Municipal Water District and Central Basin Municipal 
Water District today have under construction the largest water 
recycling and wastewater reuse program in the United States. Total 
design and construction expenditures to date have exceeded $280 million 
(1991-1996), and during the next three years, the Districts expect 
construction expenditures to be an additional $70 million. The program 
will create approximately 2,500 construction jobs and over 5,000 
indirect jobs.
 west basin municipal water district and central basin municipal water 
                                district
    The West Basin Municipal Water District and Central Basin Municipal 
Water District are located in the coastal plain of Los Angeles County. 
Both Districts are member agencies of the Metropolitan Water District 
of Southern California and receive two-thirds of their annual supply 
from MWD's imported water delivery system. The Districts' other sources 
of supply are our local groundwater and recycled water. Both Districts 
were established by popular elections under the California Special 
Districts Act for Municipal Water Districts (WBMWD was organized in 
1947 and CBMWD in 1952). Forty-one cities are within the boundaries of 
the Districts, with an overall population of approximately 2.4 million. 
The Districts wholesale water to approximately 50 separate retail water 
utilities.
    The two Districts are governed by separately elected five-member 
Boards of Directors, but share the same modest administrative and 
engineering staff (40 full-time employees). Most of the Districts' 
water management programs and water recycling projects are jointly 
administered to save costs. All the Districts' water facilities are 
privately operated through contractual agreements.
          los angeles area water reclamation and reuse project
    WBMWD and CBMWD currently have under design and construction the 
largest water recycling program in the United States. These water 
recycling projects, in combination with the Districts' water 
conservation, groundwater management, and desalination projects will 
reduce their need for imported water from Northern California by over 
100,000 acre-feet annually. These projects have multiple benefits to 
Southern California:
  --Provide a more dependable water supply and reduce the likelihood of 
        water rationing;
  --Lower the cost of water to industry (e.g., refineries, aerospace 
        firms, textile manufacturing) and thereby provide incentives to 
        not relocate;
  --Environmental protection--reduce by 25 percent the wastewater 
        discharged into Santa Monica Bay (an EPA designated National 
        Estuary);
  --Create new jobs, both construction related and permanent, to 
        operate and implement the Districts projects and programs; and
  --By reducing the use of imported water from Northern California 
        (including the Mono Basin and the Sacramento Delta watersheds), 
        the Districts will assist in the ``statewide water solution'' 
        and significantly help in protecting the fish and wildlife 
        resources in northern California.
    The Districts' water recycling projects have received widespread 
public support from environmental, community, and business groups. The 
water recycling projects are also an excellent example of local 
governmental cooperation. The City of Los Angeles, which owns and 
operates the Hyperion wastewater treatment plant (the largest plant on 
the West Coast), has contracted with WBMWD for the supply of the 
wastewater in return for 25,000 acre-feet of the treated recycled water 
for use within the city boundaries. In addition, the CBMWD has 
contracts with the Los Angeles County Sanitation Districts for treated 
recycled water from two of its water reclamation plants to distribute 
over 20,000 acre-feet annually through 70 miles of pipeline 
distribution systems. MWD has agreed to be a financial partner in these 
projects by contributing $250/acre-foot for each acre-foot of recycled 
water produced and reused (a financial commitment of over $250 
million). To ensure the financial feasibility of these recycling 
projects, the Districts have imposed annual property owner water 
standby charges which provide approximately $13 million each year for 
the payment of the water revenue bond debt service until the recycled 
water sales are sufficient to pay for annual operation and maintenance 
and bond debt service.
    The Administration has committed to $50 million of the total $280 
million construction costs of the West Basin Water Recycling Program. 
To date the Bureau of Reclamation has provided $32.5 million in grants 
to WBMWD

                          [Dollars in millions]                         
------------------------------------------------------------------------
                   Fiscal Year                      WBMWD     BOR grants
------------------------------------------------------------------------
1994............................................        $75         $5.0
1995............................................         90          6.9
1996............................................         15          8.1
1997............................................         20         12.5
1998............................................         30         17.5
                                                 -----------------------
      Total.....................................        230         50  
                                                 =======================
      Grand Total...............................                        
(1)280                                                                  
------------------------------------------------------------------------

    Currently, the West Basin Water Recycling Project is serving 
recycled water to 83 customers. Phase I of the West Basin Water 
Recycling Project began delivering water to customers in February 1995 
(approximately 20,000 AF). Phase II is under design, and construction 
will be initiated in the summer of 1997. Phase II construction will be 
completed in late 1998 and will increase the use to 35,000 AFY by 
distributing recycled water to all the major refineries in Los Angeles 
County (Chevron, Mobil, ARCO, Unocal, Texaco). Additional expansions of 
the water reclamation plant would be constructed in phases allowing for 
the ultimate capacity of approximately 100 million gallons per day or 
100,000 AF (Year 2010).
                  rio hondo in-lieu recycling project
    The Central Basin Municipal Water District's Water Recycling 
Program is comprised of both the Century and Rio Hondo Recycled Water 
Projects. Governor Wilson awarded the Central Basin Municipal Water 
District the ``Environmental and Economic Balance Achievement Award'' 
in August 1995 for the water recycling projects.
    The Century Recycled Water Project was completed in 1993 and 
consists of approximately 35 miles of recycled water distribution 
pipeline, serving the cities of Downey, Bellflower, Paramount, 
Lakewood, Norwalk, Compton, South Gate, and Santa Fe Springs. 
Currently, recycled water from the Los Angeles County Sanitation 
District's 37.5 mgd (42,000 AFY) Los Coyotes Water Reclamation Plant is 
being delivered to over 128 sites, with a combined annual demand of 
4,000 AFY. Ultimately, recycled water will be delivered to over 200 
customer sites, with an annual demand of approximately 6,800 AFY. The 
total construction cost of this project was $23.5 million.
    The Rio Hondo In-lieu Recycling Project is under construction. To 
date (March 1996), approximately $25 million has been expended on 
pipelines and a pumping station located in Pico Rivera. When 
construction is completed in 2000, the Rio Hondo In-lieu Recycling 
Project will consist of over 46 miles of distribution pipelines, three 
storage tanks, two pump stations, and will interconnect with the 
Century and West Basin Water Recycling Distribution Systems. Recycled 
water from the Sanitation District's 100 mgd San Jose Creek Water 
Reclamation Plant, located north of Whittier, will be delivered to the 
cities of Whittier, Pico Rivera, Santa Fe Springs, Commerce, 
Montebello, Vernon, Huntington Park, Bell, Bell Gardens, and Cudahy. 
Approximately 13,000 AFY of recycled water will be delivered to over 
170 industrial and landscape users. The total construction costs for 
the Rio Hondo Project distribution pipelines, storage tanks, and pump 
stations is estimated at $64 million.
    To date, the Bureau of Reclamation has contributed $6 million in 
Federal grants to date for the construction costs, and the District has 
expended to date approximately $48 million. The planned funding 
contributions are listed below:

                    RIO HONDO WATER RECYCLING PROJECT                   
                          [Dollars in millions]                         
------------------------------------------------------------------------
                   Fiscal Year                      CBMWD     BOR grants
------------------------------------------------------------------------
1994............................................        $16         $2.0
1995............................................         10          3.0
1996............................................          5           .5
1997............................................          5           .5
1998............................................          5          1.0
1999............................................          7          5.5
2000............................................          6          3.5
                                                 -----------------------
      Total.....................................         54         16  
                                                 =======================
      Grand Total...............................                        
(1)70                                                                   
------------------------------------------------------------------------

                        summary/closing remarks
    West Basin Municipal Water District and Central Basin Municipal 
Water District have initiated construction of the largest water 
recycling program in the United States. These ``state-of-the-art'' 
recycling projects will ultimately recycle over 120,000 acre-feet 
annually, enough drinking water for 500,000 people. These water 
projects, more than any other in California, will provide more benefits 
to more people and the environment: conserve precious imported water 
from Northern California and Mono Lake, reduce wastewater pollution to 
Santa Monica Bay, and create jobs in south-central Los Angeles. In 
California, it is unique that a water project has received such a broad 
array of public support, including the Los Angeles County Taxpayers 
Association, Congress of Senior Citizens, Mono Lake Committee, Sierra 
Club, Heal the Bay, and many other environmental interest groups, and 
business and chamber groups, and elected officials from throughout the 
state. But the most important factor is the creation of local jobs in 
south-central Los Angeles communities and providing industry with a 
new, dependable and economical water supply. Mr. Chairman, thank you 
again for the opportunity to testify today.
                                 ______
                                 
Prepared Statement of Maureen A. Stapleton, General Manager, San Diego 
                         County Water Authority
    Mr. Chairman and members of the Subcommittee, thank you for 
providing me an opportunity to testify on the Bureau of Reclamation's 
Title XVI grant program. The San Diego County Water Authority, through 
its 23 member agencies, provides imported water to almost 97 percent of 
San Diego County's 2.7 million residents. The Water Authority and its 
member agencies are engaged in a long-term effort to reduce regional 
reliance on limited imported water supplies. Water reclamation is 
critical to the success of that effort.
    Title XVI of Public Law 102-575, adopted in 1992 and amended in 
1996, authorizes the Bureau of Reclamation, to financially support 
water reclamation projects in California and other western states. 
Three of the projects authorized to receive Title XVI funding are 
located in the Water Authority's service area: the San Diego Area Water 
Reclamation Program, the North San Diego County Area Water Recycling 
Project and the Mission Basin Brackish Groundwater Desalting 
Demonstration Project. Ultimately, these three recycling programs will 
provide enough water to meet more than 12 percent of the San Diego 
region's long-term water needs.
    The San Diego Area Water Reclamation Program, a multi-agency 
program consisting of facilities to reuse and recycle water in the San 
Diego metropolitan service area, is one of five regional reclamation 
programs authorized under Public Law 102-575. When completed, the 
system of inter-connected reclamation facilities will serve an area of 
more than 700 square miles and add more than 70,000 acre-feet annually 
to the San Diego region's local water supply. The North San Diego 
County Area Water Recycling Project and Mission Basin Brackish 
Groundwater Desalter Demonstration Project, both authorized in 1996 
under Public Law 104-266, will provide almost 20,000 acre-feet of 
reclaimed water to customers in northern coastal and inland San Diego 
County.
    Federal support for these three projects makes sense on several 
levels. Water reclamation allows a precious natural resource that is in 
increasingly short supply to be reused, thus reducing the need to 
develop new water sources. From a public policy perspective, recycling 
projects are less expensive and have far fewer environmental impacts 
than alternative water supply projects, such as surface reservoirs and 
dams. Additionally, recycling projects reduce the need for water from 
the environmentally sensitive Sacramento-San Joaquin River Delta.
    Implementation of these three recycling projects will also provide 
benefits to the national economy. San Diego County is home to a number 
of medical research institutes, bio-technology firms, 
telecommunications companies and electronics manufacturers. These high 
technology firms require a reliable water supply to operate. The 
County's vibrant agricultural sector contributes more than a billion 
dollars annually to the national economy. To prosper economically, San 
Diego County needs the type of adequate and reliable water supply that 
water reclamation helps to make possible. Federal participation in the 
San Diego Area Water Reclamation Program, North San Diego County Area 
Water Recycling Project and Mission Basin Brackish Groundwater 
Desalting Demonstration Project will, by reducing the potential for 
future water shortages, protect the region's economy, environment and 
quality of life.
    The President's fiscal year 1998 Budget contains $13 million for 
the San Diego Area Water Reclamation Program. Because Title XVI was 
only recently amended to include the North San Diego County Area and 
Mission Basin projects, the projects are not included in the 
President's fiscal year 1998 Budget. On behalf of the agencies 
participating in these three important and innovative reclamation 
projects, I urge the Committee to approve the President's proposed 
fiscal year 1998 funding allocation for the San Diego Area Water 
Reclamation Program and appropriate an additional $4.9 million for the 
North San Diego County Area Water Recycling Project and $1.5 million 
for the Mission Basin Brackish Groundwater Desalter Demonstration 
Project.
                                 ______
                                 
    Prepared Statement of Susan Hammer, Mayor, City of San Jose, CA
Summary
    In 1992, Congress authorized the U.S. Bureau of Reclamation to fund 
up to 25 percent of the San Jose Area Water Reclamation and Reuse 
Project. Now known as South Bay Water Recycling, the project is nearing 
completion at a construction cost of $140 million. The Administration 
has proposed funding of $3 million in fiscal year 1998, bringing 
federal participation to $9 million, or about one-fourth of the total 
amount authorized. Funding in fiscal year 1998 of $10 million is 
requested to more closely match project expenditures. It is further 
recommended that the Bureau establish an interregional Office of Water 
Recycling with authority to budget and administer all Title XVI funds 
to ensure appropriate support in all regions. In addition, a portion of 
Clean Water Act and Safe Drinking Water Act funds currently 
administered by the EPA should be earmarked for water recycling 
programs such as South Bay Water Recycling which enhance water supply 
and reduce the environmental impact of wastewater discharge.
    Chairman McDade, Members of the Committee: South Bay Water 
Recycling is a $140 million regional project to recycle up to 20 
million gallons per day of highly treated wastewater for nonpotable 
reuse in California's Silicon Valley. The project will protect local 
wetlands by reducing wastewater treatment plant discharges to the south 
end of San Francisco Bay in compliance with the federal endangered 
species act. By augmenting the water supply and preserving sewer 
capacity, the project will also help maintain the global 
competitiveness of the region's high tech industries, which are 
essential to the regional and national economy. In order to meet the 
mandatory compliance schedule set by the EPA and the California Water 
Resources Control Board, area cities and agencies will spend an 
estimated $140 million for construction of the project which is 
scheduled to be completed by the end of the 1998 federal fiscal year.
    Congress has authorized the U.S. Bureau of Reclamation to pay $35 
million, or 25 percent of project costs. The larger local share of the 
project has been funded through sewer fees, which have increased by 
more than 50 percent over the past five years. Appropriation of $3 
million in fiscal year 1998 (as recommended by the Administration) will 
bring the cumulative federal share to date to about $9 million, 
significantly less than the amount authorized.
    Everywhere in the arid West, cities and towns face the dual 
problems of delivering enough water to their communities, while at the 
same time minimizing the impacts of wastewater discharge on the 
environment. For many of them, water recycling is the answer. Recycled 
water is ``smart'' water because it reduces the flow of wastewater to 
the environment by making more water available for reuse. Congress 
showed wisdom and foresight in authorizing support for water recycling, 
and this committee in particular is to be commended for providing 
initial funding for these projects through Title XVI of the 1992 
Reclamation Projects Authorization Act.
    But the Bureau of Reclamation has not been able to provide funding 
adequate to carry out the intent of Congress to promote and develop 
water reuse. In Northern California, especially, little funding has 
been available through the Mid-Pacific Region budget to support our 
local project. This may be due in part to federal participation in the 
``Cal-Fed'' agreement for improvement of the San Francisco Bay/
Sacramento River Delta environment, which will benefit communities 
throughout the state. But without adequate federal support, there is a 
real risk that the scope of the recycled water program will be limited, 
diminishing our ability to maintain wastewater treatment capacity and 
further burdening the local water supply. This could jeopardize the 
future of the four thousand high tech companies which employ nearly one 
quarter of a million people in the Santa Clara Valley area.
    One solution would be to increase funding to SBWR to $10 million in 
fiscal year 1998. This increase would also begin to equalize support 
for recycling between the Mid-Pacific and Lower Colorado Regions, the 
two regions with the largest number of recycling projects. To ensure 
continued support at appropriate levels, the Bureau should establish an 
inter-regional Office of Water Recycling, with authority to budget and 
administer all Title XVI funds to ensure appropriate support in all 
regions.
    In addition, Congress should direct agencies to apply a portion of 
their funding to water recycling when such projects clearly promote 
those agencies' goals and objectives. For example, the Environmental 
Protection Agency currently administers approximately $2 billion in 
grants and loans provided in support of Clean Water Act and the Safe 
Drinking Water Act programs. If some portion of this money could be 
added to the Bureau budget, or if a percentage of these funds could be 
made available for water recycling projects, we could leverage local 
funds to promote the most intelligent use of our water resources, and 
point the way for other urban areas throughout the country.
    It takes ten gallons of water to make one computer chip; some 
semiconductor manufacturers in our area use more than a million gallons 
of water per day. Discharge of this industrial wastewater is 
stringently regulated, while at the other end of the pipe, these same 
companies faced mandatory water rationing during the last drought. By 
giving water a second chance, reducing pollution and reusing a valuable 
commodity, South Bay Water Recycling will support Silicon Valley 
businesses, and help to keep our country competitive globally in the 
aggressive high-tech industries of the future. The future will no doubt 
show what cities like San Jose have already come to understand--namely 
that the distinctions between water, wastewater and recycled water are 
arbitrary at best, and may in fact be a barrier to our effective 
implementation of responsible water management.
    We appreciate the support this committee has shown during the past 
three years while we were developing the San Jose Area Water 
Reclamation and Reuse Program. Now that we are under construction, it 
is more important than ever that Congress provide appropriate funding 
to this project.
                                 ______
                                 
    Prepared Statement of Robert W. Bein, Chairman, Water Resources 
          Education Committee, Orange County Business Council
    On behalf of the Water Resources Education Committee of the Orange 
County Business Council of Orange County, California, I am writing to 
ask for your careful consideration of three special projects in the 
Orange County area provided for in the fiscal year 1998 budget.
    Of prime importance to the people of southern California is the 
Orange County Reclamation (OCR) Project sponsored by the Orange County 
Water District. This project was 1 of 18 projects authorized by the 
federal government last year and is recognized by the Bureau of 
Reclamation to be 1 of 3 projects now on line to begin the all 
important environmental analysis phase. This project is unique to your 
committee in that only a 10 percent federal share is requested, the 
remaining 90 percent will be provided at the local level.
    This project will ultimately provide 250,000 acre feet per year of 
potable water for southern California which would otherwise need to be 
imported from the north, or the Colorado River, and which is presently 
wasted into the Pacific Ocean. Besides being environmentally sound, 
this project would significantly enhance the southern California areas 
ability to be more self-sustaining in regards to our water resources. 
The project is not only cost effective, but it is also so innovative 
both technically and environmentally, that it will almost certainly 
serve as a model for other states and regions suffering from water 
shortage crisis.
    In addition, we urge your support for the continued funding of the 
U.S. Army Corps of Engineers' Santa Ana River Mainstem Project. The 
budget provides for a $51.9 million appropriation which will enable the 
project to continue on schedule toward completion. Completion of the 
project is essential to the health, safety and welfare of the Santa Ana 
River basin and particularly the citizens of Orange County. A project 
flood would require consideration of up to $15 billion of repair and 
restoration by FEMA not to mention the lives that would be lost and the 
economic disaster that would face southern California.
    Finally, we would also ask your consideration of another local 
Corps project, the San Juan/Aliso Creek Study. This project was funded 
and work on it started last fall and an appropriation of $315,000 is 
now requested to complete this critical study. This flood threat is of 
grave concern to southern Orange County citizens and in light of the 
flood tragedies throughout the country, we are anxious to determine the 
exact situation for this water course and begin taking the necessary 
remedial actions before a preventable disaster occurs.
    The Orange County Business Council represents nearly 2,000 member 
companies, employing more than 350,000 workers. The Business Council 
will greatly appreciate your support for the critical Water Resource 
projects required in southern California.
    I appreciate your consideration of these issues which are of such 
critical importance to our citizens and our businesses. Please contact 
me if I can provide any additional information.
                                 ______
                                 
  Prepared Statement of Gordon Stefenhagen, Mayor, City of Norwalk, CA
    Chairman Domenici and Members of the Subcommittee, the City of 
Norwalk is seeking a fiscal year 1998 appropriation of $975,000 to fund 
technical assistance for the development of seismically reliable water 
infrastructure improvements for six separate, but contiguous water 
systems that serve communities in southeast Los Angeles County.
    Section 116(d)(1) of the Water Resources Development Act of 1990 
(Public Law 101-640) as amended by the Water Resources Development Act 
of 1996 (Public Law 104-303) authorizes the Army Corps of Engineers to 
provide technical assistance for the development of potential 
infrastructure projects. This authorization provides for 25 percent 
non-federal sponsor cost sharing. Estimated technical assistance/design 
costs are $1.3 million. The local cost share is $325,000.
    The Water Resources Development Acts of 1990 and 1996 authorize 
studies under sponsorship of the Army Corps of Engineers to address the 
seismic reliability and restoration of southern California's public 
works infrastructure to insure full service during and following 
significant earthquakes in southern California. A fiscal year 1995 
Energy and Water Development Appropriation funded the Southeast Los 
Angeles County Water Conservation and Supply Study. The special study 
evaluated the performance of the six water systems serving the area, 
the vulnerability of those systems to disruption caused by a major 
seismic event, and the ability of these systems to function adequately 
following a major earthquake.
    The special study concluded that there are inadequacies and 
structural deficiencies in the water systems that would be exacerbated 
by a major earthquake. Storage capacity is inadequate, conveyance pipes 
are undersized and deteriorated, interconnections between purveyors are 
inadequate, and there is insufficient standby power to keep pumps 
operating when electrical service is interrupted. Significant 
interruption of water flow is anticipated during and following a major 
seismic event because individual system components are susceptible to 
failure severely affecting fire suppression activities. The resulting 
damages and related costs will include repair of the damaged water 
system, loss of property and the loss of business and residential 
service.
    The special study identifies three graduated systems' improvement 
alternatives to increase their reliability, reduce economic loss, and 
improve public safety. The three improvement alternatives reduced the 
estimated earthquake damages between $74 million and $101 million.
    Potential damages due to a major seismic event assumed to be a 6.5 
Richter Scale event on the Whittier Fault (the fault responsible for 
the 1989 Whittier Earthquake) are estimated at $219 million. Such 
damages relate only to those caused by an inadequate water supply, fire 
suppression, and standby power systems. An earthquake of magnitude 8.3 
predicted for the San Andreas fault could cost thousands of lives and 
upwards of $70 billion in property damage to southern California.
    Southern California earthquakes have cost the economy and local, 
regional, state, and federal government billions of dollars in 
emergency response services, clearance, recovery, and reconstruction of 
public infrastructure as well as resulting in significant public health 
and safety costs. Damage resulting from the 1994 Northridge earthquake, 
measuring 6.7 on the Richter Scale, did more than $20 billion in 
damage.
    Technical assistance is being sought for the development of 
policies and programs for enhancing emergency response and the design 
of the components needed to maximize the ability of these water systems 
to function properly following a major earthquake.
    Required improvements include additional reservoir storage, new 
wells, transmission pipelines, and system interconnections to create a 
system loop connecting water purveyors. Transmission improvements will 
strengthen the water conveyance and increase the reliability of 
emergency supplies. Also required are retrofitting pump stations and 
well pumps, pump motor control equipment, and the addition of stand-by 
generators for emergency power during electrical service interruptions.
    The Water Infrastructure Seismic Reliability/Restoration Project 
proposed by the City of Norwalk for the southeast Los Angeles County 
area will insure the seismic reliability of our water systems, saving 
lives, reducing property damage, and avoiding significant costs to all 
levels of government for earthquake response and recovery. The City of 
Norwalk seeks the Subcommittee's serious consideration of this proposed 
assistance.
                                 ______
                                 
Prepared Statement of Charles F. Kaiser, President, Board of Directors, 
                    Twentynine Palms Water District
    Chairman Domenici and Members of the Subcommittee, Section 116 (d) 
of the Water Resources Development Act of 1990 (Public Law 101-640) 
authorizes research under the jurisdiction of the Army Corps of 
Engineers to address the seismic reliability and restoration of 
southern California's public works infrastructure to insure full serve 
levels in the event of a significant seismic event.
    The Twentynine Palms Water District seeks $100,000 in fiscal year 
1998 appropriations for the Water Infrastructure Restoration Study. 
This study consists of a research and assessment of seismic conditions 
affecting the District's water system infrastructure and local water 
supplies. The study also includes scoping the primary elements of a 
subsequent study. Ultimately, this important work will result in a 
conceptual plan for restoring the seismic reliability of the District's 
infrastructure, insuring adequate water supply and availability and 
insuring adequate back power supply during and after a major seismic 
event.
    The key components of the Twentynine Palms Water District Water 
Infrastructure Restoration Study are:
  --The identification of the design base earthquake;
  --Data collection of water infrastructure elements including local 
        groundwater conditions, governmental regulations and planned 
        programs affecting District water supplies;
  --Identification of existing emergency preparedness programs;
  --Ascertaining the nature of the regional power grid serving the 
        study area and the availability of portable and standby power;
  --Defining system deficiencies;
  --Researching the District's Water Master Plan and Capital 
        Improvement Program; and
  --Scoping for the development of a Water Infrastructure Restoration 
        conceptual plan.
    Mr. Chairman and Members of the Subcommittee, natural disasters 
cost the economy and local, regional, state and federal government 
billions of dollars in damage, emergency response and reconstruction of 
public infrastructure as well as represent a significant threat to 
public health and safety. Damage resulting from the 1994 Northridge 
earthquake, measuring 6.7 on the Richter Scale, did more than $20 
billion in damage. The federal government paid billions of dollars of 
the emergency response and restoration costs.
    The so-called ``great quake'' or ``the big one'', of magnitude 8.3 
predicted for the San Andreas fault, or magnitude 7.5 predicted for the 
Newport-Inglewood fault near downtown Los Angeles, could cost thousands 
of lives and upwards of $70 billion in property damage. A disaster of 
this type would be significantly exacerbated if water systems did not 
survive the quake or were not restored quickly afterwards.
    The Water Infrastructure Restoration Study proposed by the 
Twentynine Palms Water District is the first step in insuring the 
seismic reliability of our water systems that will save lives, reduce 
property damage and avoid the significant costs to all levels of 
government for earthquake response and recovery. I urge the 
Subcommittee to provide funds for this important work.
                                 ______
                                 
 Prepared Statement of Jack Baber, President, Reclamation District No. 
                            1004, Colusa, CA
    Mr. Chairman and Members of the Subcommittee. During the last three 
years, Reclamation District No. 1004 has invested a significant amount 
of its funds to develop economical fish protection through innovative 
behavioral barrier technology at our Diversion on the Sacramento River. 
However, guidance efficiencies appeared to be insufficient to meet the 
stringent criteria of National Marine Fisheries Service. The District 
is now in the process of designing and constructing a positive barrier 
fish screen. Screening of the Reclamation District No. 1004 diversion 
is a high priority for resource agencies.
    During 1997, the District will complete environmental work and 
final design of the permanent positive barrier fish screen and pump 
relocation to a stable site approximately one-quarter mile downstream 
of the existing pumps. The existing location has been determined to be 
in a natural meander zone of the Sacramento River.
    The District is now on an accelerated schedule to complete design 
and construction of a positive barrier fish screen facility by the end 
of 1998. This schedule is mandated by the NMFS Biological Opinion.
    In order to meet this closely coordinated time schedule, it is 
critical that construction funds be available by the beginning of 
fiscal year 1998 (October 1997). We respectfully request an 
appropriation of $2,625,000 specifically designated to complete this 
construction project at Reclamation District No. 1004.
    Additionally, the District requests that the Committee support an 
additional $3 million be added to the Anadromous Fish Screen Program 
from the Bureau of Reclamation general fund monies for fiscal year 1998 
to enable the Bureau to fully fund priority screening projects 
including Reclamation District No. 1004.
    We greatly appreciate the support of the Committee.
                                 ______
                                 
   Prepared Statement of Gaye Lopez, Manager, Colusa Basin Drainage 
                                District
USBR Fiscal Year 1998 Request: $400,000
    The 650,000 acre Colusa Basin Drainage District, located on the 
west side of the Sacramento River, serves a large watershed exceeding 
one million acres. It covers three counties, Glenn, Colusa and northern 
Yolo Counties. It not only is a rich agricultural area, but a rich 
wildlife area as well, including three national wildlife refuges.
    The District was formed to primarily address flooding problems. In 
1995 alone, these three counties suffered an estimated 100 million 
dollars in damage and 1 death due to storms. In November 1995, a 
majority of landowners voted to implement the District's Integrated 
Management Plan to address flood damage while obtaining other benefits 
of increasing groundwater supplies, surface water storage, and improve 
environmental and wildlife uses in the watershed.
    Four projects have been initially selected to be developed to serve 
as a demonstration for integrated resources management: Two small 
reservoirs, a groundwater recharge detention basin, and management of 
the 75 mile Drain itself. During 1996, preliminary design for the 
conjunctive use demonstration projects was completed. Environmental 
documentation will commence during 1997. In addition, as part of the 
District's Integrated Resource Management Plan, the District desires to 
investigate opportunities to restore wetlands and environmental habitat 
in the basin.
    The District requests a $400,000 appropriation in fiscal year 1998 
to complete the environmental work it has begun on these projects and 
begin final design for construction.
    We believe our Integrated Resource approach to solving a number of 
problems across a large area with the same dollar, is a wise 
expenditure of public funds.
    Thank you for your continued support.
                                 ______
                                 
   Prepared Statement of Jerry C. Harmon and Keith E. Beier, Council 
           Members, San Diego Area Water Reclamation Program
    Mr. Chairman and members of the subcommittee, on behalf of the San 
Diego Area Water Reclamation Program and in support of funding for its 
construction, we are pleased to submit this testimony. For the past 
four years, you have provided necessary support for this vital project. 
We trust that, under the subcommittee's new leadership, you will 
continue to help us to deal with the water situation which affects our 
portion of the country where we effectively live on a desert made 
livable by finding or creating usable water. For the last four years, 
you have demonstrated a commitment to our project to benefit the people 
of San Diego County and its surrounding environment.
    The San Diego Area Water Reclamation Program, in particular the 
Escondido Water Reclamation Program which we know the most about, is a 
proactive attempt by regional and city leaders to address the region's 
historic scarcity of available and affordable potable and non-potable 
water for residential and commercial uses. San Diego County, especially 
the North County where Escondido is located, has experienced a 
tremendous population influx over the last 25 years. While our 
infrastructure has kept pace, occasional long term investments, like 
the water reclamation program, are needed to keep up with growth 
demands for water--a limited resource in our desert region. Since 1960, 
the population of Escondido has increased dramatically, as has the 
number of new businesses, not to mention our continued presence as an 
agriculture center. Through local planning and leadership, Escondido 
continues to attempt to meet the challenge of maintaining a high 
quality of life for its people, and with this subcommittee's continued 
support, can make it a reality.
    While our specific program is important to the citizens of 
Escondido, we remain a key part of the overall water planning effort of 
San Diego County. As part of the San Diego Area Water Reclamation 
Program, we are pleased with the increased amount of water that will be 
made available to the county as a result of this program.
    With state-of-the-art improvements to Escondido's existing 
treatment plant, the Hale Avenue Resource Recovery Facility, this 
project will expand the facility's reclaimed water capacity to 18 
million gallons per day, treated to tertiary standards. That will 
significantly increase the amount of reclaimed water available for uses 
not requiring potable water, including agricultural applications, 
irrigation of golf courses, parks, athletic fields, roadway 
landscaping, school landscaping, and general decorative landscaping. In 
addition, the Escondido Water Reclamation Project includes the City of 
San Diego's San Pasqual Valley Ground Water Management Project as a 
major customer for the reclaimed water to be produced at the Hale 
Avenue Resource Recovery Facility.
    The Escondido Water Reclamation Program has received the following 
federal funding for its water reclamation program: In fiscal year 1994, 
the Escondido Water Reclamation Program received $400,000. In fiscal 
year 1995, as part of the San Diego Area Water Reclamation Program, 
Escondido received $360,000 out of a total appropriation of $2.5 
million. Fiscal year 1996 federal support amounted to $1.116,000, and 
last year, we received $590,000. These funds were used in the 
construction of reclaimed water pipelines and in the design and 
construction management review of improvements to the Hale Avenue 
treatment plant. All of these federal funds have been matched by the 
City of Escondido 75 percent to 25 percent federal.
    The Bureau of Reclamation's fiscal year 1998 budget request 
includes $3.195 million for the Escondido Water Reclamation Program, as 
part of a larger appropriation for the San Diego Area Water Reclamation 
Program. With that appropriation. and with the final engineering 
analysis for the San Pasqual Valley Groundwater Management Plan, 
Escondido will perform major construction at the Hale Avenue Recovery 
Facility until the work is completed. We had hoped to begin this work 
last year, but waited for the San Pasqual portion to be finalized.
    We are pleased that the California Water Commission again has 
supported our request for federal funding as a recommended program. We 
are gratified to receive such support as well as the support of our 
sister agencies that comprise the San Diego Area Water Reclamation 
Program. With limited funding and unlimited needs, we are pleased to go 
forward and to recommend the full appropriation for the San Diego Area 
Water Reclamation Program. This program has been favorably reviewed by 
this subcommittee and the Senate subcommittee, the California Water 
Commission, and regional officials back home in San Diego County. It 
remains a good and needed project and we respectfully request your 
continued support.
                                 ______
                                 
Prepared Statement of the Santa Ana Watershed Project Authority [SAWPA]
    Mr. Chairman, and members of the Committee, this is submitted on 
behalf of the Santa Ana Watershed Project Authority (SAWPA), 
headquarters in Riverside County, California, respectfully requesting 
your continued assistance in the construction of the Chino Basin 
Desalination Program. SAWPA has received approval for a $32,064,258 
loan through the United State Bureau of Reclamations Public Law 84-984 
Small Reclamations Project Act Program, to assist in the installation 
of this project which is so important to our area. To date, we have 
received an initial funding of $4,551,070 and are scheduled to receive 
$5,592,000 during fiscal year 1997 for this work. It is our 
understanding that the remaining loan amount will be allocated for this 
activity over the following three fiscal years.
    The Chino Basin Desalination Program is a major element of the 
regional plan to protect local groundwater and the Santa Ana River from 
further degradation, and to extend the use of local water resources to 
meet current and future water demands. The Chino Groundwater Basin, an 
area of about 220 square miles, is located upstream of densely 
populated Orange County. Water quality in the region is degrading due 
to historic and ongoing agricultural activities. Irrigation drainage 
over the past 100 years has deposited high concentrations of salt and 
nitrates in the soil and groundwater. At the present time, there are 
over 300,000 dairy cattle concentrated on 15,000 acres of land in the 
basin. It is estimated that the dairy operations, despite strong 
efforts to manage quality issues, contribute as much as 27,000 tons of 
salt annually to the groundwater supplies in the area. Municipal water 
wells in the communities of Norco and Jurupa, the City of Chino, and 
the City of Chino Hills have been abandoned due to salt and nitrate 
contamination. It has been determined that if left unchecked the salt 
and nitrates will further degrade local groundwater, jeopardizing over 
50 percent of the basin's supply, and that downstream water resources 
in Orange County are equally threatened.
    The Chino Basin Desalination Program is being constructed and will 
be operated to protect the areas groundwater resources from further 
deterioration, to protect the surface flows of the Santa Ana River from 
degradation, and to facilitate expanded conjunctive use of imported and 
local water supply. The project will extract and desalt about 10,000 
acre-feet per year of salt laden, brackish groundwater from the Chino 
Basin. Demineralization will be accomplished by installing a desalting 
plant designed to produce 8.0 million gallons per day of potable water 
for use in nearby cities and on local farms. The desalter will be 
supplied poor quality water from as many as thirteen extraction wells, 
carefully located to intercept the sub-surface migration of 
contaminated water. Approximately 15,000 tons of salts will be removed 
from the basin annually by this operation. The process of salt removal 
will produce a heavy saline brine reject which will be transported from 
the basin in a non-reclaimable waste line and receive additional 
treatment prior to ocean disposal.
    The estimated total cost of constructing the desalting plant and 
appurtenant facilities is $47,687,164.
    The project has the support of local water agencies, local and the 
State Water Quality Control Board, the State Department of Water 
Resources, the State Water Commission, local agricultural interests and 
the Metropolitan Water District of Southern California. To date, SAWPA 
has invested $10.5 million in design and right-of-way acquisition. 
Construction is planned to begin in April, 1997 and the plant is 
projected to be operational by November 1998.
    The benefits of this important program are:
  --Protection of local ground and surface water supplies.
  --Protecting the environment from continued mineral degradation.
  --Assuring the long-range viability of agriculture in the region.
  --Providing additional water in an area of water scarcity.
  --Providing as many as 1,000 design and construction jobs in an area 
        where unemployment remains among the highest in the United 
        States.
  --Reducing the demand for water from the State's Delta area in 
        Northern California.
    Your continuing support of this project is essential to its 
success, and upon completion the project will be a major asset for 
local and regional water resource management agencies.
                                 ______
                                 
   Prepared Statement of the Metropolitan Water District of Southern 
                               California
    Chairman Domenici and Members of the Subcommittee: The Metropolitan 
Water District of Southern California (MWD) appreciates the opportunity 
to submit testimony regarding the U.S. Bureau of Reclamation's 
(Reclamation) and the Army Corps of Engineers' (Corps) fiscal year 1998 
budget, for the Hearing on Energy and Water Appropriations. MWD is a 
public agency created in 1928 to meet supplemental water demands of 
those people living in what is now portions of a six-county region of 
Southern California. Today, the region served by MWD includes nearly 16 
million people living on the coastal plain between Ventura and the 
Mexican border. It is an area larger than the State of Connecticut and, 
if it were a separate nation, would rank in the top ten economies of 
the world.
    Included in our region are more than 225 cities and unincorporated 
areas in the counties of Los Angeles, Orange, San Diego, Riverside, San 
Bernardino, and Ventura. We provide more than half the water consumed 
in our 5200-square-mile service area. MWD's water supplies come from 
the Colorado River via the district's Colorado River Aqueduct and from 
northern California via the State Water Project's California Aqueduct.
                              introduction
    Our testimony focuses on Reclamation's water resources management 
and ecosystem restoration programs that are of major importance to MWD 
and other Southern California water supply agencies. Specifically, MWD 
strongly recommends your approval of a Reclamation fiscal year 1998 
budget that includes full funding for San Francisco Bay-Sacramento/San 
Joaquin Delta Estuary restoration activities, as requested in the 
President's budget. MWD urges your support for adequate federal funding 
for Reclamation's Colorado River Basin Salinity Control projects that 
will ensure protection of water quality for this important source of 
water supply. MWD also urges your support for Reclamation's Endangered 
Species Conservation/Recovery projects that will provide for 
conservation of endangered and threatened species and habitat along the 
lower Colorado River, and provide mitigation for impacts associated 
with Reclamation's projects.
    Finally, MWD urges your full support for Reclamation programs that 
will help stretch existing water resources, such as water reclamation 
and groundwater recovery projects for Southern California agencies. 
These programs are essential for regional water supply reliability.
                   u.s. bureau of reclamation budget
California Bay-Delta Environmental Enhancement
    Last session, Congress passed the California Bay-Delta 
Environmental and Water Security Act, which authorized $430 million 
over three years for ecosystem restoration and water management 
improvements in the San Francisco Bay-Delta Estuary. The Bay-Delta 
serves as the hub of California's water system, fueling the State's 
$750 billion economy, supplying more than two-thirds of the State's 32 
million residents with a portion of their drinking water and irrigating 
45 percent of the nation's produce.
    Recognizing the importance of the Bay-Delta to California's 
economic and environmental health, the California voters approved a $1 
billion general obligation bond in November 1996, which contains $600 
million for improvements in the estuary.
    The President's fiscal year 1998 budget request provides funding of 
$143.3 million for environmental restoration activities in the Bay-
Delta. Federal money for the Bay-Delta will fund an array of critical 
ecological improvements, including habitat restoration, watershed 
protection, fishery enhancement and water quality improvement. MWD 
strongly urges your support for the restoration of this national 
ecological treasure by ensuring the appropriation of these critically-
needed funds.
Colorado River Basin Salinity Control
    The Colorado River is a very large component of the regional water 
supply and its relatively high salinity causes significant economic 
impacts on the 16 million water customers in the MWD's service area, as 
well as throughout the Lower Basin. For this reason, MWD and the Bureau 
of Reclamation are currently conducting a Salinity Management Study in 
Southern California. The recently completed first phase of the study 
concludes that the high salinity from the Colorado River causes 
significant impacts to residential, industrial and agricultural water 
users. Furthermore, high salinity adversely affects the region's 
progressive water recycling programs, and is contributing to an adverse 
salt buildup through infiltration into Southern California's 
irreplaceable groundwater basins. Reclamation studies indicate that 
water users in the Lower Basin are experiencing $750 million in annual 
impacts from current salinity levels in the river, and that these 
levels will progressively increase with continued agricultural and 
urban development upstream of MWD's point of diversion near Parker Dam. 
Droughts will cause spikes in salinity levels that will be highly 
disruptive to Southern California water management and commerce. The 
Salinity Control Program has proven to be a very cost-effective 
approach to help to mitigate the impacts of higher salinity. Continued 
federal funding of the program is essential.
    The Colorado River Basin Salinity Control Forum (Forum), the 
interstate organization responsible for coordinating the Basin states' 
salinity control efforts, issued its 1996 Review, Water Quality 
Standards for Salinity, Colorado River System (1996 Review) last June. 
The 1996 Review found that additional salinity control was necessary 
two years ago to meet the numeric criteria in the water quality 
standards adopted by the seven Colorado River Basin states and adopted 
by the U.S. Environmental Protection Agency with normal water supply 
conditions. For the last two years, federal appropriations for 
Reclamation have not equaled the Forum-identified funding need for the 
portion of the program the Federal Government has the responsibility to 
implement. It is essential that implementation of Reclamation's 
basinwide salinity control program be accelerated to permit the numeric 
criteria to be met again under average annual long-term water supply 
conditions, making up the shortfall. To assist in eliminating the 
shortfall, the Forum recommended that Reclamation utilize upfront cost 
sharing from the Basin states to supplement federal appropriations. 
This concept has been embraced by Reclamation and is reflected in the 
President's proposed budget.
    The President's proposed fiscal year 1998 budget contains funding 
of $7.6 million for implementation of the basinwide program, and $4.3 
million for implementation of the Grand Valley salinity control unit. 
In addition, the President's proposed budget contains $3.861 million 
for operation and maintenance of the Grand Valley, Lower Gunnison 
Basin, and Paradox Valley salinity control units, and $310,000 for 
investigations. MWD requests that Congress appropriate $12.5 million 
for implementation of the basinwide program, an increase of $4.9 
million from that proposed by the President. This level of funding is 
necessary to meet the salinity control activities schedule in order to 
maintain the state adopted and federally approved water quality 
standards. The Forum supports this level of funding. MWD supports the 
level of funding proposed by the President for implementation of the 
Grand Valley salinity control unit, operation and maintenance of the 
units, and investigations.
Endangered Species Conservation/Recovery Project
    MWD is presently engaged in an innovative partnership with 
Reclamation and other Department of the Interior agencies, as well as 
other water, power, and wildlife agencies, environmental organizations, 
and Indian Tribes in the states of Arizona, California, and Nevada, to 
develop a multi-species conservation program for the Lower Colorado 
River. The program will address the conservation, enhancement, and 
recovery needs of a broad suite of more than 100 listed and sensitive 
species and their associated aquatic, wetland, and riparian habitats in 
the three states, while providing long-term regulatory certainty for 
all parties. An effort of this nature can only succeed through the 
development of innovative voluntary public-private partnerships.
    MWD encourages your support for Reclamation's participation in the 
Lower Colorado River Multi-Species Conservation Program. Reclamation's 
participation in this program has been a valuable asset to the 
partnership. Funds provided under this project will in part help fund 
critically needed interim conservation measures for endangered species 
and their habitats, as well as planning under the long-term 
conservation program.
    The President's budget requests $3.66 million for fiscal year 1998 
to fund 11 separate programs under the ``Endangered Species 
Conservation/Recovery Project.'' Included in this amount is $1.155 
million to support cooperative efforts in the development of the 
``Lower Colorado River Habitat Conservation Plan.'' These funds will be 
matched one-to-one by non-federal funds. MWD strongly supports funding 
at the requested level.
National Fish and Wildlife Foundation
    The National Fish and Wildlife Foundation (Foundation) facilitates 
implementation of fish and wildlife mitigation and enhancement programs 
associated with Reclamation's projects through cost-sharing 
partnerships with local, state, tribal, and/or nongovernmental 
organizations. The Foundation is able to leverage federal dollars on at 
least a 1:1 matching basis.
    The Foundation's support for programs like the Lower Colorado River 
Multi-Species Conservation Program is extremely important to the 
development of comprehensive solutions to these complex endangered 
species issues. An effort of this nature can only succeed through the 
development of innovative voluntary public-private partnerships.
    The President's budget requests $1.5 million for fiscal year 1998, 
which anticipates a two dollar nonfederal match for each federal 
dollar. MWD strongly supports the President's requested level of 
funding.
Water Recycling and Groundwater Recovery
    Projects funded under Title XVI of the Reclamation Projects 
Authorization and Adjustment Act of 1992 (Public Law 102-575) will 
greatly improve Southern California's water supply reliability and the 
environment through effective water recycling and recovery of degraded 
groundwater. Title XVI projects authorized by the Reclamation Recycling 
and Water Conservation Act of 1996 (Public Law 104-266), but not 
included in the President's proposed fiscal year 1998 budget for 
Reclamation, are considered to be equally important. The Southern 
California Comprehensive Water Reclamation and Reuse Study is expected 
to identify new cost-effective opportunities for recycling water in the 
region. Implementation of such projects is difficult without combined 
federal, state and regional assistance. MWD expects to contribute about 
$15.2 million in fiscal year 1998 to recycled water and groundwater 
recovery projects in the region, and the State of California is making 
low-interest loans. This leaves the bulk of the costs for these 
projects to be paid by local agencies. MWD urges your full support for 
the $32.149 million in the President's fiscal year 1998 budget for 
water recycling and groundwater recovery projects, as well as future 
funding for all authorized Southern California projects.
Water Conservation
    Stretching available water supplies to fit competing needs 
continues to be a major concern in Southern California. MWD is 
supportive of Reclamation's past demonstrated commitment to water 
conservation and responsible water resources management. This 
philosophical commitment to water conservation has clearly been 
reflected in past Reclamation budgets. In fiscal years 1994 and 1995, 
MWD, on behalf of its 27 Member Agencies and the numerous subagencies 
and water districts they serve, qualified for matching incentive grants 
of $3.65 million to encourage water conservation through residential, 
commercial/industrial, and landscape projects. This Reclamation funding 
has been used to support water conservation programs that include 
technologically-innovative applications, and that facilitate jobs 
creation and community support as additional tangible benefits.
    In Reclamation's fiscal year 1996 budget, $9 million was requested 
to initiate the ``Water Conservation Challenge Partnerships'' program. 
Cost-share funding made available through this program would have 
provided financial assistance throughout the West for innovative urban 
and agricultural water conservation initiatives, that include 
cooperative partnerships among water users and other interested 
parties. Though not funded in fiscal year 1996 Energy and Water 
Appropriations, this program remains of great interest to MWD. As a 
result, MWD urges you and your Subcommittee to consider initiating 
funding for the ``Water Conservation Challenge Partnerships'' program 
in Reclamation's fiscal year 1998 budget.
                        army corps of engineers
    The Army Corps of Engineers' (Corps) comprehensive civil works 
program has the capability to contribute to the social, economic, and 
environmental well-being of California. MWD is primarily interested in 
the Corps' environmental restoration studies and projects that address 
the needs of the Bay-Delta Estuary.
    The President's proposed fiscal year 1998 budget includes numerous 
new and continuing programs in the Corps' South Pacific Division, which 
includes California. Several ecosystem restoration studies and projects 
specifically address significant habitat issues at various locations in 
the Bay-Delta watershed. These ecosystem restoration and flood 
prevention programs, and the Corps' participation in CALFED Bay-Delta 
efforts, represent an important opportunity in the process of 
developing a solution to the water resources and environmental problems 
facing the Bay-Delta Estuary. Corps programs that can contribute to the 
long-term Bay-Delta solution include wetland restoration projects such 
as those within the Yolo Bypass near Sacramento and Davis, watershed 
management studies in the Sacramento and San Joaquin River watersheds, 
habitat conservation and mitigation elements of flood damage prevention 
projects, and ecosystem restoration programs.
    MWD urges Congress to support these Corps programs as the fiscal 
year 1998 federal appropriations process moves forward.
    Thank you for your consideration of our testimony. We believe our 
comments emphasize the importance of continued funding for Reclamation 
and Corps' water resources management and ecosystem restoration 
programs that are critical for water supply reliability in Southern 
California.
                                 ______
                                 
            Prepared Statement of the City of Sacramento, CA
    Mr Chairman, the City of Sacramento requests that the following 
statement be submitted as part of the formal record of the Subcommittee 
on Energy and Water Development's review of the U.S. Corps of 
Engineers' (COE), fiscal year 1998 appropriations request.
    The City of Sacramento has been engaged in an effort to initiate 
the largest infrastructure improvement project in its history. This 
involves a multi-phase project to mitigate environmental and public 
health threats posed by the City's combined sewer system. The first 
phase of this $132 million project will address storage, pumping and 
treatment capacity of the existing system. The City is seeking the 
Subcommittee's support for this cost-shared project by requesting $3 
million in federal assistance. This request is being made pursuant to 
the authority provided by Section 506, Watershed Management, 
Restoration, and Development, of the Water Resources Development Act of 
1996 (WRDA, Public Law 104-303). The California Water Commission has 
endorsed this request.
    When Congress passed WRDA, it included an authorization to protect 
and restore the Sacramento River Watershed. This action was taken to 
ensure that COE expertise and experience could be utilized to ensure 
that watersheds such as the Sacramento River's would benefit from the 
decades of COE involvement. The legislative history on this provision 
explicitly states that the Secretary is authorized to provide 
technical, planning and design assistance to non-Federal interests. 
This assistance is to target restoration and development projects. The 
legislative history specifically qualifies this to include management 
and restoration of water quality which may include measures to prevent 
water quality degradation, control and remediation of toxic sediments, 
restoration of degraded streams, rivers, wetlands, and other water 
bodies as a means to control and protect urban watersheds. The 
Sacramento River Watershed is ideally situated to qualify for 
participation in this federal program based on the criteria of Section 
506.
    Currently, the City's need for infrastructure improvements are 
necessary because major storm events overwhelm the hundred year old 
system which combines stormwater flows with sanitary sewer flows. When 
this happens, the discharge of untreated wastewater into City streets 
and the Sacramento River occurs. The situation is similar to other 
older communities that have received federal assistance to support 
programs to correct the discharge threats.
    The City system receives both stormwater and sanitary wastewater 
flows. It contains over 306 miles of pipe ranging in diameter from six 
inches to nine feet servicing more than 7,000 acres of homes and 
commercial and industrial businesses within the Sacramento River 
Watershed. During dry weather conditions, it has up to 60 million 
gallons of waste flows. In times of wet weather conditions, this flow 
can be up to 630 million gallons per day. This imposes a burden that 
the City cannot meet under current operations.
    In 1990, the City had recognized that its combined system was in 
need of repairs and expansion to address the problems identified by the 
California Regional Water Quality Control Board. Beginning at this 
time, the City began to study possible alternatives to address this 
watershed threat ranging from a complete separation of the combined 
system to deep tunnels that would eliminate the overflow situations. 
After extensive study, the City determined that the best approach was a 
long range plan for increased pumping and treatment capacity coupled 
with below ground storage facilities. The cost-effective approach to 
implement the long-range plan involved a $132 million first phase. This 
first phase includes the rehabilitation of the existing infrastructure 
and expansion of facilities to accommodate storm-related surge events. 
A part of the first phase, for which the City is seeking $3 million, 
would involve upgrading a reservoir facility with disinfection 
capability to reduce pathogens that would otherwise result in the 
degradation of the Sacramento River Watershed.
    This cost-effective response is important because it will serve as 
a model to other watershed initiatives that seek to avoid obstacles to 
economic growth while protecting natural resources, improve and 
stabilize neighborhood revitalization efforts, and promote a higher 
quality of life for the City's residents and the surrounding 
communities that are within the watershed. In addition to implementing 
a response that will complement overall efforts to improve the overall 
water quality of the Bay-Delta, the project will, importantly, 
contribute to the community's efforts to prevent flood damage from 100-
year storm events. As recent storms have demonstrated, the occurrence 
of this kind of event is more frequent than once thought. The costs to 
the federal, state and local governments in the form of disaster 
assistance and natural resources restoration efforts is monumental. The 
implementation of this program will provide a critical element to 
address this situation and help to minimize the level of federal 
disaster assistance in the future.
    Once the project is implemented, it will begin the process of 
achieving the City's goals which can be summarized as follows:
  --provide control over the risk of wastewater flooding City streets;
  --reduce the potential for untreated wastewater to be discharged to 
        the Sacramento River Watershed when surge events occur; and
  --rehabilitate facilities and pipelines in a cost-effective manner 
        that can serve as a model for other communities with similar 
        circumstances.
    The issues are important to Sacramento's economy, its environment 
and the health and safety of its citizens. It is also important to the 
overall effort to develop programs that will complement efforts to 
restore the San Francisco Bay-Delta and improve an important watershed 
that is critical to the natural resources and economy of the State. We, 
therefore, strongly request that the Subcommittee support cost-shared 
assistance for the City of Sacramento.
                                 ______
                                 
     Prepared Statement of the East Bay Municipal Utility District
    Mr. Chairman, on behalf of the East Bay Municipal Utility District 
(EBMUD), I request that this statement be included as part of the 
Subcommittee on Energy and Water Development's fiscal year 1998 
appropriations hearing record on the U.S. Corps of Engineers budget.
    EBMUD is requesting that the Subcommittee approve an appropriation 
of $5 million to permit the U.S. Corps of Engineers to participate in a 
50 percent cost-shared cleanup of the abandoned Penn Mine site in 
Calaveras County, California. This is supported by the State of 
California, the California Water Commission, and other stakeholders who 
consider this project an important step in the effort to correct 
environmental threats created over several decades for which no 
responsible party exists. The request is made pursuant to Section 206 
of the Water Resources Development Act of 1996, which authorizes the 
Corps of Engineers to provide up to a 65 percent cost share to conduct 
aquatic ecosystem restoration projects.
    This project will serve as a national model to respond to other 
similar sites that are scattered throughout the country and which are 
concentrated throughout the West. Polluted runoff from abandoned 
hardrock mines poses serious ecological threats to water quality, 
aquatic habitat, and other environmental resources. The history of the 
Penn Mine site vividly illustrates the importance of developing a model 
that will allow a cost-effective solution to be implemented at the 
numerous abandoned mine sites.
    Under Section 206, federal funding is authorized only for those 
projects that will improve the quality of the environment, are in the 
public interest, and are cost effective. As the following discussion 
outlines, the requested project assistance meets these criteria. In 
addition, EBMUD and the State of California have taken the necessary 
steps to provide binding agreements to meet the obligations to provide 
the non-federal share of the project's construction costs as well as 
site rehabilitation and runoff monitoring costs associated with the 
project.
    EBMUD is a public agency responsible for providing water supply and 
wastewater treatment services to more than 1.2 million people of the 
East Bay in California, including residents of Oakland and Berkeley, 
stretching south to Castro Valley and north to Crockett. EBMUD's 
principal source of water is supplied by the Mokelumne River, which is 
located in Calaveras County, California. As part of its watershed 
buffer zone to protect this water supply, EBMUD property includes an 
area that is contiguous to an abandoned hard rock mine known as Penn 
Mine. This abandoned copper and zinc mine sits along the upper reaches 
of EBMUD's Camanche Reservoir.
    The mine was opened in 1861, and its periods of major activity 
occurred between 1899 and 1919 at the direction of the federal 
government. It was also operated during World War II to support the 
nation's demand for strategic metals. When the mine ceased operations 
after World War II, it was left in a state of disrepair and abandoned 
as uneconomic. Based on known records, beginning in the 1930's heavy 
metals, such as copper and zinc, were discharged from the mine site 
into the river, killing all aquatic life for 40 miles downstream. 
Despite the end of active mining in the late 1940's, environmental 
damage continued because of more than 250,000 cubic yards of mine waste 
consisting of unprocessed ore and mill tailings, covering 15 acres.
    Although EBMUD was never involved in the mining activities, nor has 
it benefitted in any way from the mining activities, EBMUD's Good 
Samaritan efforts have created an untenable and inequitable situation 
whereby EBMUD and the State of California are being asked to pay for 
the site's cleanup. Specifically, with the history of the site and 
federal involvement, as well as the importance of having a proven 
cleanup plan that could be used elsewhere, it is only reasonable that a 
cost sharing arrangement be made available to ensure that EBMUD is not 
asked to shoulder the entire cleanup burden for something for which it 
had no responsibility.
    Responding to the State of California's request, EBMUD began a 
cooperative program in 1978 to minimize the adverse effects of the mine 
site. Several reconstructed channels and holding ponds were created on 
the Penn Mine site. EBMUD, acting as a Good Samaritan, constructed Mine 
Run Dam Reservoir on its property that was experiencing acid mine 
drainage runoff which was then entering the Mokelumne River. Mine Run 
Dam Reservoir effectively served as a final defensive line to ensure 
that mine drainage would be controlled and treated to avoid 
uncontrolled fish kills and other ecosystem degradation. These actions 
contained about 90 percent of the drainage and, most importantly, 
prevented acidic runoff from entering the river between 1987 and 1992. 
There were no reported fish kills with the operation of the EBMUD 
facility.
    In 1993, EBMUD took several steps to meet water quality concerns of 
federal regulators, including developing a plan to divert and treat 
potential overflows from the site. In addition, EBMUD installed a batch 
treatment system to neutralize the toxic mine drainage and implemented 
a pumping operation to ensure that mine drainage would not overflow and 
react with mine wastes, thereby creating serious environmental threats. 
As a result of these actions, more than 15 million gallons of polluted 
runoff have been treated, resulting in greater than 98 percent removal 
of metals from water released from the site. Based on monitoring data, 
this temporary action has reduced Penn Mine metals loading to 
background levels.
    In 1995, the California State Water Resources Control Board, in 
connection with U.S. EPA, issued a draft permit to control final 
discharges and regulate activities at the site. This permit, which is 
pending while a cleanup plan is finalized, would impose specific 
cleanup requirements on EBMUD.
    EBMUD, in cooperation with federal, state, environmental and other 
stakeholders, has diligently worked to develop a plan of action to 
remediate the site and return it to its original landscape condition. 
After much study and review, a preferred alternative cleanup plan was 
accepted as the most protective and cost effective solution. The U.S. 
EPA, the Committee to Save the Mokelumne River, the California 
Sportfishing Protection Alliance, the State Water Resources Control 
Board, the Central Valley Regional Water Quality Control Board, and 
EBMUD signed an agreement to accept the preferred alternative cleanup 
plan. The Environmental Impact Report identifying the final cleanup 
plan was certified by the State of California and EBMUD in February 
1997.
    Because the site was created to support national objectives, and in 
some instances activities were directly related to federal contracts, 
it is only reasonable that federal assistance be provided to support 
cleanup plan implementation. It is important to reiterate that despite 
the fact that EBMUD never created the situation or benefitted from the 
mining activities, it has expended a considerable amount of time and 
resources. The next step, actual cleanup, will support ongoing efforts 
to develop a model that will demonstrate successful abandoned mine 
cleanups can be undertaken through consensus-based, cooperative 
processes in a cost-effective and environmentally sensitive manner.
    We therefore strongly request that the Subcommittee provide $5 
million for the U.S. Army Corps of Engineers fiscal year 1998 budget 
that will support a 50 percent cost-shared cleanup program at the 
abandoned Penn Mine that will serve as a model for future cleanup 
efforts at abandoned mine sites throughout the country.
                                 ______
                                 
              Prepared Statement of City of Inglewood, CA
    Chairman Domenici and Members of the Subcommittee, Section 116(d) 
of the Water Resources Development Act of 1990 (PL 101-640) and the 
Water Resources Development Act of 1996 (PL 104-303) authorize studies 
by the Army Corps of Engineers relating to the seismic reliability and 
restoration of southern California's public works infrastructure to 
insure full serve levels in the event of a significant seismic event. 
The intent is to take a proactive approach to earthquake preparedness 
of southern California's infrastructure which in the end will be more 
cost effective and desirable than the post earthquake costs.
    The City of Inglewood requests $100,000 in fiscal year 1998 
appropriations for the Water Infrastructure Seismic Reliability/
Restoration study. This study consists of a research and assessment of 
seismic conditions affecting the City's water system infrastructure and 
local water supplies. The study also includes scoping the primary 
elements of a subsequent study. Ultimately, this important work will 
result in a conceptual plan for restoring the seismic reliability of 
the City's infrastructure, insuring adequate water supply and 
availability, and insuring adequate back power supply during and after 
a major seismic event.
    The key components of the Inglewood Water Infrastructure Seismic 
Reliability/Restoration Study are:
  --The identification of the design base earthquake
  --Data collection of water infrastructure elements including local 
        groundwater conditions, governmental regulations and planned 
        programs affecting District water supplies,
  --Identification of existing emergency preparedness programs
  --Ascertaining the nature of the regional power grid serving the 
        study area and the availability of portable and standby power
  --Defining system deficiencies
  --Researching the City's' Water Master Plan and Capital Improvement 
        Program
  --Scoping for the development of a Water Infrastructure Seismic 
        Reliability/Restoration conceptual plan
    Mr. Chairman and Members of the Subcommittee, natural disasters 
cost the economy and local, regional, state and federal government 
billions of dollars in damage, emergency response, and reconstruction 
of public infrastructure as well as represent a significant threat to 
public health and safety. Damage resulting from the 1994 Northridge 
earthquake, measuring 6.7 on the Richter Scale, did more than $20 
billion in damage. The federal government paid billions of dollars of 
the emergency response and restoration costs.
    An earthquake of magnitude 8.3 predicted for the San Andreas fault, 
or magnitude 7.5 predicted for the Newport-Inglewood fault upon which 
the City of Inglewood sits could cost thousands of lives and upwards of 
$70 billion in property damage. A disaster of this type would be 
significantly exacerbated if water systems did not survive the quake, 
or were not restored quickly afterwards.
    The Water Infrastructure Seismic Reliability/Restoration Study 
proposed by the City of Inglewood represents the initiation of a 
program to insure the seismic reliability of our water systems that 
will save lives, reduce property damage, and avoid the significant 
costs to all levels of government for earthquake response and recovery. 
The City of Inglewood asks that the Subcommittee give this request 
serious consideration.
                                 ______
                                 
   Prepared Statement of John McTaggart, Mayor, City of Rancho Palos 
                               Verdes, CA
    As your distinguished Subcommittee writes the fiscal year 1998 
Energy and Water Resources Appropriations bill, I would like to bring a 
very important environmental restoration project to your attention.
    The Corps of Engineers and the City of Rancho Palos Verdes have 
been working on a cost-shared feasibility study to investigate the 
Federal improvements to restore pristine environmental areas along the 
Pacific coastline since 1995. The President's fiscal year 1998 Budget 
Request contains $79,000 to continue the feasibility study, however the 
final phase of the study will have to be extended over two fiscal years 
at that funding level. Extending the study will incur added overhead 
costs to the Federal government and to the City of Rancho Palos Verdes.
    The Corps of Engineers has indicated that the study can be 
completed in one year. For that reason, and because finishing the study 
in one year will save the Federal government and the City of Rancho 
Palos Verdes money, I would like to take this opportunity to request 
that your distinguished Subcommittee add $121,000 to the President's 
request of $79,000 for a total Federal contribution to the study of 
$200,000.
    The City is prepared to commit their cost-share portion of matching 
funds to complete the study next year.
    The area along the Rancho Palos Verdes coastline that is being 
studied has been severely degraded as a result of landslide movement of 
material and coastal erosion causing sediment and continuous turbidity 
that has buried sensitive marine habitat. The study involves 
investigations to define landslide and erosion relationships, impacts 
on the environment, and potential restoration benefits.
    Thank you for the opportunity to submit this request.
                                 ______
                                 
    Prepared Statement of Cathy Novak, Mayor, City of Morro Bay, CA
    As Mayor of the City of Morro Bay, on California's central coast, I 
respectfully request your consideration of two very important public 
works projects as your distinguished Subcommittee writes the fiscal 
year 1998 Energy and Water Resources Appropriations bill.
    Morro Bay Harbor is the only safe harbor of refuge between Santa 
Barbara and Monterey, California and supports approximately 250 home 
ported fishing vessels and related marine dependent businesses.
    During World War II, at the US Navy's request while operating an 
emergency naval base, the Army Corps of Engineers designed and 
constructed a new harbor entrance with two rock breakwaters. Since the 
initial construction, the Federal Government has maintained the harbor 
entrance, breakwaters and navigation channel. In fiscal year 1995, the 
Corps completed the Morro Bay Harbor Entrance Improvement Project to 
enhance commerce, fishing and navigation safety.
    This year, only three years after the Corps completed a major 
enhancement project at Morro Bay Harbor, the President's Budget Request 
failed to include funding to maintain the Harbor. Due to the fact that 
the Harbor has very little recreational facilities to generate 
revenues, there is no local sponsor to assist with dredging costs 
should the Federal government cease or reduce maintenance dredging 
support.
    Businesses that depend on the Harbor generate $53,500,000 a year 
and employ over 700 people. I respectfully request that your 
Subcommittee include $3.2 million to perform the maintenance dredging 
essential to those businesses.
    In addition to O&M dredging, the ``south'' breakwater is in need of 
repair. Exposure to the open ocean and its brute force over the years 
has caused the rocks to dislodge and fall into the water. The 
breakwater is an essential component of the harbor entrance and has not 
received repair in over 30 years. Currently, $2 million is needed to 
make breakwater repairs for a total O&M need of $5.2 million for the 
harbor.
    Morro Bay is a National Estuary and is part of the National Estuary 
Program administered by the Environmental Protection Agency (EPA). 
Curtailed tidal circulation, sedimentation and shoaling threaten not 
only the harbor but many sensitive environmental habitat areas in our 
bay.
    The Morro Bay National Estuary Program is in need of funding to 
perform an analysis of our Estuary's present and future conditions, 
define problems and identify potential solutions. I understand the 
current Administration policy is to restrict reconnaissance studies 
$100,000, however, $400,000 is needed to perform this vital analysis.
    With the continuing loss of wetlands in California and across the 
nation, we should pride ourselves on the fact that we have a chance to 
be proactive and preserve an area with a relatively small amount of 
money.
    I am grateful for the opportunity to present these requests to your 
Subcommittee on behalf of the citizens of the City of Morro Bay.
                                 ______
                                 
Prepared Statement of John Bridley, Waterfront Director, City of Santa 
                              Barbara, CA
    As your distinguished Subcommittee writes the fiscal year 1998 
Energy and Water Resources Appropriations bill, I would like to bring a 
very important Corps of Engineers project to your attention.
    About 400,000 cubic yards of sand piles up every winter at Santa 
Barbara Harbor, and in years of severe storms, the accumulated sand can 
close the channel bringing local fishing and other businesses in the 
harbor to a standstill.
    There is an important Federal interest in maintaining dredging at 
the Harbor. It provides slips and moorings for over 1,000 commercial, 
emergency and recreational boats. It is also an important part of Coast 
Guard operations on California's central coast.
    The President's fiscal year 1998 Budget Request includes $1,492,000 
for operations and maintenance for Santa Barbara Harbor. I respectfully 
request that the House of Representatives, through your Subcommittee, 
maintain that level of funding.
    Thank you for the opportunity to submit this statement.
                                 ______
                                 
 Prepared Statement of the Hon. Karan Mackey, Member, County Board of 
                      Supervisors, Lake County, CA
    Mr. Chairman, Members of the Subcommittee, my name is Karan Mackey. 
I am a member of the Lake County Board of Supervisors, and I appreciate 
this opportunity to present testimony before the Subcommittee on behalf 
of Lake County, California.
    Lake County supports full funding of the President's budget request 
for Northern California Streams--Middle Creek Study (CWC No. 108). This 
continuing study by the Corps of Engineers is important to the 
restoration and protection of Clear Lake. Middle Creek flows into Clear 
Lake which drains into Cache Creek, tributary to the Sacramento River. 
Clear Lake is the largest natural lake entirely within the borders of 
California, and possibly the oldest lake in North America.
    The Middle Creek Flood Control Project was constructed by the Corps 
of Engineers in the early 1960s to provide flood protection to the 
community of Upper Lake and the surrounding agricultural lands. The 
project is owned by the California Reclamation Board and maintained by 
the Lake County Flood Control and Water Conservation District. 
Channelization and the loss of natural floodplain and wetlands have 
caused substantial quantities of nutrient-rich sediment to be 
transported into Clear Lake resulting in degraded water quality in the 
lake and the growth of nuisance blue-green algae. In the past, 
approximately 85 percent of the historic emergent wetlands around Clear 
Lake have been lost or severely degraded. Prior to channelization of 
Middle Creek, flows spread out over a wide floodplain and marsh. Middle 
Creek Marsh was a significant wetland system that provided natural 
biologic and habitat values, marsh land which filtered and trapped 
sediments, and natural flood attenuation. The current creek study by 
the Corps of Engineers is evaluating alternatives for restoring Middle 
Creek Marsh. Restoration would contribute to the goals of Lake County 
to reduce the flood risk of subsiding levees adjacent to the historic 
marsh, to improve water quality in Clear Lake, and to enhance the Clear 
Lake Basin ecosystem for the next generations.
    The Clear Lake basin watershed is our County's and region's most 
important natural resource and economic asset. The sustainability of 
our future is tied largely to the water quality and ecosystem health of 
Clear Lake, and we trust that you will agree with the critical 
importance of restoring and protecting this vital resource with the 
requested funding. Thank you for this opportunity to testify.
                                 ______
                                 
 Prepared Statement of Marc Holmes, Director, Partnership for the San 
                             Pablo Baylands
    Mr. Chairman, Members of the Subcommittee, my name is Marc Holmes. 
I am the Director of the Partnership for the San Pablo Baylands. The 
Partnership for the San Pablo Baylands works to preserve, enhance and 
restore wildlife habitats and agriculture in this rural region in 
northern San Francisco Bay.
    The Partnership believes it is critical to preserve agriculture in 
the region not only because it provides significant extensive economic 
benefits, but because it enhances habitat values and preserves the 
area's open space and scenic beauty.
    To help meet our program mission and goals, the Partnership is 
seeking the assistance of the Committee on two funding requests for 
fiscal year 1998.
    First, the Partnership is seeking $300,000 in fiscal year 1998 from 
the Corps of Engineers under General Investigations to enlist the 
technical assistance of the Corps to help the Partnership develop a 
watershed restoration/protection project in the San Pablo Bay 
watershed. Specifically, the Corp's assistance is needed to examine 
opportunities for wetlands and riparian restoration activities, and the 
need to stabilize and/or modify the existing levee system for the 
benefit of wildlife habitat and continued agricultural uses.
    Last year the Partnership sought from Congress specific authority 
for the Corps to participate in this project. That authority was 
granted to the Corps in Section 503 of the Water Resources Development 
Act of 1996. Now we are seeking a modest appropriation to allow the 
Corps to become a partner in this important project.
    Your favorable consideration of this appropriation would be 
appreciated.
    Our second request is for $300,000 for the Partnership for the San 
Pablo Baylands for the Bureau of Reclamation under General 
Investigation (Mid-Pacific Region) to prepare a study of water 
reclamation and reuse opportunities in Sonoma County. The San Pablo 
Baylands area, like so many areas in the State, is water short. While 
recycled water may provide a new source of supply, there are a number 
of implementation issues that must be addressed to determine the 
practicality of increasing development and use of recycled water. These 
include the proximity of the supply to the potential users, the cost of 
delivered recycled water, water quality, and the flexibility and 
reliability of the supply.
    The funds requested in fiscal year 1998 are needed to enable the 
Bureau of Reclamation to assist the Partnership and its partner, the 
Sonoma County Water Agency, to investigate these technical issues that 
must be addressed before the use of recycled water can be expanded in 
the region.
    Again, the Partnership would appreciate the Committee's favorable 
consideration of these requests, and I appreciate the opportunity to 
submit this testimony on behalf of the Partnership for the San Pablo 
Baylands.
                                 ______
                                 
 Prepared Statement of Richard Fulstone, Chairman, Walker River Basin 
                        Water Users Association
    Mr. Chairman, Members of the Committee, my name is Richard 
Fulstone. I am the chairman of the Walker River Basin Water Users 
Association, a group comprised of virtually all of the farmers and 
ranchers in the Walker River Basin, from both California and Nevada. 
The Walker River Basin Water Users Association's membership includes 
approximately 600 water right holders, as well as public agencies such 
as Mono County, California, and the Mason and Smith Valley Soil 
Conservation Districts.
    On behalf of the Walker River Basin Water Users Association, I 
would like to request your assistance in securing funding for two 
projects of great importance to our area that fall within the 
jurisdiction of the Appropriations Subcommittee on Energy and Water 
Development.
    First, I request that you seek $600,000 for the Walker River Basin, 
Nevada study being conducted by the U.S. Army Corps of Engineers. The 
Committee's past support for this important study is greatly 
appreciated. The $600,000 we are seeking represents a $300,000 increase 
above the amount included in the President's budget request for fiscal 
year 1998. These additional funds are needed to expand the 
reconnaissance study to enable the Corps to develop additional 
information on the hydrologic and hydraulic conditions in the basin. 
This information is key to the completion of a meaningful 
reconnaissance study and is needed before the study can move into the 
feasibility phase.
    As you know, the Walker River Basin experienced serious flooding in 
January of this year due to higher than normal snowfall followed by 
unseasonably warm rainy weather. Flooding occurred in the town of 
Yerington causing temporary closure to area schools and businesses. 
Over 300 people were evacuated and damages were sustained to 
agricultural resources and urban and rural structures. Additionally, 
Walker Lake is becoming increasingly saline. The Corps of Engineers' 
study is important because it is taking a basin-wide approach to 
developing solutions to these and other water resource problems that 
exist along Walker River and in Walker Lake. It is also helping those 
of us who live and work here in the Walker River Basin to fill some of 
the key informational gaps about the basin that currently exist.
    Second, I request that you seek $300,000 for Walker River Basin, 
Nevada for the Bureau of Reclamation, under the Construction Program, 
to support a water conservation demonstration program in the basin. The 
program is being managed by the Walker River Basin Water Users 
Association and the Walker River Irrigation District, and is promoting 
a voluntary approach to water conservation. Federal support is needed 
to identify the universe of the most effective conservation practices 
applicable to the Walker River Basin and to better quantify the 
contribution that conservation can make to solving the water resource 
problems in Walker Lake and the basin as a whole. The demonstration 
program will be coordinated with the State of Nevada, the Mason and 
Smith Valley Conservation Districts, and the United States Department 
of Agriculture's Natural Resource Conservation Service. This is an 
important initiative and your support at this early stage of its 
development would be greatly appreciated.
    Thank you for this opportunity to testify. We would greatly 
appreciate the Committee's continued assistance as we seek to address 
the many important water resource challenges in the Walker River Basin.
                                 ______
                                 
 Prepared Statement of Larry T. Combs, County Administrative Officer, 
                          County of Sutter, CA
    We appreciate the committee's ongoing interest in flood control 
issues in California. The floods of January 1997 underscored once again 
the critical need to ensure adequate flood protection for many of our 
communities.
    As you know, the fiscal year 1998 budget included $7,300,000 for 
Marysville/Yuba City Levee Reconstruction (phase 2, contract #3). In 
light of the recent winter flooding, the California Water Commission is 
recommending an additional $2,000,000 in fiscal year 1998 in order to 
expedite construction at more project sites so that critical levee 
areas can be repaired and improved prior to the 1998 high water season. 
We strongly support the budget request and the CWC's recommendation to 
add $2,000,000 in fiscal year 1998 to expedite additional construction.
    At the same time, during January's high river flow, when Feather 
River (on the Yuba County side) and Sutter Bypass (in Sutter County) 
levees failed, flooding thousands of acres of land in Sutter County, 
several non-project levee sites showed extreme distress. In particular, 
five Feather River levee sites experienced extensive seepage, a series 
of boils, or sloughing at the toe of the levee. These sites include the 
levee between the 10th Street Bridge and Lynn Way in Yuba City, and the 
levees at Burns Drive, Shanghai Bend, Star Bend and Laurel Avenue. 
Extensive emergency flood fighting was conducted during the high river 
period at these sites. The assessment of expert engineers hired by one 
of our local levee districts is that these sites will not likely 
withstand another high water season, even with flood fighting efforts. 
The Army Corps of Engineers' representatives have also acknowledged 
that these sites are highly problematic and need immediate attention.
    With these factors in mind, we are currently in the process of 
working with the Corps of Engineers to repair these damaged levees 
through the Corps' emergency levee repair programs (Public Law 84-99). 
We hope each of the five additional levee sites just mentioned will be 
reconstructed with emergency The Honorable Pete V. Domenici March 28, 
1997 Page 2 funds. However, we are not sure that all of these sites 
will meet the criteria for expedited reconstruction under the emergency 
repair program.
    With this in mind, we are requesting that an additional $2,000,000 
be added to the Marysville/Yuba City Levee Reconstruction budget 
request and CWC recommendation for a total of $11,300,000 in fiscal 
year 1998. Further, we are asking that this additional funding be 
accompanied by report language indicating the need to repair the five 
additional sites (or those not covered by the Corps' emergency 
reconstruction program) before the 1998 high water season.
    We deeply appreciate the committee's past support of Sutter 
County's and Yuba City's levee reconstruction program and look forward 
to your continued support during consideration of the fiscal year 1998 
Energy and Water Development Appropriations bill.
                                 ______
                                 
   Prepared Statement of Robert E. Eichblatt, City Engineer, City of 
                          Huntington Beach, CA
    Dear Mr. Domenici: We are writing to request $300,000 and the 
enclosed language be included in the fiscal year 1998 Energy and Water 
Development Appropriations Bill for the Corps of Engineers to initiate 
a cost-shared Feasibility Study for Federal assistance in a project to 
protect the Huntington cliffs coastline, in Huntington Beach, 
California.
    The Corps of Engineers completed a Reconnaissance Study in 1995 on 
the Federal interest in improvements to reduce the potential for 
coastal erosion and storm damage to City facilities and Pacific Coast 
Highway. This study indicated that there is potential for substantial 
erosion and storm damage to public properties and uses of the bluff 
area, and that plans to reduce damage potential appear to be justified. 
However, the Corps did not recommend proceeding to the Feasibility 
Study phase because the most cost effective plan identified at that 
time was relocation of public facilities, which they claimed is a local 
responsibility. They also claimed that most of the benefits that would 
result from the shore protection improvements were associated with 
reducing the loss of public access and use of the bluff for recreation, 
which they claimed is a low priority for the administration.
    Since completion of the Corps of Engineers Reconnaissance Report, 
the cliffs have experienced further significant erosion during coastal 
storms. This erosion created eight new embayments, resulting in the 
undermining of pedestrian, and bike trails, and damaging other public 
facilities. This has required the City to close public access to these 
popular coastal areas, which were being used by about a million people 
per year. We are concerned that additional storms will continue to 
damage these facilities, as well as adjacent parking areas, utilities, 
and perhaps in the not so distant future, threaten Pacific Coast 
Highway. The significant erosion that occurred during recent events 
also demonstrates that relocation of the facilities, which was 
considered in the Corps of Engineers study, is no longer a reasonable 
alternative. Accordingly, the City would like the Corps to proceed with 
the Feasibility Study Phase.
    The City of Huntington Beach understands that the Feasibility Study 
Phase requires a non-federal sponsor to provide 50 percent of the cost 
of the study, and that one-half of the non-federal share of the cost 
can be in kind services performed by the City.
    The City would be willing and able to provide the non-federal 
share, subject to our negotiating the study program with the Corps of 
Engineers, including costs and schedule.
    If we can provide you with any additional information, please let 
us know. Thank you for your attention to this matter. We look forward 
to hearing from you.
                                 ______
                                 
  Prepared Statement of Thomas W. Wilson, Supervisor, Fifth District, 
          Orange County Hall of Administration, Santa Ana, CA
   newport bay, california, feasibility study and aquatic ecosystem 
                          restoration project
    Mr. Chairman: We support the $270,000 included in the President's 
budget request for the Newport Bay feasibility study in Orange County, 
CA. Additionally, we request that the Committee add $5 million to 
dredge the sediment basin in Upper Newport Bay.
    Section 206 of the Water Resources Development Act of 1996 
authorizes the Corps to participate in aquatic ecosystem restoration 
projects. Dredging the Upper Bay basin will restore critical marine 
habitat which has been impacted by sediment from the San Diego Creek 
watershed.
    The State of California, Orange County, the cities of Irvine, 
Tustin, Newport Beach, and the Irvine Company participated in funding a 
Clean Water Act Section 208 program for the Upper Newport Bay. This 
program was successfully implemented in 1985, restoring 752 acres of 
marine and shoreline wildlife habitat which is now managed by the 
California Department of Fish and Game. Additionally, more than $100 
million has been spent upstream to control sediment.
    The existing sediment basin in the Upper Bay must be cleaned out 
and deepened to include a new 61-acre deep water marine habitat zone. 
The resulting improved sediment storage capacity will reduce future 
clean out frequency and lower the long-term cost of maintenance. 
Approximately 650,000 cubic yard of sediment will be moved.
    We appreciate your past support for the Newport Bay study, and look 
forward to your added support of $5 million for aquatic ecosystem 
restoration in the Upper Newport Bay.
                                 ______
                                 
     Prepared Statement of Dick Lyon, Mayor, City of Oceanside, CA
    The City of Oceanside and the Oceanside Harbor District request 
your support of $1,100,000 as an addition to the fiscal year 1998 
budget for the Oceanside Harbor Maintenance and Operation Dredging 
Program. The funds for this project are not included in the 
Administration budget.
    In 1960, Congress authorized full federal funding for maintenance 
of the Oceanside Harbor entrance (House Document 456, 86th Congress, 
2nd Session, Public law 85-500.) in recognition of the fact that the 
Harbor entrance was constructed as an emergency wartime measure in 
1942. To this day, the Oceanside Harbor entrance continues to serve the 
vital military installation of Camp Pendleton Harbor. In 1992, the 
Harbor District partnered with the federal government in a local cost 
share agreement to modify the harbor entrance and the authorized 
channel depth to reduce storm damage, provide surge protection to the 
harbor's infrastructure and provide significant reduction of 
navigational hazards that have produced 11 deaths, 49 serious injuries, 
134 boating accidents and $1,500,000 of damage to vessels in the harbor 
entrance.
    The harbor expansion project included an expanded dredge area 
within the federal navigation channel and an increase in the dredge 
frequency from once a year to twice each year.
    It is imperative that the federal government uphold the long-
standing legislative commitment that it made. It was because of this 
commitment that the Harbor District agreed to fund the local cost share 
($1,600,000) of the harbor expansion project.
    The history of federal legislative commitment combined with local 
government commitment of resources is significant. The Harbor District 
has no plans to reduce its commitment to the harbor and it is of the 
utmost priority that the federal government maintain its obligations 
and commitments.
    Oceanside Harbor would experience severe negative impacts should 
the dredging project not be funded. Such action would prevent access to 
the Pacific Ocean to the United States Navy and Marine Corps as joint 
users of the entrance channel, as well as the U.S. Coast Guard Cutter 
Point Hobart, which is also based in Oceanside. The economic impact 
upon the local fishing fleet, the commercial sportfishing fleet and the 
1,000 recreational vessels berthed here, as well as the businesses 
supported by the harbor, would be critically impacted.
    The maintenance program is essential for the safe navigation into 
Oceanside Harbor and the U.S. Marine Corps Base Camp Pendleton Harbor. 
The program also provides the associated commerce and recreational 
benefits to our community.
    Thank you for the opportunity to provide this testimony and for 
your consideration of the request.
                                 ______
                                 
     Prepared Statement of Dick Lyon, Mayor, City of Oceanside, CA
    The City of Oceanside requests the Subcommittee's support for 
$5,400,000 as recommended in the President's fiscal year 1998 budget 
for the final phase of construction of the San Luis Rey River Flood 
Control Project in Oceanside, California. This project provides 5.4 
miles of double levee, stone protection with a soft bottom channel, 
1,330 feet of parapet walls, six interior drainage ponds, a five-mile 
bicycle trail, and habitat to mitigate for impacts to the endangered 
least Bell's vireo. Over 90 percent of construction on this project has 
been completed. The remaining portion of the project is the closure of 
a small segment of levee, construction of the lower pond, installation 
of relief wells and additional environmental measures. With the 
proposed funding, construction of the project can be completed by 
December, 1997.
    The City of Oceanside has appreciated the strong support that the 
Subcommittee has offered this project over the years. Completion of the 
San Luis Rey River Flood Control Project will provide flood protection 
to over 100 businesses in the Oceanside Industrial Park and Oceanside 
Municipal Airport area. This flood protection will not only provide a 
tremendous economic benefit to the citizens of Oceanside, but will also 
protect life and property against devastating floods.
    Thank you for your continued support for this important project.
           local high quality water for the city of oceanside
                    mission basin desalting facility
    The City of Oceanside owns and operates the 2 million gallon per 
day Mission Basin groundwater desalting facility, located near Fireside 
Drive in Oceanside.
    Under current operations, approximately 1.9 million gallons per day 
(mgd) of demineralized groundwater supply is produced from treating 
brackish groundwaters in a reverse osmosis treatment facility.
    Because of the successful operation of the existing plant over the 
last three years, the City proposes to expand the production capacity 
of the groundwater desalting program.
    This local water supply provides both a daily potable water supply 
and an emergency water supply.
    Without the City's desalting facility, in the event of a short or 
long term imported water supply emergency, Oceanside would only have a 
few hours to supply its citizens fire protection and essential water 
needs.
Local water supply
    In early 1994 the City of Oceanside commenced producing local water 
from the Mission Basin Aquifer.
    Established by 100 year old water rights, this large, dependable 
water supply holds at least 29,982,800,000 gallons or 92,000 acre feet 
of water.
    The first expansion of the facility is in the design phase and is 
expected to provide up to 6.3 million gallons per day (mgd) or 22 
percent of the City's daily average demand.
    The additional water supply will be available by late 1998.
    Oceanside will continue to develop this excellent resource in the 
future.
    It is anticipated that at least 50 percent of Oceanside's future 
water supply can be derived from this source.
    Water quality produced by the facility will be much better than the 
water quality that is available from imported sources.
    The water quality of the City's imported source is approximately 
600 to 700 parts per million of total dissolved solids (TDS) whereby 
the water quality of the local supply will be between 400 to 500 TDS.
    This will enhance the City's ability to reclaim its wastewater 
which will be used for a sea water barrier on the downstream side of 
the Mission Basin Aquifer, and will also be utilized for maintaining an 
environmentally safe water level in the aquifer.
    Oceanside's local water supply has received support from many 
agencies including the state of California, which loaned the City five 
million dollars to build the original facility over two years ago.
    The Metropolitan Water District of Southern California and the San 
Diego County Water Authority have assisted by paying the difference 
between the cost to produce the local water and the cost to buy 
imported water since the startup of the plant.
    Neighboring local agencies such as Carlsbad, Vista Irrigation, and 
the San Diego County Water Authority along with Federal, State and 
Local government representatives worked closely with Oceanside when 
developing the original project.
    Oceanside recently signed an agreement with Marine Corp Base Camp 
Pendleton to provide Camp Pendleton up to 2 mgd of emergency water.
    This local water supply saves the City $150,000 per year today and 
will save at least $500,000 per year when it is expanded to 6.3 mgd.
    These savings will help keep Oceanside's rates very comparable to 
or lower than average rates when compared with surrounding communities.
                          request for funding
    The cost to construct the Oceanside Desalting Facility first 
expansion is approximately 6 million dollars.
    In future years the City expects to expand the facility up to over 
20 million gallons per day. The estimated cost to do so will exceed 20 
million dollars.
    For the first phase expansion, the City requests that the Federal 
Government appropriate 1.5 million dollars to cover the 25 percent 
share of the 6 million dollars needed to construct the project. The 
request is to obtain this funding in fiscal year 1998.
[GRAPHIC] [TIFF OMITTED] TPS.002

                                 ______
                                 
Prepared Statement of Sandra Y. Marker, Mayor, Town of Corte Madera, CA
    The Town of Corte Madera, California requests that the Subcommittee 
support a budget allocation in fiscal year 1998 of $150,000 to complete 
the Feasibility Report for the San Clemente Creek Tidal Storm Damage 
Reduction Study. The project name is Marin County Shoreline--San 
Clemente Creek, CA.
    The Town of Corte Madera is located on San Francisco Bay just north 
of the Golden Gate Bridge. The Town has experienced repeated flooding 
in the last 50 years. The most recent devastating floods occurred in 
1982 and 1983. Such flooding is becoming increasingly worse due to 
continuing subsidence, increasing sea level rise and storm water 
runoff. Serious damage on a regular basis is predicted in the next 
decade if a Federal storm damage and coastline protection project is 
not completed. Tidal flooding now occurs even in dry weather. Without a 
permanent solution, the losses to properties will be severe. Current 
damage estimates from a 100 year storm are $1.5 million. By the year 
2035, damage estimates total at least $4.6 million for each 100 year 
storm event. Ultimately, hundreds of property owners will face the 
total loss of their homes. Public and commercial property will suffer 
heavy damage resulting in a substantial loss of the tax base. The 
apparent project benefit cost ratio is 2.5 to 1.
    The Town of Corte Madera is committed to insuring public safety. To 
that end, the Town and the U.S. Army Corps of Engineers negotiated a 
Cost Sharing Agreement to conduct a Feasibility Study to define the 
federal interest and to develop a protection project plan.
    The Town Council approved the Cost Sharing Agreement and paid its 
full share of all local costs and is prepared to pay its full share of 
Pre-Engineering and Design, and Construction costs when those project 
phases are reached.
    The Subcommittee provided appropriations to initiate the 
Feasibility Study in 1993. The California Marine Affairs and Navigation 
Conference is supporting the $150,000 which is included in the 
President's fiscal year 1998 Budget to complete the Feasibility Study.
    We respectfully request that you support a fiscal year 1998 
appropriation of $150,000 to complete the Marin County Shoreline--San 
Clemente Creek CA Feasibility Study.
    Thank you very much for your continuing support for this public 
safety project.
                                 ______
                                 
   Prepared Statement of Chuck Hammond, Mayor, City of Fairfield, CA
    Mr. Chairman, Members of the Subcommitee, my name is Chuck Hammond. 
I am the Mayor of the City of Fairfield, California. The City of 
Fairfield is seeking the assistance of the Committee in funding two 
projects in the fiscal year 1998 energy and water appropriations bill.
    First, I request the support of the Committee for the Northern 
California Streams, Fairfield Streams and Cordelia Marsh, California 
study. The budget request includes $250,000 for this important study. 
The study will investigate and seek to develop a comprehensive solution 
to the flooding, drainage problems, environmental degradation and other 
water resource problems found within the Fairfield Streams and Cordelia 
Marsh sub-basin. Flooding and erosion have been persistent problems in 
the area and the results of this study, we believe, will be key to the 
development of an effective and permanent solution to this pervasive 
problem.
    Second, I request the Committee's support for one new, related 
initiative. Specifically, I request that the Committee provide 
$500,000, under the Corps of Engineers, Section 206 program, for the 
Fairfield Streams and Suisun Marsh Watershed Demonstration Project. The 
project seeks to build on the work of the aforementioned study and the 
work of the City of Fairfield to develop a solution to the problem of 
siltation in Suisun Marsh.
    The Suisun Marsh is the largest tidal wetland in the State of 
California and is considered a natural resource of national importance. 
The marsh includes more than 2,500 acres of managed wetlands and 
uplands that support habitat for migratory waterfowl. It is a critical 
part of the Pacific Flyway. Yet, an estimated 200 acres of valuable 
wetlands in Suisun Marsh have been ruined by the inflow of silt from 
surrounding streams over the last two years.
    The project will provide for the design and construction of 
sediment containment ponds upstream of Suisun Marsh. Specifically, one 
proposal calls for the construction of a sediment containment pond on 
Hennessey Creek. Hennessey Creek is a tributary to Green Valley Creek, 
which flows directly into the northern portion of Suisun Marsh. The 
City of Fairfield has been monitoring water quality in Hennessey Creek 
during rainfall events. On December 12, 1995, for example, the total 
suspended solids (TSS) in Hennessey Creek were measured at 12,344 
milligrams per liter of water. On January 16, 1996, the TSS were 19,700 
milligrams per liter of water. On March 4, 1996, the TSS were 15,620 
milligrams per liter of water. As a comparison, the California Regional 
Water Quality Control Board has stated that the TSS should not exceed 
100 milligrams per liter.
    Clearly, construction of a sediment pond on Hennessey Creek would 
significantly reduce one major source of sedimentation in Suisun Marsh. 
And, it is critical that we construct this and other such ponds as soon 
as possible. Continuing to lose 200 acres of valuable wetlands every 
few years is not acceptable. That is why we are seeking to accelerate 
the construction of some portion of the solution.
    A demonstration project like the one I have described clearly 
qualifies for funding under the Section 206 authority. The project is 
environmentally beneficial, economically justified and in the public 
interest, the three criteria for funding under Section 206. Further, it 
is our expectation that the aforementioned Northern California Streams, 
Fairfield Streams and Cordelia Marsh, California study, the first phase 
of which will be concluded by the end of the current fiscal year, will 
include a recommendation that such a demonstration project be initiated 
using the Section 206 authority. For all of these reasons, we ask that 
the Committee provide $500,000 for this important project.
    Again, I appreciate the opportunity to testify on behalf of the 
City of Fairfield, and I urge your support for these two priority 
projects for our region.
                                 ______
                                 
Prepared Statement of Keith Israel, General Manager, Monterey Regional 
                     Water Pollution Control Agency
    Mr. Chairman, thank you for the opportunity today to provide this 
testimony for inclusion in the hearing record on the fiscal year 1998 
Energy and Water Development appropriations bill. Monterey Regional 
Water Pollution Control Agency (MRWPCA), a joint-powers entity formed 
under the laws of the State of California, was created in 1971 to 
implement a plan that called for consolidation of the Monterey 
Peninsula and northern Salinas Valley wastewater flows through a 
regional treatment plant and an outfall to central Monterey Bay. The 
plan also required studies to determine the technical feasibility of 
using recycled water for irrigation of fresh vegetable food crops 
(artichokes, celery, broccoli, lettuce, and cauliflower) in the 
Castroville area. These studies were initiated in 1976 and included a 
five-year full-scale demonstration of using recycled wastewater for 
food crop irrigation. California and Monterey County health departments 
concluded in 1988 that the water was safe for food crops that would be 
consumed without cooking. Subsequently, the Salinas Valley Seawater 
Intrusion Committee voted to include recycled water in their plan to 
slow seawater intrusion in the Castroville area.
    The project will ultimately provide 19,500 acre-feet of recycled 
water to land south and west of Castroville where abandonment of wells 
threatens agricultural production and the loss of a portion of rural 
America. It will also reduce discharge of secondary treated wastewater 
to the recently-created Monterey Bay National Marine Sanctuary. The 
California State Water Resources Control Board specifically indicated 
its strong support for the Salinas Valley Reclamation Project in a 1994 
letter to the U.S. Bureau of Reclamation.
    Before continuing, let me express my sincere appreciation for your 
continued support for the Small Reclamation Projects Loan Program, and 
specifically, the funding for the Salinas Valley Reclamation Project. 
During the past three years, this subcommittee provided $3.5 million 
for our project. I am pleased to report that the funds appropriated 
thus far are being well spent on our project which began construction 
in August 1995. We are on schedule and are looking forward to startup 
of the completed project by early September, 1997. Construction of our 
project is now over 75 percent complete.
    As in the past, we have been in close consultation with the Bureau 
of Reclamation and the other Small Reclamation Projects Loan Program 
participants in an attempt to provide the Committee with a consensus 
budget request that has the support of the Administration and the Loan 
Program participants. Based on these discussions, the Administration 
has requested, with our support and endorsement, sufficient funding for 
the Salinas Valley Reclamation Project as part of the Bureau of 
Reclamation's Public Law 84-984 Small Reclamation Projects Loan Program 
for continuation of loan obligations. This appropriation amount, $1.3 
million, when combined with other federal funding which is available 
from the U.S. Treasury pursuant to the Federal Credit Reform Act of 
1990, will yield a total loan amount that we believe will meet the 
federal government's commitment for fiscal year 1998. The amount 
requested, when combined with the additional Treasury portion, is 
intended to fulfill the Bureau's third-year loan commitment for 
assistance to construct the project. As I indicated, the funding 
request is the result of a lengthy and complex financial agreement 
worked out with the other Loan Program participants and the Bureau. The 
agreement represents the absolute minimum annual amount necessary to 
continue with the project. The MRWPCA worked under the premise of 
accommodating the Bureau of Reclamation's budgetary constraints and is 
expending consideration local funds to bridge the federal government's 
budgetary shortfall. Any additional cuts in federal funding will 
jeopardize the complex financing plan for the project.
    The MRWPCA has received Federal Grant and Loan Funds in Federal 
fiscal year 1995, fiscal year 1996, and fiscal year 1997 through 
February 28, 1997, as follows:

----------------------------------------------------------------------------------------------------------------
                                                                                Fiscal year                     
                                                          ------------------------------------------------------
                                                               1995         1996         1997          1998     
----------------------------------------------------------------------------------------------------------------
SVRP: USBR...............................................     $900,000   $1,100,000   $1,500,000  \1\ $1,300,000
SVRP: Treasury...........................................      570,000      880,000    1,561,000  ..............
FEMA.....................................................  ...........       16,805        1,492  ..............
EPA......................................................  ...........       30,144  ...........  ..............
----------------------------------------------------------------------------------------------------------------
\1\ Requested                                                                                                   

    Even though the additional private debt service will increase the 
project costs, the critical problem of seawater intrusion demands that 
the project be continued. The Bureau of Reclamation loan is a crucial 
link in project funding, and it is imperative that annual 
appropriations, even at the planned reduced rate over eight years, 
continue. The federal funds requested under the Public Law 84-984 
program will be repaid by landowners in the Salinas Valley with 
assessments that are currently in place. Local funds totaling $18.6 
million have already been spent getting to this point.
    Mr. Chairman, we urge you and the members of the subcommittee to 
give your continued support to the Small Reclamation Projects Loan 
Program, and specifically, funding for the Salinas Valley Reclamation 
Project. Your support and continued assistance for this critical 
project is greatly appreciated.
                                 ______
                                 
 Prepared Statement of Michael D. Armstrong, General Manager, Monterey 
                     County Water Resources Agency
    Mr. Chairman, thank you for the opportunity to provide testimony 
for inclusion in the hearing record of the fiscal year 1998 Energy and 
Water Development Appropriations bill. The people of the Salinas Valley 
in California's 17th Congressional District appreciate your willingness 
to accept our statements in support of the Castroville Seawater 
Intrusion Project. I would further like to express our deep 
appreciation for this subcommittee's efforts on past Energy and Water 
Development Appropriations bills. I am pleased to report that the 
project is approximately 85 percent complete and that project 
construction is on schedule to be completed in July 1997.
    As with the past three years the Monterey County Water Resources 
Agency has worked diligently to present the committee with an fiscal 
year 1998 funding request that is supported by the Administration as 
well as all the other Small Reclamation Loan Program participants. 
Through close consultation with the Bureau of Reclamation and other 
Program participants, we have developed the funding plans that were 
included in the President's fiscal year 1998 budget for the Public Law 
84-984 Small Reclamation Loan Program. I therefore respectively request 
that the Subcommittee provide the full Administration request for the 
project of $2.1 million.
    This is the fourth year of an eight year fiscal strategy designed 
to meet the requirements of all the projects in the Program while 
recognizing the fiscal constraints facing all levels of government. 
Originally, the Program was to provide all appropriations ($16,500,000) 
over a three year period. During the past three years this subcommittee 
provided $4.564 million for our project. The current appropriation 
amount of $2.1 million, when combined with other federal funding which 
is available from the U.S. Treasury in the amount of $2.12 million 
pursuant to the Federal Credit Reform Act of 1990, should yield a total 
loan amount of $4.22 million for fiscal year 1998 that will allow the 
project to proceed on schedule.
    The Monterey County Water Resources Agency is a local government 
entity formed under the Monterey County Water Resources Agency Act. It 
is an agency with limited jurisdiction involving matters related 
primarily to flood control and water resources conservation, 
management, and development. The Salinas Valley is a productive 
agricultural area that depends primarily on ground water as a water 
supply. The combination of the Valley's rich soils, mild climate, and 
high quality ground water makes this valley unique among California's 
most fertile agricultural lands and has earned the Valley the 
distinction as the ``Nation's Salad Bowl.'' As agricultural activity 
and urban development have increased in the past forty years, ground 
water levels have dropped allowing seawater to intrude the coastal 
ground water aquifers. Seawater intrusion is extensive adjacent to the 
coast near the town of Castroville. The Castroville Seawater Intrusion 
Project will provide 19,500 acre-feet of recycled water for 
agricultural irrigation to over 12,000 acres and help solve the 
seawater intrusion problem by greatly reducing groundwater pumping in 
the project area. The California State Water Resources Control Board 
specifically indicated its strong support for the Castroville Seawater 
Intrusion Project in a 1994 letter to the USBR. The Castroville 
Seawater Intrusion Project is an essential component in the MCWRA's 
plan to deal with basin-wide ground water overdraft and seawater 
intrusion.
    The amount requested in fiscal year 1998, when combined with the 
additional Treasury portion, is intended to fulfill the Bureau's fourth 
year loan commitment for assistance to construct the project. As I 
stated, the funding request that we anticipate is the result of a 
lengthy and complex financial agreement worked out with the other Loan 
Program participants and the Bureau. The agreement recognized the tight 
federal budgetary constraints and represents the absolute minimal 
annual amount necessary to proceed with the project. The MCWRA has been 
extremely accommodating of the Bureau's budgetary constraints and has 
agreed to expend considerable local funds to bridge the federal 
government's budgetary shortfall. Any additional cuts in federal 
funding will jeopardize the complex financing plan for the project.
    In August 1992, the original loan request was submitted to the 
Bureau. Subsequent approval was received from the Secretary of the 
Interior in May 1994. Through extensive discussion and negotiations 
between the MCWRA and the Bureau, a project financing plan was created. 
The Bureau made it quite clear that the original provisions in the loan 
application of full disbursement during the three years of construction 
could not be met due to federal budget shortfalls. As defined in the 
new repayment contract, the Bureau will disburse funds to the MCWRA 
over an eight-year period. This means that the MCWRA will receive these 
funds for five years after the project is operational. This also 
required that the MCWRA had to acquire ``bridge financing'' to meet the 
needs of the Castroville Seawater Intrusion Project construction costs. 
Even though the additional private debt service has increased the 
project costs, the critical problem of seawater intrusion demands that 
the project proceed. The Bureau loan is a crucial link in project 
funding, and it is imperative that the annual appropriations, even at 
the planned reduced rate over eight years, continue. Federal 
appropriations have been received in fiscal years 1995, 1996, and 1997 
as shown in the table below and must continue in subsequent years in 
accordance with the negotiated agreement in order for the projects to 
be successful. The federal funds requested under the Public Law 84-984 
program will be repaid by landowners in the Salinas Valley with 
assessments that are currently in place. The Monterey County Water 
Resources Agency has spent approximately $35.4 million of its own funds 
getting to this point.

                                           FEDERAL APPROPRIATIONS \1\                                           
                                                  [In millions]                                                 
----------------------------------------------------------------------------------------------------------------
                                                                       Received                                 
                                                          --------------------------------- Requested    Total  
                                                              1995       1996       197        1998             
----------------------------------------------------------------------------------------------------------------
CSIP.....................................................     $1.064       $1.5       $2.0       $2.1     $6.664
----------------------------------------------------------------------------------------------------------------
\1\ Does not include Treasury portion which totals $4.032 million through fiscal year 1997.                     

    Mr. Chairman, we urge you and the members of the subcommittee to 
give your continued support to the Small Reclamation Program and urge 
the inclusion of funds for the Castroville Seawater Intrusion Project. 
Without your continued support, we will not be able to realize the 
benefit of the work completed over the past several years and the 
Salinas ground water basin will continue to deteriorate, creating a 
significant threat to the local and state economies as well as to the 
health and welfare of our citizens.
    Again, thank you for your support and continued assistance.
                                 ______
                                 
 Letter From Joseph L. Campbell, President, Contra Costa Water District
                                                    March 11, 1997.
Hon.Pete Domenici,
Chair, Senate Energy and Water Development Appropriations Subcommittee, 
        United States Senate, Washington, D.C.
    Dear Senator Domenici: On behalf of the Contra Costa Water District 
this letter serves as testimony to the Energy and Water Development 
subcommittee regarding the Contra Costa Canal fish screen project for 
fiscal yar 1998. The Contra Costa Water District requests that you 
include an appropriation of $2.5 million in funding for the third year 
of work on the design and construction of the Contra Costa Canal intake 
fish screen project. The Secretary of Interior is required to build the 
screen by Section 3406(b) of Public Law 102-575, Central Valley Project 
Improvement Act (CVPIA). The project will screen the diversion for the 
Contra Costa Canal, the principal intake facility for the 400,000 
people served by the District.
    Because a 1998 deadline was established by the Fish and Wildlife 
Service for completion of this facility, it is imperative that 
sufficient funding be appropriated in the coming year to allow the 
project to move forward at maximum feasible speed
    Congress recognized this need in the previous two budgets. In 
fiscal year 1996 $80,000 was appropriated to begin the project. For 
fiscal year 1997, Congress appropriated $500,000. This has enabled the 
development and design work to move forward rapidly for this important 
project, which will screen the largest M&I Intake in the Delta.
    The State of California is working with the Contra Costa Water 
District to assure that the required state funding is available at an 
appropriate time to complete this facility. Voters in the state of 
California confirmed their willingness to support such projects last 
November when they passed Proposition 204 by a substantial margin. 
Prop. 204 provides funds for the necessary state match for CVPIA 
projects, including the Contra Costa Canal Fish Screen. Moreover, Prop. 
204 gives priority to projects such as the Contra Costa Canal Fish 
Screen which have specific dates established for their completion
    To assure that this important project is completed on or near the 
established schedule and that the water supplies for 400,000 people in 
Contra Costa County are not jeopardized the District requests your 
committee's support for the appropriation of sufficient funds to move 
this project forward in a rapid manner.
            Sincerely,
                                        Joseph L. Campbell,
                                     President, Board of Directors.
                                 ______
                                 
Prepared Statement of Al Donner, Director, Public Affairs, Contra Costa 
                             Water District
    The Contra Costa Water District appreciates the support provided in 
the past two fiscal years by the California Water Commission for the 
fish screen on the Contra Costa Canal intake on Rock Slough. The Contra 
Costa Canal is the largest Central Valley Project intake serving a 
municipal and industrial water supply in the Delta. The fish screen is 
required by the Central Valley Project Improvement Act (CVPIA). The 
project has a deadline for completion of October 1, 1998, established 
by federal agencies. Because the intake is central to the water supply 
for 400,000 people and the major industries in Contra Costa County, it 
is vital that the fish screen be completed as rapidly as possible to 
avoid jeopardizing the District's water supply. Matching funds are 
available from the state under Proposition 204, which gave it a 
priority.
    For fiscal year 1998, the District requests the Commission's 
support for a federal appropriation of $2,500,000. This is the sum 
which the US Bureau of Reclamation design team anticipates will be 
needed to keep the project on schedule as it moves into construction 
during fiscal year 1998. Commission support for an appropriation at 
that level will be important to the District in convincing Congress to 
make an adequate appropriation to keep the project on schedule. With 
the Commission's assistance and support, the District believes that 
this project can be completed in the near future and thereby protect 
the water supply for the Contra Costa Water District and also provide 
the additional protection that the CVPIA envisioned for the vital Delta 
fishery.
    The District very much appreciates your support and will continue 
to work the Commission.
                                 ______
                                 
Prepared Statement of Sandra Y. Marker, Mayor, Town of Corte Madera, CA
    The Town of Corte Madera, California requests that the Subcommittee 
support a budget allocation in fiscal year 1998 of $150,000 to complete 
the Feasibility Report for the San Clemente Creek Tidal Storm Damage 
Reduction Study. The project is listed under Marin County Shoreline--
San Clemente Creek, CA.
    The Town of Corte Madera is located on San Francisco Bay just north 
of the Golden Gate Bridge. The Town has experienced repeated flooding 
in the last 50 years, the most recent devastating floods occurred in 
1982 and 1983. Such flooding is becoming increasingly worse due to 
continuing subsidence, increasing sea level rise and storm water 
runoff. Serious damage on a regular basis is predicted to occur in the 
next decade if preventive measures are not taken now. Tidal flooding 
now occurs even in dry weather. Without a permanent solution, the 
losses to properties will be severe. Current damage estimates from a 
100 year storm are $1.5 million. By the year 2035, damage estimates 
total at least $4.6 million for each 100 year storm event. Ultimately, 
hundreds of property owners will face the total loss of their homes. 
Public and commercial property will suffer heavy damage resulting in a 
substantial loss of the tax base. The apparent project benefit cost 
ratio is 2.5 to 1.
    The Town of Corte Madera is committed to maintaining the 
community's safety and quality of life. To that end, the Town and the 
U.S. Army Corps of Engineers negotiated a Cost Sharing Agreement to 
conduct a Feasibility Study to define the flooding problem and to 
develop a plan for Congressional action.
    The Town Council approved the Cost Sharing Agreement and paid its 
full share of all local costs and is prepared to pay its full share of 
Pre-Engineering and Design, and Construction costs when those project 
phases are reached.
    With the assistance of the Subcommittee in the past, the Town 
secured funding to initiate the Feasibility Phase in 1993. This year, 
the California Marine Affairs and Navigation Conference is supporting 
the $150,000 included in the President's fiscal year 1998 Budget to 
complete the Feasibility Report.
    We respectfully request that you support a fiscal year 1998 budget 
allocation of $150,000 to complete the Marin County Shoreline--San 
Clemente Creek CA Feasibility Study.
    Thank you very much for your continuing support for this important 
project.
                                 ______
                                 
        Prepared Statement of the Irvine Co., Newport Beach, CA
    Mr. Chairman: We support the $270,000 included in the President's 
budget request for the Newport Bay feasibility study in Orange County, 
California. Additionally, we request that the Committee add $5 million 
to dredge the sediment basin in Upper Newport Bay.
    Section 206 of the Water Resources Development Act of 1996 
authorizes the Corps to participate in aquatic ecosystem restoration 
projects. Dredging the Upper Bay basin will restore critical marine 
habitat which has been impacted by sediment from the San Diego Creek 
watershed.
    The State of California, Orange County, the cities of Irvine, 
Tustin, Newport Beach, and The Irvine Company participated in funding a 
Clean Water Act Section 208 program for the Upper Newport Bay. This 
program was successfully implemented in 1985, restoring 752 acres of 
marine and shoreline wildlife habitat which is now managed by the 
California Department of Fish and Game. Additionally, more than $100 
million has been spent upstream to control sediment.
    The existing sediment basin in the Upper Bay must be cleaned out 
and deepened to include a new 61-acre deep water marine habitat zone. 
The resulting improved sediment storage capacity will reduce future 
clean out frequency and lower the long-term cost of maintenance. 
Approximately 650,000 cubic yard of sediment will be moved.
    We appreciate your past support for the Newport Bay study, and look 
forward to your added support of $5 million for aquatic ecosystem 
restoration in the Upper Newport Bay.
                                 ______
                                 
    Prepared Statement of the San Joaquin Area Flood Control Agency
    Mr. Chairman, the San Joaquin Area Flood Control Agency (SJAFCA) 
supports the Administration's budget request of $450,000 for the 
Stockton Metropolitan Area flood control study. This will initiate the 
feasibility study for improvements to the flood protection system in 
the Stockton, California area.
    This study will identify the federal project to restore an adequate 
level of flood protection in Stockton. The local sponsor has already 
responded to the flood threat by initiating construction of 
approximately $70 million in project improvements, including raising 
levees and constructing detention basins. The local sponsor was 
compelled to expedite project improvements because of pending 
floodplain map revisions which would have designated the entire 
metropolitan area as a floodplain. Because local government has taken 
the lead on project improvements, construction will be completed within 
three years of notification that the existing flood protection system 
was inadequate.
    SJAFCA has secured provisions in the Water Resources Development 
Act of 1996 to allow a local sponsor to be reimbursed for the federal 
share of project costs and receive credit for the appropriate local 
share. The study in the Administration's budget request is an important 
and necessary step in this process. This project demonstrates the 
expediency and cost-effectiveness of allowing a local sponsor to take 
the lead in constructing flood control projects.
    We appreciate the Committee's past support, and we look forward to 
your continued support as the feasibility study is initiated in fiscal 
year 1998.
                                 ______
                                 
         Prepared Statement of the City of Huntington Beach, CA
    Mr. Chairman and members of the Subcommittee, the City of 
Huntington Beach appreciates your past support for the Infrastructure 
Seismic Reliability/Restoration Study which was initiated last year. 
The City requests $800,000 to complete the study in fiscal year 1998.
    The Water Resources Development Act of 1990 (Public Law 101-640) 
and amendments in 1996 (Public Law 104-303) authorize the Corps of 
Engineers to address the seismic reliability and restoration of 
Southern California's public works infrastructure to ensure full 
service levels in the event of a major seismic event. The Huntington 
Beach study includes an assessment of conditions and parameters 
affecting the city's water, sewer, and drainage systems, as well as the 
emergency response infrastructure related to each of these systems. 
Conducting this study now and constructing the necessary improvements 
will significantly improve public safety and reduce damage repair costs 
after a major earthquake.
    Two faults run through the City of Huntington Beach, leaving the 
city vulnerable to significant earthquake damage. Application of 
generic principles to the unique nature of seismic activity in Southern 
California is not a cure. Obviously, this information is helpful, but 
real cost benefit will be derived only through an evaluation of 
Huntington Beach's needs and studying that mitigation which will 
guarantee the delivery of essential water related services to our 
citizens.
    The second phase of the study to be conducted with fiscal year 1998 
funds will focus on the following six elements:
  --Seismic upgrading of water system facilities, including reservoirs, 
        transmission and distribution pipelines, bridge crossings, pump 
        stations, wells, control centers and imported supply 
        facilities.
  --Backup emergency water supplies, including regional water supply 
        augmentation.
  --Seismic reliability of sewer and drainage systems.
  --Temporary and standby power requirements for all water, sewer, and 
        drainage pumping systems and emergency response.
  --Capital outlay requirements.
  --Economic base study to ascertain the benefit versus cost of planned 
        improvements on an avoided cost basis due to potential damage 
        to public infrastructure.
    Nature disasters cost the economy and local, regional, state, and 
federal governments billions of dollars in damage, emergency response, 
and reconstruction of public infrastructure. The 1994 Northridge 
earthquake in our region was the most costly natural disaster in U.S. 
history. A larger quake on the San Andreas fault or the Newport-
Inglewood fault near Huntington Beach could cost thousands of lives and 
approximately $70 billion in property damage. This type of disaster 
would be significantly exacerbated if water systems did not survive the 
quake, or were not restored quickly afterwards.
    The Huntington Beach study will result in more reliable water 
systems for hundreds of thousands of residents in Southern California. 
We urge the Subcommittee to provide funds for this critical work.
                                 ______
                                 
          Prepared Statement of the City of Newport Beach, CA
    Mr. Chairman: We support the $270,000 included in the President's 
budget request for the Newport Bay Feasibility Study in Orange County, 
California. Additionally, we request that the Committee add $5 million 
to dredge the sediment basin in Upper Newport Bay.
    Section 206 of the Water Resources Development Act of 1996 
authorizes the Corps to participate in aquatic ecosystem restoration 
projects. Dredging the Upper Bay basin will restore critical marine 
habitat which has been impacted by sediment from the San Diego Creek 
watershed.
    The State of California, Orange County, the cities of Irvine, 
Tustin, Newport Beach, and The Irvine Company participated in funding a 
Clean Water Act Section 208 program for the Upper Newport Bay. This 
program was successfully implemented in 1985, restoring 752 acres of 
marine and shoreline wildlife habitat which is now managed by the 
California Department of Fish and Game. Additionally, more than $100 
million has been spent upstream to control sediment.
    The existing sediment basin in the Upper Bay must be cleaned out 
and deepened to include a new 61-acre deep water marine habitat zone. 
The resulting improved sediment storage capacity will reduce future 
clean out frequency and lower the long-term cost of maintenance. 
Approximately 650,000 cubic yard of sediment will be moved.
    We appreciate your past support for the Newport Bay Study, and look 
forward to your added support of $5 million for aquatic ecosystem 
restoration in the Upper Newport Bay.
                                 ______
                                 
      Prepared Statement of Karan Mackey, Member, County Board of 
                      Supervisors, Lake County, CA
    Mr. Chairman, Members of the Subcommittee, my name is Karan Mackey. 
I am a member of the Lake County Board of Supervisors, and I appreciate 
this opportunity to present testimony before the Subcommittee on behalf 
of Lake County, California.
    Lake County has four requests for your consideration. First, we 
would like to support full funding of the President's budget request 
for the Northern California Streams-Middle Creek study (CWC No. 108). 
This is an important study looking at ways to reduce sediment flow into 
Clear Lake and, in general, restore the Middle Creek watershed. Second, 
we want to express Lake County's continuing support for the Northern 
California Streams-Dry Creek-Middletown study (CWC No. 106). This is an 
important flood damage prevention study that was initiated by the Corps 
at the County's request with support from Congress last year. Like the 
Middle Creek study, funding for this study is in the President's budget 
request.
    In addition to these requests, the County is also seeking funding 
for two components of an important project that is not in the 
President's budget request. This project is focused on actions that can 
be taken immediately to improve the water quality of Clear Lake, and 
take advantage of new authority granted to the Corps of Engineers in 
the Water Resources Development Act of 1996. This is critically 
important to the County, and we urge your careful and favorable 
consideration.
    First, Lake County seeks $1,000,000 in fiscal year 1998 for the 
Clear Lake Basin Watershed Restoration Project. The County seeks these 
funds in the Corps of Engineers' General Investigations account. We 
understand the Corps' new policy that limits funding for reconnaissance 
studies to $100,000; however, we are seeking funds not for a 
traditional reconnaissance study, but rather pursuant to Section 503 of 
the Water Resources Development Act of 1996, Watershed Management, 
Restoration and Development. Funds appropriated pursuant to Section 503 
are available on a 50/50 cost-share basis for planning, design and 
technical assistance for non-federal projects in the Sacramento River 
watershed, among others, for purposes of water quality management and 
restoration, and protection and restoration of watersheds. The Clear 
Lake watershed is within the Sacramento River watershed and the project 
that we are undertaking is precisely that envisioned in the 
legislation.
    Our project seeks to develop a coordinated system of Clear Lake 
basin-wide wastewater and ecosystem improvements. The objectives 
include wastewater management and restoration of ecosystems adjacent to 
the Lake to substantially improve water quality. Clear Lake pollutant 
loadings will be reduced by, among other things, stopping millions of 
gallons of untreated sewage from entering the Lake annually from 
overloaded wastewater facilities. This will improve the water quality 
for 36 public water systems that currently draw drinking water supplies 
from Clear Lake; eliminate the area's last potential effluent discharge 
to the Sacramento River Basin from the community of Clearlake Oaks; 
and, promote the restoration of natural wetlands, 85 percent of which 
have been lost in the Clear Lake basin. Planning, design, and technical 
assistance enabled by Section 503 funding will be used to advance 
solutions to the overloaded wastewater facilities, as well as assist in 
initiating ecosystem restoration projects, such as sediment pending to 
further reduce nutrient flow into the Lake. Of the $1,000,000 
requested, $300,000 will be devoted to planning wastewater improvements 
and ecosystem restoration projects; the remaining $700,000 will 
accomplish final design of those improvements and projects.
    The second new request we have is for $1,000,000 for the same Clear 
Lake Basin Watershed Restoration Project, but under new authority 
granted to the Corps of Engineers by Section 206, Aquatic Ecosystem 
Restoration. Funds appropriated pursuant to Section 206 are available 
on a 65-35 cost-share basis (federal share 65 percent) for planning, 
design, technical assistance, and construction. Funds are needed under 
this authority because we have project components that can go to 
construction immediately to improve the water quality in Clear Lake, 
and significantly advance our solutions to the very serious problems 
that now exist in the watershed. Specifically, the $1,000,000 will be 
used to construct improvements to the Northwest Regional Wastewater 
System around Clear Lake, which will not only eliminate untreated 
wastewater from flowing into Clear Lake, but will also generate 
recycled water for habitat creation and agricultural irrigation.
    The Clear Lake basin watershed is our County's and region's most 
important natural resource and economic asset. The sustainability of 
our future is tied largely to the water quality and ecosystem health of 
Clear Lake, and we trust that you will agree with the critical 
importance of restoring and protecting this vital resource with the 
requested funding. Thank you for this opportunity to testify.
                                 ______
                                 
 Prepared Statement of Charles F. Kaiser, President, Twentynine Palms 
                           Water District, CA
    The Twentynine Palms Water District is requesting $1.75 million 
from the Bureau of Reclamation to assist with design and construction 
of a water reclamation facility. This facility will provide a critical 
source of water for the Twentynine Palms area of San Bernardino County.
    The District is the sole provider of water in this high desert 
area. Existing groundwater supplies are over drafted, and a new 
dependable source of water must be developed. The only feasible 
alternative is to construct a groundwater treatment facility for the 
Mesquite Springs aquifer. This aquifer is estimated to contain one 
million acre feet of water, providing a dependable supply of water for 
the next 200 years.
    The Mesquite Springs aquifer contains high quality water except for 
high concentrations of fluoride. The planned treatment facility will 
absorb fluoride ions to activated aluminum surfaces. The plant's 
initial design capacity will be 3 million gallons per day (MGD) with 
the ability to expand to 5 MGD in the future. This proposed 
defluoridation process has never been implemented at this large volume.
    Because the District is pioneering this process at such a 
relatively high volume, this treatment facility can be considered a 
research and development demonstration project under Section 1605 of PL 
102-575. The Bureau of Reclamation is authorized to provide 50 percent 
cost-sharing for such demonstration projects. The District has already 
committed revenues for its share of project costs. The estimated total 
cost of the treatment facility is approximately $3.5 million. 
Therefore, we are requesting a federal appropriation of $1.75 million.
    Without this treatment facility, the District will have no other 
alternative but to import water from the Colorado River. Treated 
Colorado River water is not only significantly more expensive, but it 
cannot be relied upon as a dependable source of water as California is 
required to reduce consumption of Colorado River water in the very near 
future.
    We appreciate your consideration of this request. We respectfully 
ask that the Committee provide $1.75 million in the Bureau's budget for 
fiscal year 1998 for this important project.
                                 ______
                                 
  Prepared Statement of the Los Angeles County Drainage Area Alliance
    The Los Angeles County Drainage Area (LACDA) Alliance, a coalition 
of seven cities (Bellflower, Carson, Downey, Lakewood, Paramount, Pico 
Rivera, and South Gate) in the floodplain of the Los Angeles and Rio 
Hondo Rivers requests that the Committee provide $40 million to 
continue construction of the LACDA flood control project. The 
Administration's budget request is $11.7 million; however, the Corps of 
Engineers has capability to construct $40 million in flood control 
improvements.
    The project is critical to protect one of the most urbanized areas 
of the country. A 100-year storm event could result in damages of $2.25 
billion covering 82 square miles. Over 500,000 people live in the 
floodplain. Without restoration of the flood protection system, 
residents will pay an estimated $131 million annually in flood 
insurance premiums. An economic impact study conducted by the 
University of Southern California concluded that failure to construct 
the needed improvements could result in the loss of approximately 
120,000 jobs with a regional economic loss of more than $30 billion 
over a 10-year period.
    The LACDA project has been revised to reduce costs, with a current 
estimated cost of $240 million. This project could be completed in five 
years. However, recurring delays leave residents vulnerable to the 
threat of flooding, and the economic impact may exceed project costs in 
as few as two years.
    We appreciate the Committee's past support, and ask that your 
support continue with an appropriation of $40 million for construction 
in fiscal year 1998.
                                 ______
                                 
   Prepared Statement of Wendell H. Kido, Plant Manager, Sacramento 
                  Regional Wastewater Treatment Plant
    The Sacramento Regional County Sanitation District (District) is 
requesting $500,000 for the Sacramento County Reclamation Reuse study. 
This study was initiated in fiscal year 1997.
    Section 1604 of Public Law 102-575 authorized the Bureau of 
Reclamation to provide 50 percent of the cost of water reclamation 
feasibility studies. The District is prepared to provide the cost share 
to investigate the feasibility of reclaiming a greater share, if not 
all, of the effluent produced by the Sacramento Regional Wastewater 
Treatment Plant. This study is intended to identify specific users, 
their water demand and delivery requirements; plan for treatment and 
distribution facilities, identify financing alternatives, and consider 
legal and environmental compliance.
    The District, in cooperation with the Sacramento City-County Office 
of Metropolitan Water Planning, has already identified a potential 
market demand for reclaimed water. This reclaimed water could replace 
fresh water supplies that would otherwise be used for non-potable uses, 
such as landscape and crop irrigation, industrial use, wetlands 
management, and groundwater recharge. Recycling wastewater would 
provide a source of water that would reduce consumption of groundwater, 
which has been over pumped in Sacramento County since the 1930s.
    The District is designing a small facility to reclaim a portion of 
the wastewater treated at the regional treatment plant. However, 
additional analysis is needed to determine all potential uses for 
reclaimed water, identify feasible measures to deliver and store 
reclaimed water, and determine the benefits and impact of reclaimed 
water otherwise discharged into the Sacramento River. This study will 
focus on water reuse opportunities throughout the entire county.
    The Sanitation District appreciated your past support. We look 
forward to your continued support by providing $500,000 to the Bureau 
of Reclamation to conduct the feasibility study.
                                 ______
                                 
    Prepared Statement of the Cities of Arcadia and Sierra Madre, CA
    The Cities of Arcadia and Sierra Madre, California appreciate your 
continuing support for the Water System Seismic Reliability Study and 
request that the Subcommittee appropriate $525,000 in fiscal year 1998.
    The Water Resources Development Act of 1996 (Public Law 104-303) 
authorizes the Corps of Engineers to provide technical assistance for 
public infrastructure seismic reliability projects. Federal funds will 
be matched 25 percent by non-federal sources. These funds will be used 
to design improvements identified in the seismic reliability study 
which the Corps has conducted over the past two years.
    Improvements recommended by the special study include high capacity 
water supply wells and a transmission main facility along with metering 
structures and associated control equipment. A loop transmission main 
is recommended to deliver emergency backup water supplies. Also 
provided for is the rehabilitation of the two area replenishment basins 
and the development of policies and programs for enhancing emergency 
response. Such emergency response includes standby and temporary power 
and the design of the seismic protection components needed to maximize 
the ability of these water systems to function properly following a 
major seismic event.
    The study and technical assistance provided by the Corps of 
Engineers will significantly improve public safety and reduce damage 
costs in the event of an earthquake. Damage resulting from the 1994 
Northridge earthquake, which measured 6.7 on the Richter Scale, totaled 
more than $20 billion. The federal government paid billions of dollars 
for emergency response and restoration cost. Large quakes predicted for 
our region could cost thousands of lives and as much as $70 billion in 
property damage. Lives can be saved and damages reduced if steps are 
taken to improve public infrastructure and prepare for emergency 
response.
                                 ______
                                 

                     CALIFORNIA NAVIGATION PROJECTS

  Prepared Statement of Brian E. Foss, Port Director, Santa Cruz Port
    In 1986, the United States Congress and the Santa Cruz Port 
District signed a Memorandum of Agreement (joint-venture L.C.A.) on the 
acquisition of a sand bypass system for Santa Cruz Small Craft Harbor. 
This $2.7 million agreement, authorized under WRDA 1984, provided that, 
once in place, the system would be operated and maintained by the Port 
District.
    The bypass project has been extraordinarily successful. The harbor, 
once the scene of long closures and countless accidents because of 
shoals and breaking surf, is now 100 percent open to navigation all 
year round. The federal government no longer has to appropriate yearly 
O&M funds as it did from 1964 to 1986. The savings over the past ten 
years is estimated at $9+ million. The savings over the life of the 
project (2014) is estimated to be well in excess of $28 million in 1986 
dollars.
    The Port District is quite satisfied with the operational project 
and will carry out its responsibilities through 2014. However, an 
inequity exists in the original cost-share formula, which the Port 
District asks Congress to give redress.
    The original legislative act of 1958, H.D. 357, provided for a 64.9 
percent federal share and a 35.1 percent local share of the Santa Cruz 
Harbor jetty and basin construction, as well as a sand bypass system to 
be built subsequently. It also provided for a yearly contribution by 
the federal government of $35,000 for operation of the bypass system.
    The 1986 M.O.A. was formulated using the present value of the 
$35,000 yearly operating contribution through 2014. That amount was 
given to the Port District in a lump sum ($389,000). That amount is the 
subject of our request. It should have been adjusted for inflation over 
the period from 1958-2014.
    The 1997 Congressional Energy and Water Appropriation Bill (O&M 
General) directed the Corps of Engineers to study this issue and report 
back to Congress. The Corps' San Francisco District is currently 
conducting that study with completion in Spring 1997.
    The estimated value of the Port District's request is $1,071,000. 
This includes credit for operating funds already received ($389,000).
    In exchange for correcting this financial inequity the Port 
District would agree to extend its operational responsibility to year 
2024. The estimated O&M savings to the federal government over the 
period from 1986 to 2024 is estimated to exceed $38 million in 1986 
dollars.
    The Port District requests that $1,071,000 be appropriated 
contingent upon the findings of the Army Corps of Engineers' study.
                                 ______
                                 
 Prepared Statement of Mike Giari, Executive Director, Port of Redwood 
                                City, CA
    On behalf of the Port of Redwood City, California, I would like to 
request consideration of a line-item appropriation in the amount of 
$100,000 to fund a reconnaissance study to determine the Federal 
interests, costs, benefits and environmental impacts of deepening 
Redwood City Harbor. This testimony addresses the justification for 
this study.
    The San Francisco Bay Area maritime industry sustains 100,000 jobs 
and generates $5.4 billion every year. Over 1,000 of these jobs are 
linked to the continued viability of the Port of Redwood City. If the 
Port of Redwood City and other Bay Area ports are to continue their 
role in America's economy, Congress must continue to invest in 
improvement and maintenance of our nation's deep draft navigation 
system.
                               background
Location
    The Port of Redwood City is located 18 nautical miles South of San 
Francisco on the West side of the San Francisco Bay. It provides deep 
draft access to the mid-Peninsula and Santa Clara Valley metropolitan 
area, and is the only deep draft port in South San Francisco Bay 
handling cargo to and from oceangoing ships and barges.
History
    The California gold rush and resulting population boom in San 
Francisco gave birth to the lumbering industry in the Peninsula 
redwoods. Logs were shipped to San Francisco Bay points via rafts and 
lumber schooners, using Redwood Creek at high tide to reach what is now 
downtown Redwood City. The city was named for the redwood lumber 
industry which was the basis of the earliest commercial maritime 
activities. Later, following development of navigation improvements, 
the importation of marine shells for use by the cement manufacturing 
plant at the Port and the exportation of salt from local producers were 
the basis for significant increases in maritime commerce. Today, 
commodities moving through the Port include salt, petroleum products, 
cement, scrap metal, lumber, gypsum and bauxite.
    In 1996, Port tonnage was over 840,000 metric tons. Tonnage growth 
at the Port is expected to continue. Demand by the construction 
industry in the South Bay Area for lumber, cement and construction 
aggregate will remain strong. Trade with Pacific Rim nations is growing 
rapidly, and the demand for port facilities and navigation channels 
over the next decade is a challenge to be met by all West Coast ports, 
including the Port of Redwood City.
                            dredging history
    Due to the shallow nature of San Francisco Bay, maintenance 
dredging is necessary in order to ensure safe navigation of ocean-going 
ships. There is no reliable method of estimating siltation rates for a 
large estuary like San Francisco Bay. The Redwood City Navigation 
Channel is subject to tidal currents, wave action, rainfall runoff and 
even seismic activity, all of which can effect changes in the 
configuration of the Channel.
    In 1965, Congress authorized and appropriated funds for the 
dredging of the Redwood City Navigation Channel to a depth of 30 feet. 
Thereafter, until 1990, maintenance dredging was conducted by the Corps 
of Engineers every five years. Due to the extreme difficulty in 
maintaining the Port's authorized depth on a 5-year maintenance 
dredging cycle, the Port undertook to gain more frequent dredging. In 
1992 the Redwood City Navigation Channel was placed on a 3-year 
dredging cycle in order to keep up with increasing siltation. It was 
dredged in 1993 and most recently in 1996.
1996 Dredging Recap
    By Summer 1995, the Port was faced with a near-emergency situation. 
Heavy siltation had reduced Channel depth to less than 25 feet--5 feet 
below its federally authorized depth. As a result, Port of Redwood City 
tenants were forced to ``light load'' ships (depart less than fully 
loaded), or wait until high tide, in order to navigate the shallow 
areas of the Channel. The problem continued to worsen throughout the 
Summer. In July, we approached the Corps and requested that the 
scheduled maintenance dredging begin prior to the October 1 release of 
funds. After many weeks of discussions, the Corps of Engineers agreed 
to begin the necessary hydrographic surveys in mid-September--two weeks 
before the funding was to be released. Additionally, we requested 
permission to receive Advanced Maintenance Dredging (AMD), which would 
allow the Corps to dredge several feet over the authorized depth in 
certain problematic areas to help avoid similar problems in the future. 
Despite the somewhat early start, the actual dredging did not get 
underway until February. And although the AMD was beneficial, in less 
than a year certain areas have already silted in, reducing channel 
depth in those areas to 28 feet.
    In sum, despite the Corps' best efforts, Mother Nature continues to 
have the upper hand, reducing Channel depth and threatening the Port's 
commerce.
                     the need for a deeper channel
    In addition to the recurring siltation problem, the new, larger 
vessels which now call on the Port of Redwood City require more than 30 
feet of draft. Currently when these vessels call on the Port, they are 
forced to ``light load'' and ``top off'' at another port with a deeper 
draft. This practice significantly adds to the cost of calling on the 
Port of Redwood City, and cannot continue indefinitely. If the Port of 
Redwood City cannot offer adequate draft for the vessels which serve 
the Port, the vessels will eventually take their business elsewhere.
                      congressional authorization
    In order for the Corps of Engineers to determine the Federal 
interests, costs, benefits and environmental impacts of deepening 
Redwood City Harbor, Congresswoman Anna Eshoo has asked the Chairman of 
the House Transportation & Infrastructure Committee to authorize a 
reconnaissance study. We understand that this authorization will be 
signed by the Chairman within the next week or so. The study itself, 
authorized under Section 905(b) of the Water Resources Development Act 
of 1986, is expected to be completed within 6 months at a cost of no 
more than $100,000, as dictated by recently amended Corps 
administrative policy. This revised policy was approved by Congress in 
Section 203 of Conference Report 104-843.
                               conclusion
    In sum, the Port of Redwood City respectfully requests inclusion of 
$100,000 in the fiscal year 1998 Energy & Water Development 
Appropriations Bill to fund a reconnaissance study at Redwood City 
Harbor.
    Your strongest consideration of this request is greatly 
appreciated.
                                 ______
                                 
Prepared Statement of Stan Wisniewski, Director, County of Los Angeles 
         Department of Beaches and Harbors, Marina del Rey, CA
  fiscal year 1998 funding for marina del rey dredging and navigation 
                                 study
    Los Angeles County respectfully requests that the Congress of the 
United States include funds in fiscal year 1998 Energy and Water 
appropriations for the following projects, which are urgently required 
to preserve public safety in Marina del Rey.
Marina del Rey Entrance Channel Dredging--($1,700,000)
    The U.S. Army Corps of Engineers is responsible for maintenance 
dredging of the Marina del Rey's entrances and main channel, pursuant 
to a perpetual right of way and easement agreement with the County. The 
last design-depth dredging of Marina del Rey occurred in 1981, with 
217,000 cubic yards of material removed. Since then, 35,000 cubic yards 
were removed in 1987, 55,000 cubic yards were dredged in 1994, and 
230,000 cubic yards were removed in 1996.
    There are still over 500,000 cubic yards of sediment that need to 
be removed to return the entrances to a design depth of 20 feet. 
Shoaling in both entrances has left navigable channels that are only 
300 feet wide (50 percent of the entrance width), with a minimal depth 
for boating safety, of 10 feet.
    To avoid an emergency situation, which could be created by one 
severe storm, 200,000 cubic yards of clean sediments should be removed 
during fiscal year 1998. These sediments can be economically dredged 
and placed on nearby beaches for much needed sand renourishment. This 
project will provide time for continuing work on the long-term solution 
to the Marina's dredging problem.
    The President's fiscal year 1998 budget does not include any funds 
to perform maintenance dredging at Marina del Rey. We are, therefore, 
requesting your support for an appropriation of $1.7 million to remove 
the 200,000 cubic yards of sediments, which could threaten the ability 
of the U.S. Coast Guard, the County Sheriffs Harbor Patrol, the County 
Lifeguards and the City and County Fire Departments to respond to 
emergencies. As these agencies are the critical core of the LAX Air-Sea 
Disaster Response Team, it is imperative that the Marina's entrances 
remain open and safely navigable.
    Removing the clean sediments will provide a partial solution to the 
problem. It will not enable us to regain the design depth throughout 
the entrances and main channel, nor avoid future emergencies caused by 
shoaling, because 250,000 cubic yards of contaminated sediment will 
remain. To avoid the potential cost of upland disposal of the 250,000 
cubic yards of contaminated sediments, which could be $25 million, the 
County is working with the City of Long Beach, the Corps, the 
Environmental Protection Agency, and others, to gain approval for use 
of the City of Long Beach's borrow pits for contaminated sediment 
disposal.
Marina del Rey and Ballona Creek Feasibility Study--($530,000)
    Some of the sediments creating navigational hazards in Marina del 
Rey's entrances contain contaminants that make dredging and disposal 
difficult and costly. The U.S. Army Corps of Engineers completed a 
reconnaissance study in 1996, which established that there is a Federal 
interest in solving this problem. The feasibility phase of the study is 
about to begin, with the County agreeing to provide 50 percent of the 
necessary funding.
    The study's scope has been finalized and approved. It will focus on 
an economical and environmentally safe disposal option for the 
contaminated sediments, as well as on actions that can be taken in the 
Ballona Creek watershed that will eliminate or reduce the flow of 
contaminated sediments into Marina del Rey's entrance. Dedicated staff 
from the County, the Corps, the City of Los Angeles, the Santa Monica 
Bay Restoration Project, Heal the Bay, and other environmental and 
regulatory agencies have worked to limit the scope, time, and cost of 
this study. Based on the approved plant the study will require three 
years to complete, at a cost of $2.7 million. As the Los Angeles County 
Board of Supervisors has agreed to pay 50 percent of the study's costs, 
we are pleased that there are funds in the President's fiscal year 1998 
budget for this study. We, therefore, ask your support for the 
requested appropriation, of $530,000, for the Federal share of the cost 
in fiscal year 1998.
                                 ______
                                 
  Prepared Statement of Leland Wong, President, Los Angeles Board of 
            Harbor Commissioners for the Port of Los Angeles
    Mr. Chairman and Members of the Subcommittee: I am Leland Wong, 
President of the City of Los Angeles Board of Harbor Commissioners 
which oversees the activities of the Port of Los Angeles. My testimony, 
for the City of Los Angeles and its Board of Harbor Commissioners, 
speaks in support of the continuation of the federal role in the 
implementation of the major navigation improvements underway at San 
Pedro Bay, California. Specifically, I am speaking of the Pier 400 
Dredging and Landfill Project.
       pier 400 implementation under the 2020 development program
    The Commissioners, management and staff of the Port of Los Angeles 
have been working since 1985 with the U.S. Army Corps of Engineers on 
the implementation of the 2020 Development Plan for San Pedro Bay. The 
2020 Plan was authorized in Section 210(b) of the Water Resources 
Development Act (WRDA) of 1986 (Public Law 99-662), and further 
sanctioned by Section 104 of WRDA 1988 (Public Law 100-371) and Section 
102(c) of WRDA 1989 (Public Law 101-640).
    The 2020 Plan accurately predicted the phenomenal growth of trade 
through the San Pedro Bay ports of Los Angeles and Long Beach, and 
mapped out a development plan that could accommodate this growth well 
into the 21st century. Divided into phases, the implementation of the 
2020 Plan is currently entering Stage II which we call the Pier 400 
Dredging and Landfill Project, a federal deep-draft navigation project.
    The contracts for Stage I construction were awarded by the Port of 
Los Angeles in 1994 and construction remains on schedule with 
completion anticipated in June 1997. Stage I includes advance 
constructing the dredging of new federal navigation channels that will 
abut existing land at Pier 300, and reclaiming 265 acres of new land at 
Pier 400.
                         stage ii construction
    I am pleased to inform the subcommittee that on March 18 of this 
year, the Project Cooperation Agreement (PCA) between the City and the 
Port and the Corps of Engineers was executed in a ceremony in the 
office of Assistant Secretary for Civil Works, H. Martin Lancaster. 
Present, were Representatives Steve Horn and Jane Harman whose ongoing 
and active support for the Pier 400 Project have been invaluable. The 
execution of the PCA enabled the Corps' Los Angeles District, on the 
same day, to advertise the project for construction which is scheduled 
to begin in June of this year.
    We are also pleased to inform you that the Port of Los Angeles has 
entered an agreement with the appropriate State of California and 
federal agencies to fund the purchase of land and restoration of the 
Bolsa Chica Wetlands. This agreement secures for the Port the necessary 
mitigation to construct the Stage II project.
    Mr. Chairman, the Port of Los Angeles appreciates the appropriation 
of $10 million by Congress for fiscal year 1997. This money will enable 
the start of Stage II construction this summer. For fiscal year 1998, 
we request your subcommittee to appropriate $54 million which will 
allow the Corps' Los Angeles District to maintain schedules on 
construction of Stage II improvements in fiscal year 1998, thereby 
ensuring project completion no later than fiscal year 2000.
    The Corps of Engineers has estimated an additional cost of $30 
million should Stage II experience construction delays of even two 
years. The additional cost would provide no value to the project. 
Therefore, we feel it is imperative that adequate funds are allocated 
to the Pier 400 Project so that construction may remain on schedule and 
project costs to the Port of Los Angeles remain within current 
estimates. Just as importantly, our request is also based on a 
construction schedule that is directly linked to proposed agreements 
pledging the early use of Pier 400 facilities by new tenants in fiscal 
year 2000.
    The Port of Los Angeles' funding request for Stage II construction 
is in keeping with the PCA, establishing the federal interest pursuant 
to WRDA 1986 and Corps policy. The federal share has been established 
as $116 million out of an estimated project cost of $625 million. The 
PCA establishes $63.8 million as the federal share of Stage I. With 
Stage I nearing completion, the Port has now fully funded the federal 
share through debt financing. The PCA provides that the first $96 
million of Stage II work will be paid for by the federal government so 
that the Port can receive credit toward Stage II for the funds we 
advanced the federal government in Stage I. The Port's requested $54 
million appropriation for fiscal year 1997 is consistent with this 
provision of the PCA.
                economic impact of the pier 400 project
    As the Port of Los Angeles has testified in previous years, cargo 
throughput for San Pedro Bay is expected to triple between 1990 and the 
year 2020. Actual growth rates thus far, from 1990 through 1996, have 
significantly exceeded the forecast. The ability of the Port to meet 
the demands of this phenomenal growth in trade is dependent on deep 
water channels (such as those to be constructed under the Pier 400 
Project) that can accommodate the largest state-of-the-art deep-draft 
vessels in the new world fleet. These new vessels provide greater 
efficiency in cargo transportation and offer consumers lower costs 
imports and more competitive exports.
    The deep-water channels under the Pier 400 Project translate into 
significant national economic benefits, including:
  --Over $74 billion annually in trade that supports employment for 
        over one million people across the United States;
  --The generation of $84.8 billion in Port-related activities in 
        industry sales; $24.3 billion in wages and salaries; and, $12 
        billion in tax revenues annually;
  --The generation of $1.8 billion in U.S. Customs revenues in 1996 
        alone.
    The return on the federal investment is real, and will greatly 
exceed the cost/benefit ratio as determined by the Corps in the project 
feasibility study. In addition, the federal investment will ensure that 
one of the nation's largest ports remains competitive into the 21st 
Century.
         ongoing maintenance of federal channels and breakwater
    Related to the efficient operation of the completed Pier 400 
Project is the required ongoing maintenance of the existing federal 
navigation channels at the Port of Los Angeles. As such, the Port 
requests your subcommittee to include an appropriation of $200,000 to 
assist the Corps of Engineers in conducting a condition survey of the 
federal channels and breakwater in San Pedro Bay. This work is 
necessary to evaluate the future maintenance needs of the channels and 
any rehabilitation that may be required for the breakwater. Ongoing 
maintenance will ensure that the channels remain at depths in which 
fully loaded container and tanker ships can safely navigate, as well as 
guarantee the stability of the breakwater during severe weather.
                        vicksburg models funding
    Further, the Port of Los Angeles respectfully requests the 
subcommittee to provide $165,000 in fiscal year 1998 for ongoing 
maintenance of the San Pedro Bay models at the Corps of Engineers' 
Waterways Experiment Station (WES) in Vicksburg, Mississippi. In 
addition, $340,000 is needed for continued wave data collection which 
is necessary to validate the numerical and physical models used for 
project design. During the state-of-the-art design effort for the Pier 
300 channels and the Pier 400 land reclamation, eight separate, but 
related models, were developed and maintained by the scientists and 
engineers of WES and were likewise used by the engineers at the Port of 
Los Angeles and the Los Angeles District Corps. Maintenance of the 
Vicksburg hydraulic and physical models and their prototype data 
acquisition facilities remain an essential resource for the Corps' Los 
Angeles District and the Port.
                                summary
    Mr. Chairman, the Port of Los Angeles respectfully urges your 
subcommittee to include in the Corps of Engineers' fiscal year 1998 
budget appropriation:
  --$54 million for Stage II of the Pier 400 Dredging and Landfill 
        Project;
  --$200,000 to conduct condition surveys of the federal channels and 
        breakwater in San Pedro Bay;
  --$165,000 for ongoing maintenance of the Vicksburg Models; and,
  --$340,000 for continued wave data collection.
    The Port of Los Angeles has long valued the understanding 
demonstrated by your subcommittee of the importance of the port 
industry to the economic vitality of the United States. This 
understanding has been evidenced by the appropriation of scarce federal 
dollars for harbor and navigation projects such as ours.
    Thank you, Mr. Chairman, for the opportunity to submit this 
testimony in support of continued funding for the federal navigation 
activities at the Port of Los Angeles.
                                 ______
                                 
  Prepared Statement of the Contra Costa County Board of Supervisors, 
                        Contra Costa County, CA
          san francisco bar channel--southampton shoal channel
    The San Francisco Bay Bar Channel is located approximately 3 miles 
west of the City of San Francisco. The Southampton Shoal Channel is 
located approximately 6 miles north of San Francisco between Angel 
Island and Richmond Harbor. They provide deep draft merchant, military, 
commercial fishing and other vessel access to ports within the region. 
The 1995 bar tonnage was approximately 73,643,000. The 1995 Southampton 
Shoal Channel tonnage was 20,839,000. Both foreign and domestic ships 
traverse the Bar Channel and Southampton Shoal channel. Changing deep 
draft vessel operations and designs requires examining deepening the 
55-foot Bar Channel and 45-foot Southampton Shoal channel. Deepening 
the Bar and Southampton Shoal Channel will allow safer and more 
efficient navigation of oil tankers entering the bay to be loaded more 
fully, which will require fewer vessel trips to deliver the same amount 
of cargo. Deepening of the Southampton Shoal Channel and Extension will 
allow heavily laden vessels to proceed directly to off loading 
facilities, rather than lightering (off loading ) onto smaller ships in 
south San Francisco Bay. The priority is for deepening of the 
Southampton Shoal Channel to occur first, as the greatest benefit 
occurs as a result of this deepening. Language incorporating 
Southampton Shoal Channel with the San Francisco Bar study area was 
introduced into the 1997 House Report by Congressman Fazio and 
subsequently approved with the concurrence of chairman Myers.
Funding Request
    Funding of $600,000 is currently contained in the President's 
fiscal year 1998 budget. Contra Costa County, the Project's Local 
Sponsor, supports this budget allocation, and recommends it's inclusion 
in the final Budget.
Purpose of Fiscal Year 1998 Funding
    The purpose of fiscal year 1998 funding would be to initiate the 
Feasibility Study. Feasibility activities include sediment testing, 
navigation simulation, cultural resources analysis, Study and Project 
Management, Environmental and Economic studies, Geotechnical analysis 
of the channel, Real Estate, Plan Formulation Activities, Surveying and 
Mapping, Design and Cost Estimates. In fiscal year 1997, a $100,000 
allocation was made for a Reconnaissance Study that is currently 
underway.
Request for Name Change
    At this time, the priority for deepening is the Southampton Shoal 
Channel and Extension. For this reason, the County respectfully 
requests that the study area and funding request be limited to the 
Southampton Shoal and extension, and that the project now entitled the 
San Francisco Bay Bar Channel Southampton be changed to Southampton 
Shoal Channel and Extension.
       san francisco to stockton (baldwin) ship channel phase iii
Background
    As the primary navigation channel for most of the oil tanker 
traffic in San Francisco Bay, JFB provides a vital part of the economic 
infrastructure in the San Francisco Bay Area. The channel extends from 
the West Richmond channel through San Pablo Bay and Carquinez Strait 
and into Suisun Bay. At a current depth of -35 feet, the channel 
provides only minimum navigable depth for a world tanker fleet which 
boasts drafts up to 70 feet in its largest ships. With the San 
Francisco Bar Channel, the entrance to San Francisco Bay, at a depth of 
-55 feet, tanker traffic entering the Bay is already limited to a 
maximum of -50 feet because of underkeel clearance requirements. The 
tankers entering the Bay are anchored south of the Bay Bridge and 
partially off-loaded (lightered) into smaller ships until favorable 
tides or reduced draft allow them to proceed to the shallower channel 
and upstream berths. This in-bay transfer process is costly and is an 
increased environmental risk when compared to entering the Bay and 
proceeding directly to a berth for off loading as in the proposed 
project.
    There are three alternatives being considered for reducing 
environmental risk and increasing economic benefit to the process of 
moving petroleum in the Bay. The first alternative is deepening the 
existing 35 foot channel to 45 feet from the central bay up into Suisun 
Bay. The second alternative is the construction of a pipeline terminal 
near Point Molate north of the Richmond/San Rafael bridge and 
connecting to an existing common carrier utility pipeline that connects 
to the refineries. The third alternative is a combination of the first 
two involving construction of the pipeline terminal and dredging the 
deep draft channel to a depth of -40 feet.
Funding Request
    Funding of $250,000 is requested to be added to the fiscal year 
1998 Budget due to a recently accelerated schedule. Funding would be 
utilized to complete environmental review for the project, and for 
continuation of preconstruction engineering and design.
                                 ______
                                 
 Prepared Statement of E.D. Allen, Chief Harbor Engineer, Port of Long 
                               Beach, CA
    I am E. D. Allen, Chief Harbor Engineer for the Port of Long Beach, 
California. I have been authorized by the Board of Harbor Commissioners 
of the City of Long Beach to represent the Port of Long Beach in regard 
to appropriations for the Los Angeles and Long Beach Harbors Model 
Study; Planning, Engineering, and Design for our on-going 2020 Plan; 
Los Angeles River maintenance dredging; and Reconnaissance and 
Feasibility Studies for beach erosion.
      harbors model maintenance (civil works budget category--o&m)
    The Water Resources Development Act of 1976, Section 123, 
authorized the Chief of Engineers to operate and maintain the Los 
Angeles-Long Beach Harbor Hydraulic Model at the U.S. Army Corps of 
Engineers Waterways Experiment Station in Vicksburg, Mississippi as 
part of the Los Angeles and Long Beach Harbors Model Study. This model. 
encompasses both port complexes in San Pedro Bay, which, as you are 
aware, are ports of national significance. The hydraulic model, along 
with several numeric models, provides state-of-the-art methodology that 
can be used on the San Pedro Bay ports and on many other harbor 
complexes. In addition, the Port, as the local agency, is assisting in 
the Corps' effort to provide continuous wave-gauge data by providing 
necessary support personnel and equipment for the maintenance of 
portions of the system located at the Port.
    In fiscal year 1997, $162,000 was appropriated for maintenance of 
the physical model of San Pedro Bay. During this time, the Port also 
utilized the model to analyze necessary navigation-related 
modifications to the recently completed portion of our expansion plan, 
as well as our upcoming expansion within the Navy Basin. This effort is 
being funded by the Port and is currently on-going. It is necessary 
that the model remain ready for service such as this. Funding in fiscal 
year 1998, in the amount of $165,000, would continue annual maintenance 
on the model. Additionally, we are requesting $325,000 of continued 
funding for the wave gage (prototype) data acquisition and analysis 
program. This program began in 1987 to develop data for the design of 
the 2020 Plan port expansion and navigation improvements. This program 
has now evolved to construction monitoring and model verification which 
needs to continue in order to confirm expected levels of impacts of the 
expansion plans. Therefore, Congress is respectfully requested to 
appropriate $490,000 for fiscal year 1998 to perform this work.
  2020 plan--channel dredging (civil works budget category--ped plus 
                             construction)
    The Port of Long Beach has developed a long-range master plan, 
referred to as the 2020 Plan, which demonstrates the need for new 
navigation channels and additional landfill development through the 
year 2020. In fiscal year 1996 $194,000 was appropriated to continue 
preconstruction engineering and design of the federal share of the 
project which will provide for channel deepening outside the federal 
breakwater.
    Section 201(b) of the Water Resources Development Act of 1986 
authorized construction of the 2020 Plan upon recommendations of a 
feasibility report and completion of a favorable Chief of Engineers 
Report. The Chief's Report was issued July 26, 1996 and the Office of 
Management of Budget recently approved the Report.
    The Port of Long Beach has started the first phase of the 2020 Plan 
with the construction of its Pier J expansion project, which includes 
dredging the Long Beach Main Channel to at least a -76 foot depth. This 
project is known as the Port of Long Beach Deepening. Together with the 
approach channel deepening outside the federal breakwater, the dredging 
was evaluated for Federal interest in the feasibility study because it 
permits deeper draft crude petroleum vessels to call at the Port of 
Long Beach. The recently completed studies indicate the Federal share 
of the channel deepening to be $15,510,000. We have proceeded with our 
work and now are requesting the Federal share to be appropriated.
    Completion of the Preconstruction, Engineering, and Design (PED) is 
scheduled for fiscal year 1998 with an appropriation of $160,000. It is 
urged that the Committee approve an appropriation of $14,500,000 to 
fund through the construction phase of the Long Beach Deepening 
Project, which will make good on the Federal cost share. This will 
allow construction to begin in 1998 and allow the benefits from the 
project to begin.
 los angeles river maintenance dredging (civil works budget category--
                                  o&m)
    The Port of Long Beach also concurs with and supports the 
recommendation of C-MANC and the City of Long Beach with respect to 
federal funding for remedial maintenance dredging to remove accumulated 
flood-deposited silt in the mouth of the Los Angeles River. During the 
storms of 1995, such flood-deposited silt closed the mouth of the Los 
Angeles River to navigation. This restricted regularly scheduled water 
route transportation between the cities of Long Beach and Avalon, 
creating an economic emergency. Reacting to this emergency, the U. S. 
Army Corps of Engineers cleared the channel enough to allow for minimal 
resumption of navigation.
    However, substantial quantities of silt remain in the channel, much 
of which is just upstream of the recently reopened section. These silt 
deposits create the likelihood of future serious restrictions and 
safety hazards to commercial and recreational boating activity in, and 
adjacent to, the Long Beach Harbor District and the associated 
businesses in Long Beach. Such restrictions and hazards have resulted 
in accidents and litigation.
    In addition, the Port supports the City in recommending that these 
silt deposits be removed on an annual basis as a scheduled work item. 
As previously demonstrated, the location of the silt can move 
dramatically within a few days. In the draft of ``Project Plan for Los 
Angeles River Estuary Maintenance Dredging, Long Beach, CA, October 
1994'' (Draft Project Plan-1994), the Corps of Engineers estimated an 
average annual deposit of silt in the estuary of 485,000 cubic yards. 
The rate of such deposits is influenced by operational decisions at the 
Corps of Engineers' dams located at the headwaters of the river. It is 
imperative for our current operations, that a long range remedy be 
found for the Los Angeles River mouth, if navigational utility and 
effective flood control capability is to be maintained.
    Although the Draft Project Plan-1994 cites a memorandum indicating 
sufficient capacity to effectively accommodate flood waters when 
released from Sepulveda and Hansen Dams, we are concerned as to how 
that capacity is maintained over time, given the annual level of silt 
deposition. The flood flow is also accompanied by a velocity and volume 
of the river, through the portions of the river historically dredged by 
the Crops, that has caused the loss of, or damage to, navigational 
buoys, marina mooring facilities, dredging equipment, and the waterway 
usage by various commercial and recreational vessels. The most recent 
deposits, despite the emergency channel clearance, have resulted in 
extensive shoaling that still hinders navigational utility in the area.
    It is estimated by the Corps of Engineers, in Draft Project Plan-
1994, that maintenance dredging of the channel to a minimum usable 
width, a project that does not clear all shoaling that hinders 
navigation, is $1,900,000. This is a level of dredging that allows for 
an annual accumulation of almost 175,000 cubic yards of silt deposits 
beyond what is being dredged and allows for the uncertainty of a 
rapidly developing shoal in any time of significant storms. An annual 
expenditure of $5,700,000 would be necessary to clear all annual silt 
deposits and prevent an accumulation of that material. Congress is 
requested, therefore, to appropriate $5,700,000 for the accomplishment 
of this critically needed work. This work is included in the line item 
known as Los Angeles Long Beach Harbors in the Civil Works Budget.
  reconnaissance/feasibility study--beach erosion (civil works budget 
                           category--surveys)
    The Port of Long Beach also supports C-MANC and the City of Long 
Beach on their request for federal funding to complete a Corps of 
Engineers reconnaissance study on beach erosion. In southeastern Long 
Beach, east of the Port's land and channels, and directly opposite the 
federal breakwater, a beach and seawall protects approximately 
$200,000,000 worth of homes. Steady erosion had reduced the beach from 
an optimum of 175 feet to 30 feet prior to City's efforts in late 1994 
to rebuild the beach. Winter storms continue to reduce the beach width.
    The City has also experienced erosion in the west beach area. 
Although homes are not endangered, public improvements, including 
lifeguard stations, public restrooms, a bicycle and pedestrian trail, 
and a parking lot, are at risk. The cause of the new problem is 
unclear, indicating the need for a thorough study of the beach erosion 
problem inside the federal breakwater.
    The primary method of protecting the homes has been annual 
rebuilding, with the building of sand berms during high tides or 
expected storms. In the past 16 years, the City has invested over 
$5,300,000 in capital improvement projects, annual beach rebuilding, 
and storm protection to control the beach erosion. Despite this effort, 
in 1989 and 1993, storm waves eroded the beach and breached the 
protective seawall, causing damage to homes. In fiscal year 1997, 
$275,000 was budgeted by the City to rebuild eroded beaches. The City 
is also defending itself against a lawsuit by one of the homeowners who 
is claiming that the City failed to halt erosion that narrowed the 
beaches in front of his home to less than the desired width adopted in 
the 1980 Local Coastal Plan.
    In fiscal year 1997, $252,000 was appropriated to complete the 
reconnaissance study of the beach erosion problem within the City of 
Long Beach. It is now requested that Congress appropriate $500,000 in 
fiscal year 1998 to initiate the feasibility study.
    This beach erosion problem is directly related to the focusing 
affect the federal breakwater has on our large commercial harbor 
complex and surrounding beaches.
    Attached hereto is Resolution HD-1854, adopted by the Board of 
Harbor Commissioners of the City of Long Beach on March 10, 1997, which 
contains data relating to the background of the Los Angeles and Long 
Beach Harbors Model Study, the 2020 Plan implementation, the Los 
Angeles River dredging, the beach erosion problem in Long Beach, and 
other related navigation and economic matters. The resolution stresses 
the need for federal assistance in developing economic, technical and 
environmental background information essential to the design and 
permitting of Port facilities vital to regional and national interests. 
The Port of Long Beach is the largest container port in the United 
States and is the economic engine bringing $3.8 billion in customs 
receipts from both Los Angeles and Long Beach ports and jobs for 
500,000 people. We are truly a port and harbor of national 
significance.
    We kindly ask that Congress continue its support of these projects 
in fiscal year 1998 by appropriating the requested funds.
    Thank you for permitting me the privilege of this presentation.
                         resolution no. hd-1854
    A Resolution of the Board of Harbor Commissioners of the City of 
Long Beach, California, requesting the Congress of the United States to 
appropriate funds to the United States Army Corps of Engineers in order 
to continue planning; engineering and design for the San Pedro Bay 2020 
Plan; to continue the Los Angeles and Long Beach Harbors Model Study 
relating to improvements in San Pedro Bay; to conduct maintenance 
dredging at the mouth of the Los Angeles River; and to conduct 
reconnaissance and feasibility studies of beach erosion.
    WHEREAS, the Ports of Long Beach and Los Angeles in San Pedro Bay, 
California, are two of a limited number of sites on the West Coast of 
the United States which possess the potential for deep water port 
facilities as recommended in the West Coast Deep Water Port Facility 
Study conducted by the United States Army Corps of Engineers; and
    WHEREAS, the Ports of Long Beach and Los Angeles have a record of 
both physical and fiscal growth to the extent that together the two 
ports are presently handling over 164.4 million metric revenue tons of 
cargo annually (fiscal year 1996), and the international cargo handled 
is valued at over 157 billion dollars annually (calendar year 1995); 
and
    WHEREAS, the growth and activity of the Ports of Long Beach and Los 
Angeles have a significant regional and national economic effect; and
    WHEREAS, in excess of 3.8 billion dollars in federal revenues were 
collected as United States Customs duties on foreign imports passing 
through the Ports of Long Beach and Los Angeles during the fiscal year 
ending September 30, 1995; and
    WHEREAS, both Ports are now, and are increasingly becoming, hard-
pressed to provide facilities to meet the needs of the shipping 
industry, and to that end are conducting extensive studies, in 
conjunction with federal studies, to determine navigational, 
transportation, and environmental requirements necessary to provide 
economic and adequate surge-free berthing and cargo handling 
facilities; and
    WHEREAS, all existing land in the Port of Long Beach which can be 
developed for shipping operations has been utilized or is in the 
process of being developed and, in order to meet the needs of the 
following decade, the design, permitting and construction of new lands 
must continue; and
    WHEREAS, continuation of the studies currently underway by the 
United States Army Corps of Engineers, consisting of the Los Angeles 
and Long Beach Harbors Model Study, including maintenance and operation 
of the San Pedro Bay Hydraulic Model at Vicksburg, Mississippi, as 
authorized by Section 123 of the Water Resources Development Act of 
1976, is needed for use in the design and permitting processes for 
future landfills for port development; and
    WHEREAS, the Port of Long Beach handled over 28 million metric tons 
of liquid bulk cargo (fiscal year 1996). Because of economies of scale, 
liquid bulk cargo brought in by deeper draft vessels will have lower 
transportation costs. However, the existing navigation channel depths 
leading to the Port limit the size of calling vessels; and
    WHEREAS, One Million Five Hundred Thousand Dollars ($1,500,000) was 
appropriated in fiscal year 1995 for a feasibility study of channel 
deepening outside the federal breakwater. The feasibility study was 
completed in 1995 and draft plans and specifications were completed in 
December, 1996; and
    WHEREAS, the Los Angeles River is the largest of numerous flood-
control channels constructed and maintained jointly by the Los Angeles 
County Flood Control District and the United States Army Corps of 
Engineers, and silt deposit from heavy storm runoff in recent years 
accumulating in the mouth of the Los Angeles River in the City of Long 
Beach constitutes a restriction and hazard to both commercial and 
recreational boating; and
    WHEREAS, the Board of Harbor Commissioners of the City of Long 
Beach, as a properly constituted and financially responsible local 
agency, by its Resolution No. HD-890, adopted August 3, 1965, expressed 
its intent to enter into such agreements as may be reasonably required 
to further federal projects for the development and improvement of Long 
Beach and Los Angeles Harbors; and
    WHEREAS, at southeastern Long Beach in front of Alamitos Bay a 
beach and seawall protects Two Hundred Million Dollars ($200,000,000) 
worth of homes. The primary method of protecting the homes has been 
annual beach rebuilding and sand berms during storms. Steady erosion 
has reduced the beach from optimum width of 175 feet to 30 feet and 
continues to reduce beach width despite rebuilding efforts in 1994. In 
the past 14 years, the City has invested over Five Million Three 
Hundred Thousand Dollars ($5,300,000) in capital improvement projects, 
annual beach rebuilding and storm protection to stop erosion. Despite 
this effort, in 1989 and 1993, storm waves eroded the beach and 
breached the protective seawall causing damage to homes.
    NOW, THEREFORE, the Board of Harbor Commissioners of the City of 
Long Beach resolves as follows:
    Section 1. That the Congress of the United States be, and is 
hereby, respectfully requested to appropriate simultaneously the funds 
necessary for the Chief of Engineers, United States Army Corps of 
Engineers, to maintain the San Pedro Bay Hydraulic Model at the 
Waterways Experiment Station at Vicksburg, Mississippi, as part of the 
Los Angeles and Long Beach Harbors Model Study.
    Sec. 2. That the Congress of the United States be, and is hereby, 
respectfully requested to appropriate simultaneously the funds 
necessary for the Chief of Engineers, United States Army Corps of 
Engineers, to continue the existing wave gauge (prototype) data 
acquisition and analysis program.
    Sec. 3. That the Congress of the United States be, and is hereby, 
respectfully requested to appropriate simultaneously the funds 
necessary for the Chief of Engineers, United States Army Corps of 
Engineers, to complete the construction phase of dredging deeper 
navigation channels to the Port of Long Beach.
    Sec. 4. That the Congress of the United States be, and is hereby, 
respectfully requested to appropriate simultaneously the funds 
necessary for the Chief of Engineers, United States Army Corps of 
Engineers, in conjunction with the Los Angeles County Flood Control 
District, to engage in the necessary maintenance dredging at the mouth 
of the Los Angeles River to remove silt deposits which have accumulated 
at that location.
    Sec. 5. That the Congress of the United States be, and is hereby, 
respectfully requested to appropriate simultaneously the funds 
necessary for the Chief of Engineers, United States Army Corps of 
Engineers, to complete reconnaissance and feasibility studies to 
develop protective measures to prevent beach erosion within the City of 
Long Beach.
    Sec. 6. That the Executive Director of the Long Beach Harbor 
Department be, and he is hereby, directed to send copies of this 
resolution to the United States Senators and to Members of the House of 
Representatives from California, with a letter requesting their 
assistance in presenting this resolution before the proper 
Congressional committees.
    Sec. 7. That the Executive Director of the Long Beach Harbor 
Department be, and he is hereby, further directed to send copies of 
this resolution to the President of the United States; the Director, 
Office of Management and Budget; the Secretary of the Army; the Chief 
of Engineers, the Director, Directorate of Civil Works, the Division 
Engineer-South Pacific Division and the District Engineer-Los Angeles, 
all of the United States Army Corps of Engineers; and to such other 
interested persons as he may deem appropriate.
    The Secretary of the Board shall certify to the passage of this 
resolution by the Board of Harbor Commissioners of the City of Long 
Beach, shall cause the same to be posted in three (3) conspicuous 
places in the City of Long Beach, and shall cause a certified copy of 
this resolution to be filed forthwith with the City Clerk of the City 
of Long Beach and it shall thereupon take effect.
    I hereby certify that the foregoing resolution was adopted by the 
Board of Harbor Commissioners of the City of Long Beach at its meeting 
of March 10 , 1997, by the following vote:
    Ayes: Commissioners--Kashiwabara, Hearrean and Hancock, Perez
    Noes: Commissioners--None
    Absent: Commissioners--Murchison
    Not Voting: Commissioners--None
                                              John W. Hand,
                                                         Secretary.
                                 ______
                                 
     Prepared Statement of David Allen, President, Board of Harbor 
                             Commissioners
    The Army Corps of Engineers has identified and completed a study at 
a cost of $600,000 for a project to take place in the inner harbor at 
Crescent City, California. This project is vital to the commercial 
fishing industry and to support industries within the port. Crescent 
City is the county seat of Del Norte County. The area currently has a 
11.6 unemployment rate and the county is rated last of all California 
counties in per capita income. Commercial fishing is the second largest 
source of employment in the county, and the project is vital to 
maintain a healthy industry.
    The President's 1998 budget did not include funding for this 
project, however it did include funding for an ongoing Operations and 
Maintenance project in the outer basin of Crescent Bay. Ms. Maxine 
Jacoby of the USACE is the director for the new proposed project. She 
stated to me that if the new project could be funded and work done on 
it to coincide with the O and M project there would be an approximate 
savings of $250,000 dollars for the Corps, most of it in mobilization. 
The coincided projects would be a direct savings to taxpayers.
    We respectfully ask that the new project be funded, and work on it 
to coincide with the O and M project scheduled for 1998. The O and M 
project also requested funds ($300,000) for a study to identify an 
offshore disposal site. This is needed for both projects to continue in 
the future. Thank you very much for your consideration.
                                 ______
                                 
   Prepared Statement of Alexander Krygsman, Port Director, Port of 
                              Stockton, CA
    I am Alexander Krygsman, Director of the Port of Stockton in 
Stockton, California.
    The San Francisco Bay to Stockton Ship Channels Project is an 
authorized project, presently under construction.
    The Port of Stockton is primarily a bulk port that serves industry 
and agriculture in the San Joaquin Valley in California, and the bulk 
imports and exports of the Western States, including the coal areas of 
these States.
    The Port of Stockton recognized as far back as 1952 that deeper 
channels would be needed for the movements of bulk cargoes and 
requested the Corps of Engineers to deepen the channel in 1952. Coal, 
grain, fertilizers and many other bulk materials require deeper 
channels to serve the larger bulk carriers.
    The Nation needs ports that can handle larger, more economical and 
more fuel-efficient vessels close to the production areas, both 
agricultural and industrial, to conserve energy.
    The Port of Stockton is such a port.
    The dredging of the Stockton Channel portion of the project was 
completed in 1987. A copy of the Port of Stockton's most recent annual 
report is attached. Cargo volume has increased since the dredging of 
the Stockton Channel was completed; and the project is certainly paying 
off.
    Therefore, we have requested the Corps of Engineers for a potential 
new navigation study (reconnaissance study) to deepen the Channel 
further, to forty (40) feet or more, if economically feasible.
    For the 1998 fiscal year, we are requesting three-hundred-thousand 
dollars ($300,000) for this study. Because this study has to be 
coordinated for proper timing with the continuing construction of the 
John F. Baldwin Channel, or the U.S. Navy's project to deepen the 
Channels to the Concord Weapons Station, and with the progress of these 
projects, now is the time to do this study.
    This is not just a new study. This study, and the eventual 
construction, is closely tied to the deepening of the Channel through 
San Pablo Bay, and this project needs to be timed appropriately with 
that construction. Deferring three-hundred-thousand dollars ($300,000) 
now could cost millions in extra cost later.
    We urge you to appropriate three-hundred-thousand dollars 
($300,000) for the Stockton Deep Water Channel Reconnaissance Report. 
We also strongly urge that two-million-five-hundred-thousand dollars 
($2,500,000) be appropriated to maintain the Channels so that the 
benefits may continue to accrue.
                                 ______
                                 
  Prepared Statement of Richard W. Parsons, Dredging Program Manager, 
                         Ventura Port District
    The Ventura Port District respectfully requests that the Congress:
  --Include $7,000,000.00 in the fiscal year 1998 Energy and Water 
        Development Appropriations Bill for the U. S. Army Corps of 
        Engineer's maintenance dredging of the Ventura Harbor's federal 
        entrance channel, and for the repair of the federal breakwater 
        and jetties. The Corps of Engineers area of responsibility is 
        illustrated in the attached photograph.
  --Include $150,000.00 in the fiscal year 1998 Energy and Water 
        Development Appropriations Bill to complete a reconnaissance 
        study to determine the advisability of modifying the existing 
        Federal navigation project at Ventura Harbor to include a sand 
        by-pass system. This study was authorized by the House 
        Committee on Transportation and Infrastructure on September 14, 
        1995, and was initiated during fiscal year 1997.
                               background
    Ventura Harbor is located along the Southern California coastline 
in the City of San Buenaventura, approximately 60 miles northwest of 
the City of Los Angeles. The harbor opened in 1963. Annual dredging of 
the harbor entrance area is usually necessary in order to assure a 
navigationally adequate channel. In 1968, the 90th Congress made the 
harbor a Federal project and committed the U. S. Army Corps of 
Engineers to provide for the maintenance of the entrance structures and 
the dredging of the entrance channel and sand traps.
    The harbor presently generates more than $40 million in gross 
receipts annually. That, of course, translates into thousands of both 
direct and indirect jobs. A significant portion of those jobs are 
associated with the commercial fishing industry (over 30 million pounds 
of fish products were landed in 1996), and with vessels serving the 
offshore oil industry. Additionally, the headquarters for the Channel 
Islands National Park is located within the harbor, and the only 
commercial vessels transporting the nearly 100,000 visitors per year to 
and from the Park islands offshore, operate out of the harbor. All of 
the operations of the harbor, particularly those related to commercial 
fishing, the support boats for the oil industry, and the visitor 
transport vessels for the Channel Islands National Park are highly 
dependent upon a navigationally adequate entrance to the harbor.
                     operations & maintenance needs
    It is estimated that $7,000,000.00 will be required during fiscal 
year 1998 to address the following operations and maintenance needs at 
Ventura Harbor:
    Dredging Needs.--$3,800,000.00 will be required during fiscal year 
1998 to perform the routine maintenance dredging of the harbor's 
federal entrance channel and sand traps. This dredging work is 
absolutely essential to the continued operation of the harbor.
    Breakwater Repairs.--$700,000.00 will be required during fiscal 
year 1998 to complete the armor stone repairs on the offshore 
breakwater. This structure suffered heavy damage in the 20 ft. seas of 
January 1995. While emergency repairs to the most heavily damaged areas 
of the structure were completed in March of that year, the repair 
effort has not been completed. Thus, this critical structure remains in 
a vulnerable condition.
    South Jetty Repairs.--$1,300,000.00 will be required during fiscal 
year 1998 to repair the deteriorated 35 year old concrete tribars that 
armor the South Jetty. The tribars are simply failing after years of 
pounding by the seas. New tribars employing the latest design 
techniques must be fabricated and placed to put the South Jetty in 
sound condition.
    North Jetty Repairs.--$1,200,000.00 will be required during fiscal 
year 1998 to reverse the accelerating rate of deterioration being 
experienced on the 35 year old North Jetty. The deterioration was 
aggravated by the 1994 Northridge Earthquake which displaced large 
portions of the armor stone. In order to prevent any compromise of the 
structural function of this jetty, it is necessary that the repair 
efforts commence in fiscal year 1998.
                              study needs
    It is estimated that $150,000.00 will be required during fiscal 
year 1998 in order to complete the reconnaissance study for a possible 
sand by-pass system at Ventura Harbor. Given the continuing need for 
maintenance dredging, it is appropriate to determine if there is a 
federal interest in a sand by-pass system or other measures which can 
accomplish the maintenance of the Harbor in a manner that is more 
efficient and cost effective than the current contract dredging 
approach.
                                 ______
                                 
Prepared Statement of Hon. Rosemary Corbin, Mayor, City of Richmond, CA
    Mr. Chairman and members of the Subcommittee, thank you for the 
opportunity for me, Rosemary Corbin, as Mayor of the City of Richmond, 
on behalf of myself and the other members of the City Council, to 
submit prepared remarks to you for the record in support of the fiscal 
year 1998 Energy and Water Appropriations Measure.
    The City of Richmond is the local sponsor under the Project 
Cooperation Agreement (``PCA'') executed just this month for 
construction of the 38 foot deep draft project for navigation, Richmond 
Harbor, California, authorized under the Water Resources Development 
Act of 1986 (``WRDA 1986'') (Public Law 99-662).
    The City Council recognizes and expresses their profound gratitude 
to our Senators, Barbara Boxer, a Member of this Committee, and Dianne 
Feinstein, a former Member of this Committee, for their longstanding 
support in difficult budgetary times in funding this navigation project 
of critical importance to the future development of the City and Port 
of Richmond.
    The City of Richmond is especially pleased that fiscal year 1997 
marks the commencement of construction of the navigation project. We 
have executed the PCA. We anticipate bid advertisement in April, 
contract award in May-June, and construction to begin shortly 
thereafter.
    We successfully raised over 8 million dollars to be applied to the 
required local share of project construction cost through the 
establishment of the Richmond Harbor Navigation Improvement District-
the first Navigation Benefit Assessment District in the United States. 
This has resulted in a separate partnership evidenced in supplemental 
agreements between the city and local private beneficiaries who are 
paying a substantial portion of the local contribution to project 
construction cost. In addition, the city and the private beneficiaries 
anticipate participating through the federal construction contract in 
dredging our public and private berths to project depth at our expense.
    In addition to pioneering work in the public financing of our 
navigation project and the forging of a public-private partnership at 
the local level in project planning and financing, along the way we 
have overcome many other obstacles to project construction including:
  --Project delay and the need for public consensus building resulting 
        in the interim, and hopefully permanent, designation of an 
        ocean disposal site for qualified dredged material;
  --An EPA Superfund Remediation Project threatening to contaminate 
        project dredged material, and compound disposal problems; and
  --Approved use by the State Department of Toxic Substances Control 
        Remediation Project Site as an approved uplands disposal site 
        for beneficial use of dredged material unsuitable for 
        unconfined aquatic disposal.
    A large part of the credit-and a special debt of gratitude for much 
of this innovative work without which there would likely be no project 
commencing construction this year goes to our former Port Director, 
Michael R. Powers who was forced into premature retirement last year as 
a result of a tragic accident which he fortunately survived. Additional 
credit goes to our able Port Engineer, and until recently Acting Port 
Director, Gene Serex, who fortunately for us was able to step in and 
assume responsibility for project coordination and supervision, as well 
as to the port staff and consultants who have labored long and hard to 
get is to this point.
    The unique history of our project continues to the present time. We 
are also the first construction project we know of that is utilizing 
the new cost-sharing provisions for upland disposal sites for dredged 
material disposal enacted as part of the water resources development 
Act of 1996 (``WRDA 1996'') (Public Law 104-695). We anticipate that 
the enactment of this provision will result in direct savings to the 
city and the other local beneficiaries of as much as one million 
dollars. This could well spell the difference between our being able to 
afford proceeding with construction of the project or not.
    Unfortunately, estimated project construction cost continues to 
grow even as we approach bid advertisement. The revised cost estimates 
are based upon new dredging volume estimates rather than projected unit 
cost changes. So close to actual project construction I would not have 
anticipated this to occur, and I must say it gives us great 
apprehension until we see the actual bids and can finally determine our 
required local cash contribution during the period of project 
construction.
    We are grateful to the Chairman and the Members of the Subcommittee 
in providing $4 million in fiscal year 1997 to complete pre-
construction engineering and design and commence construction. The 
President's budget request contains $8.620 million in appropriations 
request in the construction general account to continue project 
construction.
    We request the Subcommittee increase this amount to $12.6 milllion 
to complete construction in fiscal year 1998 permitting the San 
Francisco District to advertise as a single construction contract in 
order to ensure the lowest possible total project construction cost to 
the Federal Government and taxpayer, and to the city and its partners 
as local project sponsors.
    The National Economic Development (NED) Plan for the project 
involves the construction of the project from the current 35 to 38 feet 
MLLW. The plan contemplates ocean disposal of the bulk of the 1.7 
million cubic yards of project dredged material at an EPA designated 
ocean disposal site, and consistent with the Long Term Management 
Strategy (LTMS) for dredged material management for the San Francisco 
Bay area. The balance of approximately two hundred thousand yards of 
project and berth material unsuitable for unconfined aquatic disposal 
will be treated and encapsulated for beneficial reuse at a port 
provided site dedicated to maritime use.
    In summary, as the Non-Federal sponsor and principle project 
proponent, we reaffirm our support and are prepared to move forward in 
partnership with the Corps to execute the proposed project scheduled 
for completion of construction in fiscal year 1998 with your 
assistance. we have made concrete progress in fulfillment of our 
project financial responsibilities through the creation of a navigation 
benefit assessment district. We have executed a final PCA to set the 
stage for commencement of project construction in July-August of this 
year. We have identified and acquired, and will shortly let the 
necessary contract for site improvements of the upland disposal site 
for dredged material disposal from project construction under new 
applicable Federal cost-sharing legislation.
    We ask the Subcommittee's help to assure the availability of the 
estimated $12,620,000 in Federal funds necessary to complete project 
construction in the fiscal year 1998 energy and water appropriations 
measure before the committee following contract award and commencement 
of project construction in fiscal year 1997.
    We are prepared to supplement our prepared remarks for the record 
in response to any questions from the Chair, Subcommittee Members, or 
staff may wish us to answer. Thank you.
                                 ______
                                 

        COLORADO RIVER BASIN WATER RESOURCE DEVELOPMENT PROJECTS

             Letter From Gov. Roy Romer, State of Colorado
                                         State of Colorado,
                                         Denver, CO, April 9, 1997.
Hon. Peter Domenici,
Chairman, Senate Appropriations Subcommittee on Energy and Water 
        Development, Washington, DC.
    Dear Chairman Domenici: I am writing to request your support for an 
appropriation of $7.162 million for fiscal year 1998 to allow the U.S. 
Bureau of Reclamation (Reclamation) to continue its activities 
associated with the Recovery Implementation Program for Endangered Fish 
Species in the Upper Colorado River Basin (Recovery Program). This 
amount has been requested by the Administration under a Reclamation 
item labeled ``Upper Colorado Region--Endangered Species Recovery 
Implementation Program.''
    The objective of this Recovery Program, now in its ninth year of 
operation, has been to cooperatively recover four endangered fish 
species while water development moves forward in compliance with the 
Endangered Species Act. The Recovery Program is mutually supported by 
the states of Colorado, Utah and Wyoming, environmental organizations, 
electric power customers, water development interests, Reclamation, the 
U.S. Fish and Wildlife Service and the Western Area Power 
Administration.
    Much has been accomplished with the money Congress has 
appropriated:
  --In fiscal year 1994, the Recovery Program initiated specific 
        studies and actions in preparation for the construction 
        activities necessary to recover the endangered fish including 
        the construction of the Redlands Fish Passage to allow the 
        endangered fish to return to historical habitats;
  --Instream flow protection efforts are underway on the Colorado River 
        (mainstem), Gunnison River, and Yampa River (including 
        enlargement of the existing Elkhead Reservoir), and existing 
        projects are being reoperated or modified. Using the $1 million 
        appropriated in fiscal year 1988, for example, Reclamation 
        began to secure water for the endangered fish. Through fiscal 
        year 1996, $655,400 from the previous appropriation has been 
        spent, $322,500 will be used in fiscal year 1997, and in fiscal 
        year 1998, the Recovery Program will spend the remaining 
        $22,100 to acquire water and water rights for the endangered 
        fish;
  --Historic habitats projects are restored through the acquisition and 
        restoration of flooded bottomlands and wetlands in Utah and 
        Colorado.
    Facilities are being developed for propagation and genetics 
management. The fiscal year 1998 funds I am requesting will enable 
these vital activities to continue.
    I would very much appreciate your support of this important multi-
state, multi-agency program, and I look forward to working with you in 
the future. Thank you for your consideration.
            Sincerely,
                                                 Roy Romer,
                                                          Governor.
                                 ______
                                 
 Prepared Statement of Randy Horiuchi, Commissioner, Salt Lake County, 
                                   UT
    On behalf of the Salt Lake County Commission I appreciate the 
opportunity to submit testimony to the House Energy and Water 
Development Appropriation Subcommittee regarding the Upper Jordan River 
Flood Control Project at Mill Creek, and the Upper Jordan River 
Restoration Project.
    First, I would like to discuss the Upper Jordan River Flood Control 
Project at Mill Creek. Salt Lake County has been working with the Army 
Corps of Engineers on the project for over fifteen years, which will 
provide flood protection for over 10,000 people along Mill Creek in 
central Salt Lake County.
    Continual flooding in the Upper Jordan River basin first led to a 
series of public meetings in 1977 to determine how this flooding could 
be mitigated. The focus of attention was on the Jordan River, Big and 
Little Cottonwood Creeks, and Mill Creek. The Corps began an Interim 
Investigation of the Upper Jordan River in fiscal year 1977, which 
included the entire Jordan River Basin of north-central Utah. The 
Jordan River Basin is located in the most highly developed and densely 
populated area in Utah, and includes the metropolitan areas of Salt 
Lake City and Provo-Orem. The area was selected for an interim 
investigation because of rapid urbanization and an increasing frequency 
of flooding and damages. The principal stream in the basin is the 
Jordan River, which flows about 40 miles through the Salt Lake Valley 
to its terminus in the Great Salt Lake. The Jordan River intercepts 
major tributaries in the Salt Lake Valley, including Little Cottonwood 
Creek, Big Cottonwood Creek, and Mill Creek, which originates in the 
Wasatch Mountains southeast of Salt Lake City. These creeks originate 
at high elevations in the Wasatch Front, where our world famous ski 
resorts are located, and flow westerly to the valley floor and their 
confluences with the Jordan River. The streams flow through narrow, 
deep canyons in the mountainous region before intercepting with the 
Jordan River, all of which has contributed to a long history of 
flooding. While flooding is most commonly associated with snowmelt 
runoff, flooding has also occurred from summer thunderstorms and 
general rainstorms.
    Salt Lake County experienced severe cloudburst flooding in 
September 1982 and snowmelt flooding in 1983 and 1984. All three events 
were at or near 100-year flood events. In 1983 and 1984, Salt Lake 
County was included in the President's emergency disaster declaration 
area. Following this flooding, Salt Lake County received voter approval 
for a $33.5 million Bond Issue to pay for major flood control 
improvements in the area. This coupled with FEMA emergency funds and 
our regular Flood control mill levy provided over $70 million to 
restore and improve flood control facilities. One of the major elements 
of the flood control system not completed by Salt lake County was the 
overflow diversion from Mill Creek to the Hillview Detention Basin. 
Since this project met the Corps' requirements, we requested that they 
take the lead on this project and we have proceeded to this point.
    The Mill Creek flood control project has three major features: the 
diversion structure located just above Highland Drive on Mill Creek, 
the diversion conduit, and the Hillview Detention Basin located on 
mostly County owned property at 4100 South between 900 and 1100 East 
Streets. The diversion structure is a concrete structure approximately 
200 feet by 41 feet in size. The diversion structure will divert excess 
flows to the Hillview Detention Basin via a 96-inch diameter conduit, 
which will provide protection from a 100-year flooding event. The 
Detention Basin stores the peak of the storm and releases the storage 
at a low rate of 30 cubic feet per second. The basin is designed for 
the combined 100-year peak flow volume from Mill Creek.
    The Mill Creek Flood Control Project is a critical element to the 
overall flood control system for Mill Creek. We have designed and built 
our channel capacity downstream of the diversion, based on the Federal 
Diversion project being in place. Residents of Salt Lake County will 
not have full protection from a 100-year flooding event without 
completion of the Mill Creek Project.
    The 1996 Water Resources Development Act (WRDA) included a 
provision which increased the cost ceiling for the Upper Jordan River 
Flood Control Project at Mill Creek to $12.87 million. Known as a 
Section 902 project modification, the increased authorization level was 
needed to allow the project to go to construction. The project was 
originally authorized in the 1990 WRDA at a total cost of $7.9 million, 
with a Federal cost of $5.2 million and a non-Federal cost of $2.7 
million. In addition, the Fiscal 1997 Energy and Water Appropriation 
Act included $500,000 to begin construction of the Upper Jordan River 
Flood Control Project.
    The President's Budget Proposal included $700,000 to continue 
construction of the project. These efforts include completion of plans 
and specifications on flood control features of the project, award or 
continuation of the mitigation and esthetic contract, completion of 
real estate acquisition for construction contract, and crediting of the 
mitigation lands. Therefore, I respectfully request that the 
Subcommittee support provide $700,00 for the Upper Jordan Flood Control 
Project at Mill Creek in the fiscal year 1998 Energy and Water 
Appropriation Bill.
Upper Jordan River Restoration Project
    I would like to request the Subcommittee's support for providing 
$500,000 in the fiscal year 1998 Energy and Water Appropriation Bill 
for a Feasibility Study on the Upper Jordan River Restoration Project 
through the Section 206 Aquatic Ecosystem Restoration Program.
    Section 206 is a new standing authorization program that was 
included in the 1996 Water Resources Development Act (WRDA) that passed 
Congress last year. The Corps of Engineers now has the authority to 
carry out ecosystem restoration and protection projects when it is 
determined that the project will improve the quality of the 
environment, is in the public interest, and is justified based on 
monetary and non-monetary benefits. The non-Federal share of costs is 
35 percent for construction, which can include land, easements, rights-
of-way, and necessary relocations, and 100 percent for operation and 
maintenance costs. No more than $5 million in Federal funds may be 
allotted to a project. The President's Budget Proposal included $2 
million for the 206 Program.
    There is increasing concern at both the State and local level in 
Utah regarding floodplain problems and wetlands deterioration along the 
Jordan River, as well as stormwater and nonpoint source pollution along 
the river. The Salt Lake County Commission believes that effective 
watershed management can help alleviate these problems. Channel 
protection and restoration using environmentally benign measures will 
not only provide flood control protection, but will also contribute to 
the restoration of water quality, control of sedimentation, and 
restoration of wetlands to their natural state.
    The Salt Lake County Commission has undertaken an aggressive 
program to protect the Jordan River, which is the principal drainage 
area in the Salt Lake Valley. The Commission believes that traditional 
flood control measures can be complemented by nonstructural measures 
that can help control flooding, excessive erosion, and sedimentation. 
To accomplish this goal, Salt Lake County instituted the Jordan River 
Sub-Basin Watershed Management Council in June 1993, which was 
established to promote and enhance intergovernmental coordination and 
planning efforts along all stream corridors in the Salt Lake Valley 
drainage area. The Council is comprised of state, local and federal 
representatives that serve an advisory role to the County 
Commissioners. This approach is the forerunner of state and federal 
movements toward the concept of total watershed management.
    As part of this watershed management program, Salt Lake County 
manages the Jordan River Wetland Acquisition Program, in which $7 
million authorized under the Central Utah Project Completion Act was 
provided to create open space reserves for up to 1000 acres of high 
quality wetlands which are threatened by development along the Jordan 
River. This funding will help protect the watershed and contribute to 
flood protection.
    Restoring the watershed through channel restoration is the next 
crucial step in flood control protection, and the Section 206 Aquatic 
Ecosystem Restoration Program will help accomplish this goal. The Salt 
Lake County Commission initially requested funding to restore the Upper 
Jordan River through the Section 1135 Environmental Restoration program 
as part of the 1996 WRDA. As you know, Section 1135 is a standing 
authorization program that allows the Corps to environmentally restore 
or enhance an ecosystem that has been degraded by a Corps water 
resources project. This request was based on the fact that the Corps 
had dredged approximately one mile of the Upper Jordan River. As a 
result, Section 107(6) of the 1996 WRDA authorized the Corps to conduct 
a study along the Upper Jordan River for channel restoration and 
environmental improvement, directing that the project be carried out 
under the Section 1135 Program, if appropriate. In addition, the Fiscal 
1997 Energy and Water Appropriation Act included $100,00 for a 
Reconnaissance Study of environmental restoration opportunities along 
the Upper Jordan River, that included examining water quality, wetland 
habitat, and flood control as a means of restoring the watershed of the 
Jordan River Basin.
    The Corps has informed Salt Lake County that environmental 
restoration of the Upper Jordan River under the 1135 Program is not 
cost effective, since the Corps only dredged approximately one mile of 
the Jordan River. The expanded 1135 Program allows the Corps to 
undertake restoration of environmental quality beyond the project area 
to include the area affected by the construction or operation of a 
Corps water project. However, even under this expanded program, the 
Corps does not believe it would be cost effective to undertake 
restoration of the Upper Jordan River through the 1135 Program.
    As a result, we are requesting the Subcommittee's assistance in 
obtaining $500,000 for a Feasibility Study under the Section 206 
Aquatic Ecosystem Restoration Program. Once the Feasibility Study is 
completed, which typically takes twelve to eighteen months, the Upper 
Jordan River Restoration Project would be ready to proceed to 
construction. Since the 206 Program is a standing authorization, the 
project could then proceed to construction without an authorization 
from Congress.
    The President's Fiscal 1998 Budget Proposal sent to Congress 
includes $150,000 for a Reconnaissance Study along the Upper Jordan 
River for environmental restoration. It is our understanding that a 
Reconnaissance Study is funded through the General Investigations 
Account, and that funding for a Feasibility Study under the 206 Program 
would need to come from the Construction Account.
    Extensive studies of the dredging, diking and channelization of the 
Jordan River have already been conducted, which include recommendations 
on how natural controls such as revegetation and stream stabilization 
could control flooding. Our most recent estimates identify 16 miles of 
the Jordan River that have been dredged, diked, narrowed and 
channelized from 2100 South to the Utah County line. The historical 
floods in 1982 resulted in further aggravation of both bed and bank 
erosion. Stabilizing the river beds would involve vegetative controls, 
as well as some structural components that will help regrade the river 
to achieve a more natural meandering flow. Extensive planning of 
environmental protection and restoration of the Jordan River over the 
last ten years should prove helpful to the Corps in the planning and 
construction of this project.
    Environmental restoration and protection of the Jordan River in the 
Salt Lake Valley will provide numerous benefits to the Federal 
government as well as Salt Lake County residents. Besides providing 
flood control protection by returning the river to a more natural 
meandering corridor, it will improve water quality, control of toxic 
sediments, and improve fish and wildlife habitat. Protecting the urban 
watershed through benign management techniques will reduce flood 
control costs to the Federal government in the future.
    Environmental protection and restoration of the Jordan River has 
wide support from all of the municipalities in Salt Lake County, as 
well as the State Department of Environmental Quality. I am hopeful 
that the Energy and Water Appropriation Subcommittee will provide 
funding for the Corps to conduct a Feasibility Study under the 206 
Program for the Upper Jordan River Restoration project.
    Thank you again for the opportunity to submit testimony before the 
Subcommittee on Energy and Water Development.
                                 ______
                                 
    Prepared Statement of Max Hogan, Mayor, City of West Jordon, UT
    I appreciate the opportunity to submit testimony regarding West 
Jordan's Water Reuse Project. West Jordan is seeking $500,000 in the 
fiscal year 1998 Energy and Water Appropriation Bill, which will 
provide funding for the design and engineering portion of the project, 
and also allow the project to begin construction.
    Thanks to the efforts of our congressional delegation, the City of 
West Jordan received an authorization for our water reuse project in 
H.R. 3660, the Reclamation Recycling and Water Conservation Act of 
1996. The total cost of the water reuse project is now projected at 
$6.6 million. H.R. 3660 authorized a 25 percent federal share for the 
project, or $1.65 million.
    The City of West Jordan believes federal support for the reuse of 
recycled wastewater is critical for arid states such as Utah, who must 
find alternative water sources in a rapidly developing region. West 
Jordan is currently developing a water reuse project, and the federal 
share authorized will make the project feasible by reducing the cost of 
the water, thereby making it more competitive with other water rates in 
the Salt Lake Valley.
West Jordan's Water Reuse Project
    West Jordan City, located in Salt Lake County, Utah, is 
experiencing rapid growth which has led to an increasing demand for 
water. Water use in West Jordan City more than doubled from 6,611 acre-
feet in 1984 to 13,263 acre-feet in 1994. That's over a 100 percent 
increase in just ten years. This rapid growth has continued. Wells 
owned by West Jordan City currently supply about 40 percent of the 
City's total water demand, and water purchased from the Salt Lake 
County Water Conservancy District (SLCWD) supplies the balance of the 
City's water demand. To meet this significant increase in water demand, 
West Jordan City has little other alternative than to purchase more 
water from SLCWCD Unfortunately, this is not a long range alternative 
since SLCWCD is projected to reach their committed peak flow capacity 
within the next two to three years. Without an alternative water 
source, West Jordan City, which currently purchases sixty percent of 
their water supplies from SLCWCD, will face a severe water shortage 
supply. Water conservation programs have already begun, but water 
conservation alone is insufficient to handle the burgeoning water 
demands of the Salt Lake Valley.
    To meet these anticipated water demands, West Jordan City believes 
that reclaimed water must be used as a water source for non-potable 
use. Reclaimed water is defined as properly treated municipal 
wastewater, and water reuse is defined as putting the reclaimed water 
to a beneficial use. Replacing potable water with reclaimed water for 
non-potable purposes will make additional water available for potable 
use. Reclaimed water is being used in a number of areas for 
agricultural and landscape irrigation, industrial use, groundwater 
recharge, and recreational and environmental enhancement, but has seen 
only very limited use in Utah.
    The Utah State Legislature passed legislation in 1995 allowing 
municipalities to reuse water discharged from wastewater treatment 
plants if the water originated under the water rights held by that 
municipality. Wastewater generated by West Jordan is currently treated 
at the South Valley Water Reclamation Facility (SVWRF), a regional 
wastewater treatment facility. West Jordan City could reuse their share 
of the effluent from SVWRF, once properly treated, to irrigate parks, 
golf courses, cemeteries, schools, and other open areas.
    The City will need to contract with the regional waste treatment 
facility for the purpose of reusing the effluent. The General Manager 
of the South Valley Water Reclamation Facility, John Callis, has 
indicated that SVWRF strongly supports water reuse and will cooperate 
with West Jordan's water reuse project.
Project Description
    West Jordan's water reuse project would consist of the construction 
of the facilities to treat and distribute reclaimed water for the 
irrigation of public and, possibly, private properties. Based on the 
``West Jordan City Water Reuse Feasibility Study'', conducted in 1995, 
with updated costs to 1998 dollars, the project is estimated to cost 
$6.6 million. The overall system would include piping, a main pump 
station, a booster pump station, a storage reservoir, and polishing 
filters. Reclaimed water could be pumped to the high end of the system 
throughout the day and night. During periods of irrigation, the overall 
demand would be met from both the reservoir and the pump stations. The 
main pipeline would connect the SVWRF to the storage reservoir located 
near Old Bingham Highway at Elevation 4720. The main pipeline would be 
located primarily in the railroad right-of-way and consist of 24 inch 
diameter PVC pipe. Lateral pipelines ranging from 6 inch diameter to 18 
inch diameter would connect the main pipeline to the irrigated areas.
    Pumping requirements would be met by a main pumping station at or 
near the SVWRF and a booster pump located at approximately the mid-
point of the water distribution system. The main pump station would be 
located near the outlet of the polishing filter. The overall system 
layout is shown in Appendix C. Results of the feasibility study show 
that 1 to 2 days of storage volume would be required to efficiently use 
the reclaimed water. Storage would be necessary because most irrigation 
would occur in a 7 to 8 hour period during the night, while effluent 
discharge from the SVWRF would have a tendency to be higher during 
morning and evening hours. Storage requirements for 1 to 2 days of 
operation during the period of peak demand would be 4.5 to 8.9 million 
gallons. A concrete lined, open reservoir with a total storage capacity 
of about 6 million gallons was recommended in the feasibility study.
    The filtration system is critical to the West Jordan Water Reuse 
Project, since the State Wastewater Reuse Rules require that the 
wastewater intended for Type 1 water reuse pass through a filtration 
system. Final effluent filtration is currently not in place at the 
SVWRF, so the filters would need to be constructed before Type 1 water 
reuse could be implemented. Disinfection would be required following 
filtration.
Cost Comparison
    The cost per acre-foot of reclaimed water is estimated to be $280 
or more. This is within the range of the costs of Salt Lake County 
Water Conservancy District's potable water, which costs on a weighted 
average to West Jordan City approximately $240 per acre-foot. However, 
West Jordan City has purchased water from SLCWCD at upwards of $340 per 
acre-foot. The cost per acre-foot of reclaimed water could be reduced 
by selling more reclaimed water at off-peak hours to industrial users 
or to other reuse alternatives. Grants or subsidized financing could 
significantly reduce West Jordan's cost for a water reuse project.
    West Jordan capacity for groundwater sources is limited, and cannot 
depend on the SLCWCD, which wholesales water to over half of the 
geographic area of the Salt Lake Valley, to provide additional water 
since peak capacity will be reached within three years. The SLCWCD will 
have to expand their capacity of aqueduct and treatment facilities by 
the year 2005 to meet increasing water demands in the Salt Lake Valley. 
West Jordan's water reuse project will reduce our dependency on potable 
water from the Conservancy District, and therefore reduce the need for 
expansion of their facilities. Over half of SLCWCD's capacity is 
devoted to outdoor irrigation. West Jordan's water reuse project, which 
is intended to be used to irrigate parks, golf courses, and other 
public entities, will reduce the peak loading on the SLCWCD system. For 
this reason, David Ovard, the General Manager of the SLCWCD, strongly 
supports our project.
Summary
    West Jordan's water reuse project for irrigation of parks, 
cemeteries, and golf courses is feasible and has the support of the 
South Valley Water Reclamation Facility as well as the Salt Lake County 
Water Conservancy District. However, the estimated per acre-foot cost 
of the reclaimed water would likely be higher than water purchased from 
the Salt Lake County Water Conservancy District or supplied by West 
Jordan's wells. As a result, alternative methods of financing must be 
found in order to make the project cost-effective.
    Water reuse would become more economically feasible if options are 
utilized that lower the construction costs for the reuse system or 
increase the annual water sales without increasing the peak demand. 
While West Jordan is pursuing low cost loans with the state and federal 
government, grants are also needed to make the water reuse project 
cost-effective. For this reason, West Jordan would greatly appreciate 
the Subcommittee's support for providing $500,000 to begin the West 
Jordan Water Reuse Project in the fiscal year 1998 Energy and Water 
Appropriation Bill. West Jordan would be prepared to provide a local 
match of $1.5 million. The appropriation request of $500,000 would 
provide funding for design and engineering, as well as begin 
construction on the project. This critical grant will make our project 
cost-effective, while at the same time mitigating the need for the 
water wholesaler in the Salt Lake Valley to make costly upgrades.
    Thank you again for the opportunity to submit testimony before the 
Energy and Water Development Subcommittee regarding the West Jordan 
Water Reuse Project. I hope that the Subcommittee will see fit to 
provide $500,000 for West Jordan's project in the fiscal year 1998 
Energy and Water Appropriation Bill.
                                 ______
                                 
   Prepared Statement of Councilmember David Rail, City of Provo, UT
    I would like to request the Subcommittee's support for providing 
$350,000 in the fiscal year 1998 Energy and Water Appropriation Bill 
for a Feasibility Study for the Flood Damage Reduction Project in 
Provo, Utah.
    From 1982 through 1984 Provo City was impacted by severe flooding 
which caused significant damage to the community. A state of emergency 
was declared in Utah County as well as Salt Lake County. The Army Corps 
of Engineers was called in at that time to construct dikes and levees. 
The Army Corps spent approximately $2 million to upgrade an existing 
dike adjacent to the Provo airport, and a new dike was constructed 
along the south side of Provo River from the Utah Lake State Park 
linking it with the airport dike. An additional dike was built along 
the north shore of Provo Bay to protect residential areas in the 
southwest section of the City. Congress specifically directed the Army 
Corps in 1983 to construct these flood control projects in Provo. 
However, Provo still spent $5 million in repairing damaged property and 
constructing emergency flood control projects, many of which were 
temporary in nature. Since Provo's annual budget at that time was only 
$15 million, providing $5 million was an enormous share for the City to 
finance. Most of the emergency flood control projects were related to 
runoff from Rock and Slate Canyons, which are part of federal lands 
owned by the U.S. Forest Service.
    As a result of this flooding disaster, Provo prepared a master plan 
which identified $30 million in flood control projects to be 
constructed, consisting of channels and pipes along with detention 
basins, inlet boxes, and related facilities. In an attempt to finance 
these improvements Provo created a Service District in 1992 that 
generates $500,000 a year for these capital improvements projects. 
However, at this rate of revenue generation it will take more than 50 
years to fund the flood projects identified in the master plan. Provo 
critically needs another source of funding to finance this flood 
control project.
    The flood control projects identified in the City's Master Plan are 
the next logical step in flood control for Provo, beyond the Utah Lake 
and Provo River Diking Project completed in cooperation with the Corps 
of Engineers in 1983 and 1984. Major elements of the capital 
improvement program are flood control projects required to handle 
snowmelt runoff from the canyons on federal lands immediately east of 
the City. Runoff from these canyons does not occur frequently, but when 
flooding does occur it can cause high flow quantities requiring large 
and expensive capital improvements. The flood control projects 
associated with canyon runoff have an estimated cost of $9 million. It 
is this portion of the flood control project for which the City of 
Provo is seeking involvement from the Army Corps of Engineers. The 
remaining $21 million in flood control improvements are considered 
local flooding problems in which the Corps has traditionally not had an 
interest. The City of Provo will finance the local flood control 
projects through the special taxing district established in 1992. As 
you can see, Provo is taking a proactive stance in preventing future 
flooding events from damaging our community. However, funding the 
entire project is beyond the local community's capabilities.
    The Corps has indicated that flooding caused by snowmelt from the 
mountains was clearly a flood control issue that should have Corps 
involvement, as opposed to a local drainage problem which would not 
fall under the Corps' jurisdiction. Major flooding events do not occur 
frequently in Provo, but when these events occur they can be massive in 
scope. A community the size of Provo, which has a population of 
approximately 90,000, cannot be expected to fund $30 million in flood 
control improvements entirely on our own. Provo has taken steps to 
largely finance flood control improvements in the City, but help is 
needed from the federal government for portions of the flooding that 
are not local in nature * * * especially since the major flooding 
events occur from lands owned by the federal government.
    The President's Budget Proposal included $350,000 for a Feasibility 
Study to continue the Provo Flood Damage Reduction Project. I 
respectfully request that the Subcommittee provide funding for this 
project in the Fiscal 1998 Energy and Water Appropriation Bill.
    Thank you again for the opportunity to submit testimony before 
Subcommittee on Energy and Water Development.
                                 ______
                                 
    Prepared Statement of Cathie Brown, Mayor, City of Livermore, CA
    On behalf of the City of Livermore, I appreciate the opportunity to 
submit testimony before the Energy and Water Development Subcommittee 
regarding the Greenville Road Improvement Project located near the 
Lawrence Livermore National Laboratories in Livermore, California.
    The City of Livermore began discussions with the Lawrence Livermore 
National Laboratory several years ago to define the Federal 
responsibility for improving Greenville Road, which is a major route to 
the laboratory. The improvements consist of widening Greenville Road 
from a two-lane to a four-lane roadway, and straightening a railroad 
overcrossing. Approximately 95 percent of the traffic on Greenville 
Road originates from the DOE facilities, which have approximately 
11,000 employees.
    Both Congress and the Lawrence Livermore National Laboratory have 
provided support in the past for the DOE's role in improving 
transportation facilities in Livermore. In 1991, thanks to combined 
efforts by the Laboratory and the City, two grants totaling $2.2 
million were allocated for widening and improvement of Vasco Road, 
which is another main entrance to the DOE facility. In addition, the 
Fiscal Year 1992 Defense Authorization Act and the Energy and Water 
Appropriation Act provided $1.8 million towards transportation 
improvements, which was used to conduct design and engineering for the 
Greenville Road Improvement Project.
    Before Congress would provide additional support for the project, 
they directed the DOE to develop a policy regarding their 
responsibility for transportation improvements. This policy was issued 
in September 1994 and outlines the process for DOE approval of a 
specific request for transportation improvements. The local DOE 
official responsible for a DOE site must determine that a request from 
a local taxing entity conforms to the policy, and then submits the 
request to the appropriate Assistant Secretary in Washington. A 
decision could then be rendered on whether or not DOE will seek funding 
for implementing the transportation work.
    Section 3165 of the Fiscal 1997 National Defense Authorization Act 
directed DOE to include in the fiscal year 1998 Budget a request for 
funds to pay the federal portion of the cost of transportation 
improvements under the Greenville Road Improvement Project at 
Livermore, California. The DOE was directed to work with the City of 
Livermore to determine the cost of the transportation improvements.
    As a result, officials from the DOE Oakland Office and the City of 
Livermore worked together last fall to determine the federal costs for 
the transportation project. The total cost for improving Greenville 
Road is $99.5 million, and it was mutually agreed that the federal 
responsibility for the Greenville Road Improvement Project should be 
$12.6 million, which includes widening Greenville Road near the 
laboratories and improving a railroad overcrossing. This amount 
included previous federal funding provided by the Laboratory, which 
totaled $4 million. Therefore, the remaining amount of $6.8 million was 
determined to be the balance of the DOE's responsibility.
    The President's Budget Proposal included $6.8 million for the 
Greenville Road Improvement Project, and the City of Livermore is now 
requesting the Subcommittee's support for providing half of the funding 
for the project, or $3.4 million, in the fiscal year 1998 Energy and 
Water Appropriation Bill. It was determined that only half of the funds 
for the project could be spent in one fiscal year. The City of 
Livermore is working concurrently with the National Security Committee 
to ensure that this project is authorized in the fiscal year 1998 
Defense Authorization Bill.
    Last November, the Livermore City Council approved a resolution 
stating that the City will consider the funding from the DOE of $6.8 
million as payment in full for DOE's portion of all future City road 
improvements in and around the vicinity of the Lawrence Livermore 
National Laboratory and Sandia National Laboratory.
    I appreciate the opportunity to submit testimony regarding the 
Greenville Road Improvement Project, and hope that the Subcommittee 
will support funding the project at a level of $3.4 million in the 
fiscal year 1998 Energy and Water Appropriation Bill.
                                 ______
                                 
Prepared Statement of Gerald R. Zimmerman, Executive Director, Colorado 
                River Board of California, Glendale, CA
                 colorado river basin salinity control
    Your support and leadership are needed in securing adequate fiscal 
year 1998 funding for the Department of the Interior with respect to 
the federal/state Colorado River Basin Salinity Control Program. This 
program is carried out through the Bureau of Reclamation pursuant to 
the Colorado River Basin Salinity Control Act and the Clean Water Act. 
California's Colorado River water users are presently suffering 
economic damages estimated at about $800 million per year due to the 
river's salinity, and those damages are expected to increase 
significantly by the turn of the century without salinity control.
    The Colorado River Board of California, the state agency charged 
with protecting California's interests and rights in the water and 
power resources of the Colorado River System, supports the 1998 federal 
funding of $16,800,000 proposed by the Colorado River Basin Salinity 
Control Forum for the Department of the Interior's Colorado River Basin 
salinity control activities.
    The seven Colorado River Basin states, which cost-share with the 
federal government up to 30 percent of the construction costs of 
Interior's salinity control measures, have carefully evaluated the 
federal funding needs of the program and have concluded that an 
adequate budget is needed for the plan of implementation to maintain 
the river salinity standards adopted by the seven Colorado River Basin 
states and approved by the Environmental Protection Agency, pursuant to 
the two federal authorizing Acts.
    In addition, the Colorado River Basin Salinity Control Forum and 
the Colorado River Board of California recognize that the federal 
government has made significant commitments to the Republic of Mexico 
and to the seven Colorado River Basin states with regard to the 
delivery of quality water to Mexico. In order for those commitments to 
be honored, it is essential that in fiscal year 1998 and in future 
fiscal years, the Congress provide funds to the Bureau of Reclamation 
for the operation and maintenance of the Yuma Desalting Plant.
    The Colorado River is, and will continue to be, a major and vital 
water resource for California. Preservation of its quality through an 
effective salinity control program will avoid the additional economic 
damages to river users in California that are expected by the turn of 
the century without such salinity control.
    The Board greatly appreciates your support of the federal/state 
Colorado River Basin Salinity Control Program and again asks for your 
assistance and leadership in securing adequate funding for this 
program.
                                 ______
                                 
 Prepared Statement of the Colorado River Basin Salinity Control Forum

Bureau of Reclamation--Fiscal Year 1998 Appropriation

Colorado River Basin Salinity Control Forum's Recommendation:
    Originally Authorized Program.............................$4,300,000
    Program Authorized in 1995................................12,250,000
    General Investigation Funds...............................   250,000
                    --------------------------------------------------------------
                    ____________________________________________________

      Total...................................................16,800,000

    This testimony is in support of funding for the Colorado River 
Basin salinity control program. Congress has designated the Department 
of Interior, Bureau of Reclamation, to be the lead agency for salinity 
control on the Colorado River. This role and the authorized program was 
refined and confirmed by the Congress when Public Law 104-20 was 
enacted into law. A total of $16,800,000 is requested this year to 
implement the needed and authorized program. Failure to appropriate 
these funds will result in significant economic damage and threaten the 
compliance with adopted water quality standards.
Overview
    The Colorado River Basin salinity control program was authorized by 
Congress in 1974. The Title I portion of the Colorado River Basin 
Salinity Control Act responded to commitments that the United States 
had made via a treaty with Mexico with respect to the quality of water 
being delivered to Mexico below Imperial Dam. Title II of the Act 
established a program to respond to salinity control needs of Colorado 
River water users in the United States and to comply with the mandates 
of the then newly legislated Clean Water Act. Initially, the Secretary 
of the Interior and the Bureau of Reclamation were given the lead 
Federal role by the Congress. Important modifications to the program 
were made by the Congress as legislation creating Public Law 104-20 was 
passed. This testimony is in support of funding for the Title II 
program.
    After a decade of investigative effort, the Basin states concluded 
that the Salinity Control Act needed to be amended. Congress revised 
the Act in 1984. That revision, while keeping the Secretary of the 
Interior as lead coordinator for Colorado River Basin salinity control 
efforts, also gave new salinity control responsibilities to the 
Department of Agriculture, and to a sister agency of the Bureau of 
Reclamation--the Bureau of Land Management. Congress has charged the 
Administration with implementing the most cost-effective (dollars per 
ton of salt removed) program practicable. The Basin states are strongly 
supportive of that concept, as the Basin states now cost share 30 
percent of federal expenditures for the salinity control program, while 
in addition proceeding to implement their own salinity control efforts 
in the Colorado River system.
    Since the congressional mandates of nearly two decades ago, much 
has been learned about the impact of salts in the Colorado River 
system. The Bureau of Reclamation has recently completed studies on the 
economic impact of these salts. Reclamation recognizes that the damages 
to United States' water users alone may soon be approaching $1 billion 
per year.
    The Colorado River Basin Salinity Control Forum (Forum) has become 
the seven-state coordinating body for interfacing with federal agencies 
and Congress to support the implementation of a program necessary to 
control the salinity of the river system. Forum members are appointed 
by the governors of the seven Colorado River Basin states. In close 
cooperation with the Environmental Protection Agency (EPA) and under 
requirements of the Clean Water Act, every three years the Forum 
prepares a formal report analyzing the salinity of the Colorado River, 
anticipated future salinity, and the program necessary to keep the 
salinities at or below the levels measured in the river system in 1972.
    In setting water quality standards for the Colorado River system, 
the salinity levels measured at Imperial, Parker, and Hoover Dams in 
1972 have been identified as the numeric criteria. The plan necessary 
for controlling salinity has been captioned the ``plan of 
implementation.'' Most recently, the Forum completed its 1996 Review of 
water quality standards, and the Colorado River Basin states have 
submitted this report to EPA. It was learned from the 1996 Review that 
the salinity program must be accelerated when compared with the 1993 
analysis if the water quality standards are to be honored. The funds 
requested herein are in keeping with this finding. If adequate funds 
are not appropriated, state and federal agencies involved are in 
agreement that the numeric criteria will be exceeded and damage from 
the high salt levels in the water will be widespread and very 
significant.
Justification
    The $16,800,000 requested by the Forum on behalf of the seven 
Colorado River Basin states is the level of funding necessary to 
proceed with the Bureau of Reclamation's portion of the plan of 
implementation. This funding level is appropriate if salinity in the 
Colorado River is to be controlled so as not to exceed the established 
numeric criteria and threaten the associated water quality standards. 
Currently, there are two authorizations provided by Congress which 
require appropriation. The first is for the original long established 
program authorized by Congress in 1974. The spending ceiling for this 
program will soon be reached and then funds for this portion of the 
program will be terminated. The second authorization, often termed the 
basin-wide program, was authorized by Congress in 1995. It gives to 
Reclamation new latitude and flexibility in seeking the most cost-
effective salinity control opportunities.
Details Concerning the Requested Appropriation
    On-going contracts with water users in the Grand Valley of 
Colorado, authorized under the original Salinity Control Act, require 
funds for the forthcoming fiscal year and many of the activities 
associated with the long-established program will be drawing to a 
close. The Bureau of Reclamation has completed the Paradox Valley unit 
which involves the collection of brines in the Paradox Valley of 
Colorado and the injection of those brines into deep aquifers through 
an injection well. The continued operation of the project and other 
completed projects will be funded through Operation and Maintenance 
funds. In addition to the dollars identified above, the Salinity 
Control Forum urges the Congress to appropriate necessary funds to 
continue to maintain and operate salinity control facilities as they 
are completed and placed into long-term operation. New programs and new 
efforts will be contracted for in the forthcoming year as the Bureau of 
Reclamation implements their basin-wide program authorized by the 
Congress in 1995. Funds will be used on a variety of projects and the 
process for selecting those projects is set forth in a report to the 
Congress that was required by the 1995 act.
    In addition, the Forum supports necessary funding to allow for 
continued general investigation of the salinity control program. It is 
important that the Bureau of Reclamation have planning staff in place, 
properly funded, so that the progress of the program can be analyzed, 
coordination between various federal and state agencies can be 
accomplished, and the identification of the future of the program can 
be properly planned.
                                 ______
                                 
   Prepared Statement of R. Max Peterson, Executive Vice President, 
        International Association of Fish and Wildlife Agencies
    The International Association of Fish and Wildlife Agencies was 
founded in 1902 as a quasi-governmental organization of public agencies 
charged with the protection and management of North America's fish and 
wildlife resources. The Association's governmental members include the 
fish and wildlife agencies of the states, provinces, and federal 
governments of the U.S., Canada, and Mexico. All 50 states are members. 
The Association has been a key organization in promoting sound resource 
management and strengthening federal, state, and private cooperation in 
protecting and managing fish and wildlife and their habitats in the 
public interest.
Bureau of Reclamation (BOR)
    The Association recognizes with appreciation the continued BOR 
shift away from project construction and toward non-structural water 
resources management objectives. The enhanced water conservation, 
reclamation and partnership themes of the fiscal year 1997 budget 
request certainly makes sense in the climate of the times. The 
Association notes with particular appreciation the number of projects 
specifically designed to enhance and restore fish and wildlife 
resources associated with BOR holdings.
    Water Conservation and Reuse.--BOR has requested funding for new 
water management and conservation activities. This request for added 
funding for these activities, funds made available largely through 
reductions in other more traditional activities, is supported by the 
Association. Among the types of work proposed are improvements in 
Colorado River operations, including new approaches to water salinity 
control; irrigation management improvements; and water reclamation and 
reuse projects in California.
    Central Valley Project.--It is most appropriate, and strongly 
supported by the Association that the BOR has requested use of $39.13 
million from the Central Valley Project Restoration Fund for much 
needed and overdue actions to benefit environmental conditions 
associated with the Central Valley Project. The habitat restoration and 
improvement, screening construction, and acquisition of water for 
refuge resources, and the continued work on the water temperature 
control capabilities at Shasta Dam will help restore fish and wildlife 
resources that have been adversely impacted by this project.
    Columbia/Snake River Salmon Recovery Project.--The Association 
strongly supports BOR's request for $13 million, including $8.2 million 
for water purchases, to address the increasingly serious situation 
associated with the endangered salmonid populations of these 
watersheds. While it is truly unfortunate that steps to remedy fish 
passage problems in these rivers necessitated a jeopardy biological 
opinion, it is recognized with appreciation that the fiscal year 1997 
BOR budget includes funding for water to provide flows to enhance 
downstream migration of young fish. Adequate and safe conveyance 
capability for young fish is absolutely essential to restoring salmon 
populations.
    Colorado River Endangered Species Recovery.--Responding to species 
poised virtually on the brink of extinction, the BOR has requested an 
increase in funding for critical work in the Colorado River Basin. The 
Association supports the request for $7.16 million for water 
acquisition, habitat improvements and construction of rearing 
facilities for these endangered resources.
    Wetlands Development.--The Association supports the increased 
funding request for the Wetlands Development line item at $6.3 million 
for this important effort.
Tennessee Valley Authority (TVA)
    The TVA budget request for fiscal year 1998 from appropriations is 
$106 million, representing no change from the funding provided in 1997. 
The request consists of $81.5 million for water and land management, 
$6.6 million for Chickamauga Lock and Dam, $7.9 million for the Land 
Between the Lakes Recreation Area, $4.0 million for Economic 
Development and $6.0 million for the Environmental Research Center at 
Muscle Shoals, AL.
    The President's budget recommends $81.5 million to support TVA's 
Water and Land Management category, an increase of approximately $8 
million over the fiscal year 1996 budget. The Association supports this 
expansion.
    The Association commends TVA for their tailwater fishing 
improvements below Douglas and Pickwick Dams and for numerous aeration 
projects. This work significantly enhances affected fisheries and is 
appreciated by fishermen throughout the TVA region.
    The Association recommends that TVA actively support and 
participate in the States' Clean Stream Initiative with the Office of 
Surface Mining (OSM) to complete projects in the TVA service area. 
These state-Federal-private cooperative projects are engaged in 
restoring fish, aquatic life, recreational and economic opportunity in 
watersheds damaged by acid mine drainage from past coal mining 
activities.
    The Association recognizes the importance of boating, fishing, 
camping, hunting, wildlife observation, and other conservation-oriented 
activities at Land Between the Lakes (LBL) and supports funding of $7.9 
million for these activities.
    We are encouraged that TVA has undertaken a serious review of 
public lands along TVA reservoirs and rivers to insure these properties 
are not utilized in such a manner as to exclude reasonable public use. 
Further, we support current and future planning efforts that insure 
conservation and protection of riparian habitat.
    The Association notes that discussions are underway which may 
result in TVA no longer seeking federal funding for programs. TVA has 
utilized appropriated dollars to improve the environmental quality of 
life in the Tennessee Valley. We urge careful study of the impacts of 
funding reductions should they be proposed in upcoming years.
U.S. Army Corps of Engineers
    The fiscal year 1998 budget proposal for Civil Works Appropriations 
of the U.S. Army Corps of Engineers is $3.88 billion, up from $3.78 
billion in fiscal year 1997. The budget proposal reflects continued 
commitment to proper management of our natural resources, through 
dedication of $637 million to environmental programs. This represents a 
significant increase from the $520 million funding level of 1997. The 
Association applauds the fact that many of our recommendations for 
recent fiscal years have been incorporated by the Corps in their 
succeeding year's budget request.
    As an example of an earlier recommendation, we had encouraged the 
Corps to expedite design and grant administration associated with 
Section 1135 projects as provided for within the Water Resources 
Development Act of 1986. We are pleased the Corps has taken steps to 
expedite the approval process for those projects through delegation to 
Division Commanders. We note the fiscal year 1998 budget contains a 
request for $21.2 million which represents an increase from the past 
year. As of December 31, 1996 twelve (12) projects were completed, 
twenty-seven (27) were under construction or design and fifty-two (52) 
were in the study phase. The Association has previously expressed a 
concern that some projects remain in the feasibility phase too long. We 
believe the Corps is addressing this problem, and grants will be 
administered more efficiently through Congressional approval of funding 
in the amount of $21.2 million for Section 1135 projects in fiscal year 
1998. We support this funding level.
    Our Association particularly appreciates the leadership of Congress 
in providing funding for mitigation projects. We are especially pleased 
that the Corps is requesting, and the Association supports, $127 
million for Columbia River Fish Mitigation in Washington, $3.4 million 
to complete mitigation of losses associated with the Tennessee-
Tombigbee Waterway in Alabama, $3.9 million for Missouri River fish and 
wildlife mitigation in Iowa, and 363,000 to mitigate fish and wildlife 
issues in the Yazoo Basin in Mississippi. The Association also strongly 
encourages Congress to appropriate necessary funding within the Corps 
budget to facilitate the mitigation feature of the West Tennessee 
Tributaries Project, which is needed to satisfy legal constraints to 
enable initiation of river restoration work within this significant 
watershed.We recommend that the Congress explore the need for generic 
legislative direction to the Corps to ensure that the older projects 
include the authority for fish, wildlife, water quality, and sustained 
minimum flow mitigation and enhancement, and if legislation is 
necessary, to act on that need. Further, the Association recommends 
that mitigation funding for ongoing projects be listed as a separate 
line item within the Civil Works Appropriations. This action would 
separate the funds from routine operations and maintenance and better 
facilitate the separate states' ability to identify the funds and seek 
legislative support for their interest.
    The Association is also generally supportive of the funding 
requested for some of the large river restoration projects. The 
Association supports the fiscal year 1998 request of $3.0 million to 
establish meanders and wildlife habitat on the Kissimee River and $75 
million to restore water flows through the Everglades and other areas 
in Florida. The Association also supports the budget requests of $14 
million associated with the environmental management efforts with other 
agencies in the Upper Mississippi River System. It is in the best 
interest of the country to restore the habitat and hydrologic 
components of these rivers that have been significantly altered under 
previous projects.
    With regard to the Corps' regulatory authority under the Clean 
Water Act of 1972, we strongly support the request of $112 million for 
implementation of a streamlined program to process, review, issue 
permits and provide an appeals procedure for the permitting of 
activities in waters of the United States, including wetlands 
associated permits and jurisdictional determinations as well as sand 
and gravel dredging activities. The Association believes a strong 
partnership program with state agencies affords the best opportunity 
for balanced conservation of aquatic resources.
    The Corps request of $20 million to develop zebra mussel control 
methods and strategies, evaluate ecological factors affecting control, 
and coordinate technology transfer is strongly supported. The Corps is 
the only Federal Agency directed to conduct research and development 
for the control of zebra mussels and their effects on public 
facilities. These mussels are having significant adverse effects on 
native shellfish and natural habitats.
    We support activities designed to enhance our environment. The 
utilization of dredge material to restore habitat in Chesapeake Bay in 
an excellent example. We support the fiscal year 1998 request of $30.6 
million for this project. We also support the $2 million request for 
Aquatic Ecosystem Restoration as authorized by the Water Resources 
Development Act of 1986.
    The Association recommends that the Corps continue in partnership 
with State Fish and Wildlife Agencies to initiate applicable 
restoration, mitigation and conservation projects. For example, we 
request the Corps continue to participate in the North American 
Waterfowl Management Plan through wetlands conservation, wetlands 
identification, and wetlands acquisition. In this regard, we support 
the $120,000 fiscal year 1997 request to continue cooperation with 
Federal and state agencies, and non-Federal interests in support of the 
North American Waterfowl Management Plan and for coordination of 
activities conducted under the Coastal America initiatives.
    The Association recommends that the Corps continue to work closely 
with the State fish and wildlife agencies to identify priority 
restoration, mitigation and remediation projects needing the Corps' 
attention. The State fish and wildlife agencies are generally aware of 
where Corps projects could most effectively enhance the status of fish 
and wildlife resources through improvements to habitat. In particular, 
we encourage the Corps to participate in funding projects to meet the 
objectives of the North American Waterfowl Management Plan. Further, we 
recommend that the Corps become a partner in the Appalachian Clean 
Stream Initiative to restore streams damaged by acid mine drainage.
Federal Energy Regulatory Commission (FERC)
    The Association recommends Congressional appropriation of $5 
million to allow FERC to reimburse state fish and wildlife agencies for 
studies and reviews associated with hydropower relicensing activities. 
Section 1701 of the Federal Power Act was amended in 1992 specifically 
to authorize reimbursement to states for this work. FERC has never 
sought appropriated funds for this purpose. If appropriated funds 
cannot be provided, FERC should be instructed to require reimbursement 
for this work by the licensee. Otherwise, projects will be proposed for 
relicensing without adequate studies of appropriate fish and wildlife 
licensing requirements. This invites conflict and possibly more 
stringent requirements, including water releases, than would be needed 
if more adequate studies were made.
                                 ______
                                 
  Prepared Statement of Hon. Jim Geringer, Governor, State of Wyoming
    This testimony supports the appropriation in fiscal year 1998 of 
$12,210,000 for the Bureau of Reclamation for Colorado River Basin 
Salinity Control Programs:

Originally Authorized Program (Public Law 93-320 as amended by 
    Public Law 98-569)........................................$4,300,000
Program Authorized in 1995 (Public Law 104-20)................ 7,600,000
General Investigation Funds for Colorado River Basin Salinity 
    Control Programs..........................................   310,000
                    --------------------------------------------------------------
                    ____________________________________________________

      Total...................................................12,210,000

    This testimony is submitted in support of a fiscal year 
1998 appropriation of $12,210,000 for the Bureau of 
Reclamation's Colorado River Salinity Control Programs. You 
recently received testimony from the Colorado River Basin 
Salinity Control Forum (Forum) submitted by the Forum's 
Executive Director, Jack Barnett, on behalf of the Forum's 
seven member states. The State of Wyoming concurs in the fiscal 
year 1998 funding requests and justification statements set 
forth in the Forum's testimony.
    The State of Wyoming is one of the seven member states 
represented on the Forum and the Colorado River Basin Salinity 
Control Advisory Council (Council). The Council was created by 
Section 204 of the 1974 Colorado River Basin Salinity Control 
Act, Public Law 93-320, and like the Forum, is composed of 
gubernatorial representatives of the seven Colorado River Basin 
states. Both the Council and Forum serve important liaison 
roles among the seven states, the Secretaries of the Interior 
and Agriculture and the Administrator of the Environmental 
Protection Agency (EPA). The Council is directed by statute to 
advise these federal officials on the progress of the federal/
state cost-shared, basin-wide salinity control programs, and 
annually recommends to the Federal agencies what level of 
funding it believes is required to allow the Program to meet 
its objective of assuring continuing compliance with the basin-
wide water quality standards.
    The Council met last October and developed funding 
recommendations for fiscal years 1998 and 1999 based on the 
progress the Programs are making in managing and reducing the 
salt loading into the Colorado River System. Based on analyses 
made by the Bureau of Reclamation and the Forum, the Council 
believes that a minimum of $15,000,000 needs to be expended by 
the Bureau of Reclamation each year for its salinity control 
activities, including operation and maintenance of facilities 
and features already constructed. We are pleased to note that 
the amount of funding included in the President's budget for 
this important, basin-wide water quality improvement and 
maintenance program is in excess of that amount when each of 
the recommended funding amounts for construction, general 
investigation and operation and maintenance are identified and 
summed in the recommended budget submittal. Wyoming 
respectfully requests your Subcommittee's approval of the 
funding amounts recommended by the President for the Colorado 
River Basin salinity control program budget items.
    If the necessary levels of funding are not provided for the 
Colorado River Basin Salinity Control Programs, there is an 
increased probability that the numeric criteria set in the 
water quality standards for the Colorado River may be exceeded. 
Delaying or deferring adequate funding for the Program at this 
time will create the need for a much more expensive salinity 
control effort in the future to assure that the Colorado River 
Basin states are able to meet the water quality standards for 
the Colorado River. ``Catch-up'' funding in future fiscal years 
will require the expenditure of greater sums of money, increase 
the likelihood that the numeric criteria for Colorado River 
water quality are exceeded, and create undue burdens and 
difficulties for one of the most successful Federal/State 
cooperative nonpoint source pollution control programs in the 
United States.
    I wish to thank you for the opportunity to submit this 
testimony, and would request, in addition to your consideration 
of its contents, that you make it a part of the formal hearing 
record concerning fiscal year 1998 appropriations for the 
Bureau of Reclamation.
                                ------                                

                  Prepared Statement of David Skidmore
    Thank you, Mr. Chairman and members of the Committee, for the 
opportunity to provide testimony to the Energy and Water Development 
Subcommittee regarding the status of the In Situ Technology Research 
Project at the Santa Cruz field test site near Casa Grande, Arizona. 
The project operates under a cost sharing cooperative agreement between 
the Bureau of Reclamation and the Santa Cruz Joint Venture (SCJV).
    My name is David Skidmore. I am the project manager, employed by 
the SCJV. As the non-Federal partner in the project, the SCJV is the 
prime contractor, reporting to the Bureau of Reclamation.
    In September of 1988, the SCJV signed a cooperative agreement with 
the U.S. Bureau of Mines to conduct a research project at the Santa 
Cruz site. This agreement specified that the Bureau would fund 75 
percent of the estimated $22,000,000 project, with the remaining 25 
percent to be funded by the SCJV.
    The In Situ project was transferred to the Bureau of Reclamation 
from the Bureau of Mines through a Memorandum of Understanding, 
effective February 2, 1996 to carry the program ``* * * through a 
logical completion point.'' This committee appropriated $444,000 for 
the project for fiscal year 1997, and we would like to express our 
great appreciation for your consideration and support for the program. 
The $444,000 was provided as an addition to previously appropriated and 
obligated funds which were transferred with the project.
    In keeping with the original and continuing contract, the SCJV will 
contribute approximately $470,000 in matching funds for project 
operations in fiscal year 1997.
    In directing that the project be transferred, the Congress also 
provided funds to be used ``* * * for the completion and/or transfer of 
certain ongoing projects * * *'' to cover personnel and overhead costs. 
This transfer included the In Situ contract. A portion of these ``in-
house'' monies are being dedicated to research coordination and 
oversight activities.
    Mr. Chairman, In Situ mining is a method of extracting metal from 
an ore body ``in place''--without excavation. Unlike conventional 
mining practices, there is no open pit or underground excavation of the 
ore-bearing rock. The chemical process being used to extract the copper 
from the Santa Cruz ore body has been generally used in heap leaching 
of previously excavated copper oxide ore. But the technology has never 
been used to extract copper from ore that is still in place deep in the 
ground, as it was deposited naturally through the millennia.
    The purpose of this experimental program is to test the technology 
at depth to see if it is technically possible, environmentally safe and 
economically feasible.
    It has taken a lot of time and work, and a great deal of 
cooperation between the partners, to get to this point. We first 
conducted site characterization studies to provide the technical data 
necessary to prepare detailed engineering designs and environmental 
permit applications. A ``five-spot'' well pattern was constructed 
through the proposed in situ mining test zone to provide the means to 
conduct hydrologic testing. Four monitor wells were also constructed 
through the aquifer that overlies the copper deposit.
    Utilizing a salt tracer test, we were able to conduct hydrologic 
characterization studies, laboratory leaching and attenuation tests and 
micro-scale geologic characterization studies. The salt tracer tests 
were very encouraging and demonstrated that the injected fluids could 
be contained and not migrate to the overlying aquifer.
    All of the field and laboratory preparation was necessary to 
develop an application for the Aquifer Protection Permit (APP), 
required by the Arizona Department of Environmental Quality. At the 
same time, the Bureau of Mines conducted an Environmental Assessment as 
required by the National Environmental Policy Act (NEPA). This process 
included two public hearings in Casa Grande, Arizona, which were well 
publicized and attended. The draft EA was made public in September of 
1994, and was well received. No negative comments were expressed, or 
received in writing by the Bureau. On December 1, 1994, the Bureau 
issued a Finding of No Significant Impact (FONSI).
    We have since received the Aquifer Protection Permit from the ADEQ 
as well as an Air Quality Permit from Pinal County, Arizona.
    The permitting process was lengthy and complex. However, the APP is 
the first such permit ever issued for an In Situ leaching process for 
an unmined deposit. A large number of unknowns were explored and 
resolved, greatly clarifying and defining the process. Future permit 
applications will be far less complex for other mining operations.
    With the receipt of the permits and the FONSI, we proceeded to the 
construction of the surface facilities were completed in December. We 
then conducted and completed our commissioning and ``shakedown'' tests.
    I am very pleased to say, Mr. Chairman, that we are now well into 
Phase Four of the program: field test operation and data collection. We 
have begun to extract metal from the solution through solvent 
extraction/electrowinning (SX/EW) in concentrations sufficient to 
``plate'' pure copper. However, this accomplishment has not been 
without surprises and technical problems that we have had to confront 
without the advantage of previous experience. For example, attempting 
to increase copper loading through the management solution flow paths 
has resulted in a need to modify well construction. Additionally, the 
operation of the lift system with full strength solutions has required 
a series of changes by the manufacturer just to survive the aggressive 
solutions and keep the pumps operating.
    We anticipate that the test will take two years to accumulate 
enough data as to determine technical and economic feasibility, and 
confirm environmental protection. This is truly the ``payoff'' phase of 
the project. Although it is the final two or three percent of the 
program in terms of funding, it will provide ninety percent of the 
useful information that was originally anticipated. To get a handle on 
the economics of In Situ mining, we must first master the technical 
aspects of controlling and directing solutions to target concentrations 
within the ore body.
    And although the original objectives of the program were limited to 
the development of mining technologies, we have discovered very 
promising applications for underground stabilization and removal of 
chemical and biological contamination. This could include the placement 
of physical barriers at a wide variety of depths.
    As a result of these discoveries, the project is very compatible 
with the Bureau of Reclamation's mission to reduce human impacts on 
surface and ground water resources and improve water quality through 
the application of new engineering technologies. And, in keeping with 
the statement of the managers in the fiscal year 1997 Conference 
report, we are cooperating with the Bureau in an examination of our 
research data to facilitate the application of the technology to other 
Bureau programs.
    We will continue to conduct the field test through fiscal year 1998 
to achieve conclusive evidence of technology efficiency and sufficient 
manipulation and control of the mining solutions to demonstrate 
economic feasibility for commercial applications, and transfer to the 
industry at large.
    We estimate the total requirement for the field test in fiscal year 
1998 to be $1,400,000 and respectfully ask that Committee add that sum 
to the Bureau of Reclamation's appropriation for that purpose.
    It is also our understanding that the continuing oversight and 
supervisory requirements of Bureau personnel will require approximately 
$300,000 in addition to the remaining funds transferred with the 
contract.
    I think it is important to point out that this lengthy and 
intensive process could not have been successful without a very 
successful partnership between the federal agencies and the private 
sector. If conducted only by the private sector, this information would 
remain proprietary and would not be available to the general public or 
contribute to the overall advance of mining and groundwater technology. 
The project will be a model for effective cost-sharing partnerships in 
research and experimental programs.
    Again, I would like to thank you, Mr. Chairman, and members of the 
committee, for allowing me this opportunity to present testimony for 
the record.
                                 ______
                                 

         DEPARTMENT OF ENERGY RESEARCH AND DEVELOPMENT PROGRAMS

 Prepared Statement of Dr. Donald L. Klass, President, Biomass Energy 
                          Research Association
    This testimony pertains to DOE's appropriation request for 
Biopower/Biofuels Energy Systems.
    The Biomass Energy Research Association (BERA) was founded in 1982 
and is a non-profit association headquartered in Washington, D.C. Our 
objectives are to promote education and research on biomass energy and 
waste-to-energy systems that can be economically utilized by the 
public, and to serve as a source of information on policies and 
programs.
    I would like to thank the Subcommittee on behalf of BERA's members 
for the opportunity to present our position on the federal funding of 
biomass research. Continued federal support of this program is 
essential to provide the stimulus to develop renewable, environmentally 
clean, alternative energy resources that can displace and help conserve 
our valuable fossil fuels, address many of the environmental issues 
that confront our Nation, and help alleviate the economic problems 
created because of our dependence on imported oil.
    I had the opportunity to examine the details of DOE's request for 
biomass funding in fiscal year 1998 before this testimony was prepared, 
and would like to comment on the concerns that BERA's Board of 
Directors have before our recommendations are presented. DOE's emphasis 
on scale-up projects, which are relatively costly and consume a 
disproportionately large portion of the DOE appropriation for biomass, 
has adversely impacted the research program component. Even with a 
minimum of 50 percent industry cost-sharing for the scale-up projects, 
DOE has been compelled to terminate research in several thermochemical 
and microbial conversion areas. We feel that a balanced research 
program should be sustained and protected. We have therefore continued 
to recommend both a diversified portfolio of research and an 
appropriate amount of funding for scale-up without diminishing either 
the research or scale-up programs. The BERA Board is also concerned 
that biomass gasification research for hydrogen production in progress 
under the Interior Appropriations Bill duplicates some of the research 
already completed or in progress under the Energy and Water Bill.
    DOE's request for biomass funding in fiscal year 1998 includes a 
substantial amount of detail that has generally not been presented in 
the past. The R&D plan has basically been updated as we have 
recommended for the past few years, so BERA is not recommending that it 
be done again in fiscal year 1998. A significant amount of information 
is elaborated in DOE's fiscal year 1998 request as to specific projects 
and expenditures. Our recommendations are presented in the same manner 
and order as the DOE request, but we have added several research areas 
that are either new or that BERA's Board recommends be restored to 
sustain a balanced research program.
    Specifically, BERA recommends that $88 million be appropriated for 
biofuels research and development, and industry cost-shared scale-up in 
fiscal year 1998. The highlights are:
  --A total of $53 million for research and $35 million for industry 
        cost-shared scale-up projects, not including the industry cost-
        shared amount of at least $35 million.
  --$16 million for research and $25 million for industry cost-shared 
        scale-up projects by the Office of Utility Technologies. The 
        scale-up projects include the Hawaii and Vermont gasification 
        and the integrated biomass production-conversion projects.
  --$35 million for research and $10 million for industry cost-shared 
        scale-up projects by the Office of Transportation Technologies, 
        including $8 million for technology transfer managed by DOE's 
        Regional Biomass Program. The scale-up projects include the 
        NREL ethanol process development unit in Colorado, the BCI 
        International Corporation ethanol plant in Louisiana, the 
        Gridley ethanol project in California, and selected feedstock 
        production projects on plots of at least 1,000 acres in size.
  --$2 million for research by the Office of Industrial Technologies.
            allocation of appropriation recommended by bera
    Regarding specific DOE budget categories, BERA recommends that the 
appropriation for fiscal year 1998 be allocated as shown in the 
accompanying table. The allocations are listed in the same order as 
DOE's request for fiscal year 1998, except that certain research areas 
have been added that DOE eliminated or that are new research areas. 
Note that the recommended budget for each scale-up project includes 
only DOE funds. It does not include industry cost-shared funds, which 
are required to be a minimum of 50 percent of the total budget for each 
scale-up project.

            OFFICE OF ENERGY EFFICIENCY AND RENEWABLE ENERGY            
------------------------------------------------------------------------
                                                   Recommended Budget   
                                               -------------------------
              Office/Program Area                   For       For Scale-
                                                  Research        Up    
------------------------------------------------------------------------
Utility Technologies:                                                   
    Thermochemical Conversion:                  ...........  ...........
        Advanced Combustion...................   $2,000,000  ...........
        Cofiring with Coal....................    2,000,000  ...........
        Advanced Gasification.................    2,000,000  ...........
        Advanced Pyrolysis....................    2,000,000  ...........
        Fuel Cell Systems.....................    2,000,000  ...........
        Emission Control Systems..............    1,000,000  ...........
        Wastewater Treatment..................      500,000  ...........
        Ash Disposal and New Uses.............      500,000  ...........
        Hot-Gas Clean-Up......................      500,000  ...........
        Advanced Materials....................      500,000  ...........
    Microbial Conversion: Advanced Digestion..    2,000,000  ...........
    Systems Development:                                                
        Hawaii and Vermont Gasifiers..........  ...........   $7,000,000
        Integrated Biomass Production-                                  
         Conversion Projects..................  ...........   18,000,000
    Cogeneration: Advanced Combined Cycles....    1,000,000  ...........
    Municipal Solid Waste.....................      ( \1\ )  ...........
    Feedstock Production......................      ( \2\ )  ...........
    Regional Biomass Program..................      ( \3\ )  ...........
                                               -------------------------
      Subtotal................................   16,000,000   25,000,000
Transportation Technologies:                                            
    Regional Biomass Program..................    8,000,000  ...........
    Microbial Ethanol:                          ...........  ...........
        Lignocellulosics Hydrolysis...........    5,000,000  ...........
        Lignocellulosics Fermentation.........    5,000,000  ...........
        Academic Consortium Projects..........    1,000,000  ...........
        NREL Ethanol Plant....................  ...........    4,000,000
        BCI International/U. Florida..........  ...........    4,000,000
        Gridley, California/NREL..............  ...........  ...........
    Biodiesel Production......................    1,000,000  ...........
    Feedstock Production......................    6,000,000    2,000,000
    Thermochemical Conversion:                                          
        Ethanol Production....................    2,000,000  ...........
        Mixed Alcohol Production..............    3,000,000  ...........
        Oxygenates from Biomass...............    2,000,000  ...........
        Reforming Alcohols for Autos..........    2,000,000  ...........
                                               -------------------------
          Subtotal............................   35,000,000   10,000,000
Industrial Technologies:                                                
    Municipal Solid Waste.....................    1,000,000  ...........
    Chemicals.................................    1,000,000  ...........
                                               -------------------------
      Subtotal................................    2,000,000  ...........
Capital Equipment.............................  ...........  ...........
                                               -------------------------
      Total...................................   53,000,000   35,000,000
                                               =========================
      Grand Total.............................                          
(1) 88,000,000                                                          
------------------------------------------------------------------------
\1\ Included in Industrial Technologies.                                
\2\ Included in Transportation Technologies.                            

      bera recommends a balanced program of research and scale-up
    BERA's recommendations comprise a balanced program of research and 
scale-up on feedstock production, conversion research, and technology 
transfer to the private sector. Advanced power generation technologies, 
alternative liquid transportation fuels, innovative municipal solid 
waste disposal-energy recovery systems having superior environmental 
benefits and minimal emissions, and novel biomass-to-chemicals 
processes are emphasized.
    In addition, BERA strongly urges that at least 50 percent of the 
federal funds for biomass research, excluding the funds for the scale-
up projects, be used to sustain a national science and technology base 
in biomass via subcontractors outside DOE's national laboratories. 
While it is desirable for the national laboratories to manage and 
coordinate DOE-sponsored research activities, support for independent 
U.S. scientists and engineers in biomass industries, academe, and 
research institutes that are unable to fund research will encourage 
commercialization of emerging technologies and serious consideration of 
innovative approaches. It will also help expand the professional 
development and expertise of a broad and diverse group of researchers 
committed to the advancement of biomass energy technology and 
alternative fuels.
    The following represents BERA's specific recommendations for the 
research and industry cost-shared scale-up program areas and the 
funding we urge you to include for fiscal year 1998.
                     office of utility technologies
Thermochemical Conversion
    Currently, there are about 8,000 MW of on-line electric power 
capacity fueled by biomass. Most of this capacity is fueled by the heat 
and steam raised from conventional waste biomass combustion. Municipal 
solid waste, and forest and wood products residues are the primary 
fuels. Development of advanced combustion methods for these fuels and 
other biomass could have significant economic and environmental 
benefits that can lead to further growth in biomass power generation. 
One of the high priority research areas for this research is the 
cofiring of biomass and coal, which offers several opportunities for 
reducing undesirable emissions and pollutants at low cost. However, 
much of the laboratory and small-scale experimental research necessary 
to perfect these processes has been terminated by DOE. Previous 
research on the thermochemical gasification of biomass has resulted in 
the development of a few advanced process designs and reactor 
configurations that maximize product yields and provide optimum product 
distributions, but again, most of the research has been terminated. 
Advanced pyrolysis processes that are practical sources of energy and 
fuel have essentially not been developed at all in the United States 
because the research was terminated, while significant advances have 
been made elsewhere and in some cases, commercialized worldwide, 
including in the United States. Research (not scale-up) should be 
initiated again by DOE for each of these 4 areas--combustion, cofiring, 
gasification, and pyrolysis--with the goal of developing the next 
generation of thermochemical biomass conversion processes for power 
generation. Integration of biomass gasifiers with fuel cells should 
also be researched as potential, high-efficiency power generation 
systems. Fuel cell systems that can tolerate the sulfur levels found in 
certain biomass-derived fuel gases without sacrificing system 
affordability as well as the testing of integrated gasification-fuel 
cell systems should be included in this research.
    In addition to the restoration of this important research, priority 
should also be given to the development of innovative enabling 
technologies consisting of advanced emission control systems, advanced 
wastewater treatment methods, improved ash disposal methods and new 
uses, effective, low-cost, hot-gas clean-up methods, and advanced 
materials that eliminate corrosion and erosion problems for 
thermochemical reactors and combustion turbines for biomass feedstocks. 
The status of each of these technologies is far from what is needed, 
yet they are essential for practical, low-cost thermochemical 
conversion of biomass.
    BERA recommends that a total of $13.0 million, allocated as shown 
in the table on page 2 of this testimony, be appropriated for this 
research.
Microbial Conversion
    Microbial gasification is unique in that the process produces 
methane directly as a primary product from the full range of biomass 
including virgin biomass and many waste biomass types. Methane is the 
major fuel component in natural gas. Research is needed to develop 
advanced systems that permit higher feedstock concentrations and 
smaller reactor volumes, and therefore lower capital costs. This 
research is expected to lead to practical methods for alleviating 
numerous environmental problems caused during waste disposal and the 
economic production of methane from low-cost biomass. And in the case 
of municipal wastewaters, municipal solid waste, and wastes in 
landfills, low-cost, waste stabilization-methane production systems are 
expected to evolve from continued research. BERA recommends that $2.0 
million be provided to restore this research to DOE's program.
Systems Development
    The projects to scale-up medium-Btu gas production and power 
generation in Hawaii and Vermont were continued in fiscal year 1997. 
DOE's funding request for fiscal year 1998 indicates the Hawaiian plant 
will be scaled further through a cost-shared venture with a private 
sector partner, and that construction of the Vermont plant will be 
completed in fiscal year 1998. These projects should be continued. The 
4 integrated biomass production-conversion projects chosen by DOE for 
scale-up from the feasibility studies should also be continued. BERA 
recommends that $7.0 million be appropriated for the gasification 
projects as DOE requested, and that $18.0 million be provided to enable 
initiation of Phase II of the integrated biomass production-conversion 
projects selected by DOE for New York, Iowa, and Minnesota (2 
projects).
Cogeneration
    The development and testing of direct biomass combustion turbines 
and small, biomass-fueled power systems should be continued, 
particularly to assist in the design of advanced combined cycle systems 
that can supply cogenerated power and energy at high efficiencies. An 
alternative that should also be included in this research is the 
integration of advanced thermochemical conversion processes with power 
generation in steam-injected gas turbines (STIGS). BERA recommends that 
$1.0 million be provided for this research.
                 office of transportation technologies
Regional Biomass Program
    Although the Regional Program is carried out with a broad spectrum 
of industry in transportation fuel, electric power, and other sectors, 
it is managed by DOE's Office of Transportation Technologies. The 
Regional Biomass Program established by Congress in 1983 is implemented 
through five separate regions located in the Southeast, Northwest, 
West, Great Lakes, and Northeast. These programs have been important in 
establishing individual state biomass programs, and in stimulating 
technology transfer and the development and commercialization of the 
biomass energy industry in the private sector. The Regional Biomass 
Program activities have created awareness and a positive image for 
biomass energy while providing significant environmental enhancement 
and creating new jobs, especially in rural areas. Regional Program 
activities are typically highly leveraged with industry adding 2 to 4 
times the investment of federal dollars. One example is the development 
and installation of low-cost, anaerobic lagoons for treatment of 
livestock waste and generation of methane. This technology is usable in 
hundreds of applications and offers combined energy recovery and waste 
treatment, while capturing and using methane that would otherwise 
contribute to global climate change. The five Regional Programs should 
be maintained to stimulate and assist in the development of the biomass 
industry and they should also take the lead role in transferring 
laboratory results to the private sector. BERA urges that $8.0 million 
be provided to continue and expand the work of the Regional Programs.
Microbial Ethanol
    Application of the rapidly advancing field of biotechnology to the 
conversion of low-cost lignocellulosics to liquid fuels such as ethanol 
should be continued. The successful genetic engineering of bacteria 
that can ferment all the pentoses and hexoses in these feedstocks at 
the same time is expected to result in considerable reduction of the 
cost of ethanol. Future research should be concentrated on conversion 
of lignocellulosics by high-yield, acid-and enzyme-catalyzed hydrolysis 
processes to the free sugars, on integrating this technology with the 
fermentation process, and on the utilization of the lignin fractions as 
octane enhancers and chemicals. BERA recommends that the funding for 
this research consist of $5.0 million for hydrolysis research and $5.0 
million for microbial ethanol research.
    It is also recommended that funding of $1.0 million be provided for 
50:50 cost-shared, long-term research projects with the Consortium for 
Plant Biotechnology Research, which is a group of universities having 
many faculty who are specialists in fermentation ethanol.
    BERA also recommends that funds be provided for the following 
industry cost-shared projects: $4.0 million for operation of NREL's PDU 
for production of microbial ethanol from lignocellulosic feedstocks in 
Colorado by simultaneous saccharification-fermentation (SSF) process 
and $4.0 million for the microbial ethanol plant in Louisiana that will 
use lignocellulosic feedstocks and the University of Florida's 
genetically engineered bacterium that simultaneously ferments all the 
pentoses and hexoses. The microbial ethanol project in Gridley, 
California for the conversion of rice straw by SSF is expected to be 
continued with carry-over funds from fiscal year 1997. The NREL plant 
is being operated with a CRADA partner to obtain scale-up data. 
Successful operation of this plant will establish the technical 
feasibility of the SSF process.
Biodiesel Production
    Considerable progress has been made by U.S. researchers to develop 
biodiesel fuels from natural triglycerides produced by biochemical 
processes that occur within growing biomass. This research should be 
continued with emphasis on the reduction of biodiesel costs and 
performance characteristics to satisfy the requirements of the EPA and 
engine manufacturers. BERA recommends that $1.0 million be directed to 
continue biochemical conversion research for transportation 
applications.
Feedstock Production
    Land-based biomass grown and harvested specifically for liquid 
biofuels represents a long-term approach to energy plantations that can 
supply large amounts of fossil fuel substitutes. Considerable progress 
has been made on the efficient production of short-rotation woody 
crops, and on the growth of herbaceous species. In addition, research 
on tissue culture techniques and the application of genetic engineering 
methods to low-cost energy crop production have shown promise. This 
research should be continued to develop advanced biomass production 
methods to meet the anticipated feedstock demand in both the 
transportation and power production sectors. Conventional production 
methods are insufficient to supply sustainable biomass energy over the 
long term. BERA recommends that $6.0 million be directed to continue 
biomass production research.
    BERA also recommends that industry cost-shared, scale-up projects 
chosen by DOE of at least 1,000 acres in size be started to initiate 
development of large-scale, commercial energy plantations in which 
dedicated energy crops are grown and harvested for use as biomass 
resources. These projects should be strategically located and should 
utilize the advanced biomass production methods developed from the 
research conducted to date. Successful completion of this work will 
help biomass energy attain its potential by providing the data and 
information needed to design, construct, and operate new biomass 
production systems that can supply low-cost feedstock for both 
conversion to transportation fuels and electric power. BERA recommends 
that this scale-up effort be funded at $2.0 million.
Thermochemical Conversion
    Thermochemical conversion research to produce clean-burning, 
storable, liquid transportation fuels at competitive costs is the prime 
target of this program component. Research has established the 
technical feasibility of several advanced liquefaction processes, and 
has improved our understanding of the mechanisms of conversion. Direct 
conversion of wood and herbaceous feedstocks via pyrolysis to liquid 
fuels and their upgrading by advanced catalytic processes to 
transportation fuels show promise. Continued research is expected to 
increase the overall liquid yields to the point where the gasoline 
costs are competitive with those of petroleum-based fuels. Research on 
the on-board reforming of storable alcohols shows considerable promise 
as a source of high-hydrogen auto fuels. This technology has the 
potential of supplying vehicular power at very high efficiencies via 
fuel cells or internal combustion engines. Research on the 
thermochemical conversion of low-grade biomass for the production of 
low-cost ethanol, mixed alcohols, and ethers via synthesis gas for use 
as auto fuels also shows promise. Preliminary work indicates the 
conversion of synthesis gas has the potential of producing ethanol, 
mixed alcohols, and ethers at costs that are much less than the 
corresponding costs of microbial products or derivatives. Each of these 
areas should be added to DOE's program. BERA recommends that funding be 
provided as follows: $2.0 million for thermochemical ethanol research, 
$3.0 million for thermochemical mixed alcohol research, $2.0 million 
for developing biomass-derived oxygenates by thermochemical processes, 
and $2.0 million for alcohol reforming research.
                   office of industrial technologies
    Municipal Solid Wastes.--Research is still needed to develop 
improved methods to measure the emissions of solid waste disposal 
processes on-line, and to incorporate automatic feedback controls 
during disposal and energy recovery. There is also a major need for 
low-cost, solid waste disposal systems for small communities and 
building complexes.
    Chemicals.--Waste biomass can be converted to a wide range of 
chemicals. Research should be continued to develop advanced processes 
that utilize thermochemical and biochemical conversion methods as well 
as advanced physical separation techniques.
    BERA recommends that $2.0 million be appropriated to continue 
research on both improved municipal solid waste disposal and advanced 
processes for chemicals from biomass.
                                 ______
                                 
  Prepared Statement of Dr. Bernard Lee, President, Institute of Gas 
                               Technology
    The Institute of Gas Technology (IGT), located in Des Plaines, 
Illinois, is a not-for-profit research and educational institute. For 
over 50 years, we have performed technology-related research and 
development for the federal government, the natural gas industry and 
other private-sector clients. Our unique status allows us to play a 
significant role in the development of technologies that have wide-
ranging application and benefit.
    We submit this testimony in support of two areas that link IGT 
experience with the Energy & Water subcommittee's jurisdiction: the 
Department of Energy programs in biomass and hydrogen research.
Biomass programs:
    For fiscal year 1998, DOE has requested a significant increase in 
the overall Biopower/Biofuels Energy Systems budget. IGT urges this 
subcommittee to support that full request. Increased use of renewable 
biomass energy represents a great opportunity for increased energy 
self-reliance for many parts of our country, in rural areas and 
targeted industrial sectors, as well as for many international 
applications. With technologies currently under development in the DOE 
program, those gains can be made economically and in an environmentally 
sound manner. Although the DOE fiscal year 1998 request represents an 
increase over current fiscal year 1997 spending, it reflects the 
significant, steady progress in biopower/biofuels technologies, and 
remains a relatively small federal commitment when compared to the 
energy and environmental contributions that biopower/biofuels 
technologies will provide.
    In the biomass energy research area, IGT is currently actively 
involved in two major DOE cost-shared projects in the Biopower Energy 
Systems--Utilities--Systems Development area. Both these projects show 
strong promise for the successful, efficient conversion of renewable 
biomass to clean, cost-competitive electricity.
    The first IGT-related project is the 100-ton-per-day Biomass 
Gasifier Facility (BGF) in Hawaii, converting bagasse, the biomass 
waste from a sugar refining operation, into a bio-fuel for electrical 
power generation. This project began in 1991, and is expected to 
complete its current testing phase with fiscal year 1997 funding.
    With a year-round growing season, Hawaii can produce sufficient 
biomass to meet a substantial portion of its electrical generation fuel 
needs if a viable technology is available to convert biomass into an 
appropriate bio-fuel for a modern power plant. Biomass gasification is 
the most promising way to produce this bio-fuel. The bio-fuel can then 
be used for power generation via conventional gas turbines or fuel 
cells. For these reasons, Westinghouse Electric Corporation (WEC), the 
Pacific International Center for High Technology Research (PICHTR) and 
IGT entered into an agreement with DOE to design, construct, operate, 
and evaluate a BGF. The Hawaiian Commercial & Sugar Company (HC&S), the 
State of Hawaii, and the Hawaii Natural Energy Institute (HNEI) of the 
University of Hawaii are important participants in this program.
    The initial phase of the project concentrated on engineering scale-
up, process performance, and demonstration of biomass quality. This 
phase was successfully completed. The bio-fuel produced in this initial 
test met design specification required to move forward with the final 
verification phase.
    The current Technology Verification Phase (TVP) is focused on long 
term testing necessary to demonstrate that an integrated biomass 
gasification system can be operated successfully. This is a must for 
the market to accept the technology for commercial application. 
Invaluable performance date, critical to the continued evolution of 
this technology, will be obtained and evaluated in depth. Discussions 
are currently under way with HC&S to adapt the BGF to utilize the 
product bio-fuel in a gas turbine to produce electricity. WEC has 
estimated that this integrated technology has the potential to improve 
the biomass power plant efficiency to 2 to 3 times above today's 
conventional technology.
    Future plans for the DOE technology development program at the 
Hawaii BGF include the addition of facilities to enable production of 
bio-fuel for application with fuel cell technology for electricity 
production. The use of molten carbonate fuel cell technology will 
provide important applied research toward the production of clean, high 
efficiency, environmentally-benign energy production, with widespread 
application. Because molten carbonate fuel cells represent the optimum 
technology for converting hydrogen energy to electricity, this phase of 
the BGF development program will demonstrate the integration of biomass 
gasification and fuel cell technologies by operating an advanced 
generation 50-kilowatt test scale molten carbonate fuel cell, using 
hydrogen from the gasifier's output as fuel. In order to leverage 
maximum value from federal and cost-sharing investments, the current 
biomass gasifier in Hawaii would serve as the most cost-effective 
demonstration site.
    IGT requests this subcommittee's support for the continued 
development of this project, which will have major implications for 
Hawaii's energy policy, as well as other nation-and world-wide 
applications. Total funding for the molten carbonate fuel cell phase of 
this project over the next two fiscal years is estimated at 
$10,000,000. Of that total, the State of Hawaii and the Hawaii BGF 
project's industrial partners will provide $4,000,000. The proposed 
federal share will be $3,000,000 in fiscal year 1998 and $3,000,000 in 
fiscal year 1999, and IGT urges this subcommittee to dedicate 
sufficient funds to DOE's Biopower Energy Systems--Utilities Systems 
Development program to support these Hawaii BGF developments.
    The second major biomass gasification project in which IGT is 
involved is the Minnesota Agri-Power Project (MAPP), one of four 
competitively selected, cost-shared projects supported jointly by DOE 
and the U.S. Department of Agriculture through the Biomass Power for 
Rural Development Initiative.
    The Minnesota project will be an efficient, utility-scale 75 
megawatt power plant producing steam and electricity, through a 
combustion turbine, from the bio-fuel produced by gasifying the alfalfa 
stems from an alfalfa processing facility. The alfalfa processing 
facility will handle nearly 700,000 tons of locally-grown alfalfa per 
year, producing over 300,000 tons of animal feed from the alfalfa 
leaves. Through the MAPP project, the stems from the alfalfa plant, 
however, will now be converted into an additional economic stream for 
the operation, adding significant value to the local economy and 
serving as a model for similar renewable opportunity feedstocks or 
dedicated energy crop usage in many rural areas of the United States.
    The DOE fiscal year 1998 request for the Biomass Power for Rural 
Development Initiative has increased by $10.767 million over the fiscal 
year 1997 appropriation for this line item, reflecting the funding 
necessary to move all four current projects ahead on schedule. IGT 
urges the subcommittee's support for the full DOE request in this area.
Hydrogen programs:
    IGT has a long history in hydrogen-related research and 
development, working in the full range of areas from cost-effective 
hydrogen production, to safe distribution and storage, to clean, 
efficient end uses. We have been pleased to see the recent increased 
hydrogen research funding supported by this subcommittee and by the 
Congress, and are pleased to see that the fiscal year 1998 request by 
DOE has now matched the fiscal year 1997 appropriated level.
    IGT strongly supports the general balance and direction of the DOE 
program, but asks the Congress to once again allocate more money for 
fiscal year 1998 hydrogen research than the DOE has recommended. We 
urge this subcommittee to appropriate an additional $5 million above 
the DOE request.
    One area of the current DOE hydrogen research funding is supporting 
what are known as Phase I activities, identifying technological, 
economic or market issues related to the increased, economical use of 
hydrogen to meet our nation's energy needs. Nine competitively 
selected, cost-shared projects are currently underway or under 
negotiation with DOE, conducting studies in near-term hydrogen 
opportunities, biomass gasification, and hydrogen filling stations.
    IGT is part of a team that is currently negotiating one of those 
Phase I awards with DOE. The proposal seeks to take advantage of our 
combined experience in biomass gasification, hydrogen production and 
fuel cell development. The objective of this Phase I feasibility study 
is to develop a clear understanding of the technical, economic and 
market issues that need to be resolved to ensure success of an 
integrated biomass gasification and molten carbonate fuel cell system. 
Much of the information developed through this study will help enhance 
and leverage the early application of both the hydrogen to electric 
power research in the DOE Hydrogen program, and the biomass to electric 
power program currently underway in the DOE Biopower/Biofuels program. 
The Phase I study will be applicable to multiple biomass feedstocks and 
hydrogen-to-power technologies.
    Phase II of the current DOE program will move on from the 
successful results of the Phase I studies to begin to find workable 
solutions to the problems or issues that have been identified. Because 
the implementation of Phase II solutions for any project will generally 
be more costly than the Phase I study, IGT's recommendation of an 
additional $5 million for fiscal year 1998 above the DOE request will 
allow DOE to advance more successful Phase I projects into Phase II 
developments, as well as sustain a strong basic and applied research 
program, continuing to build the DOE hydrogen research program in a 
steady manner that will allow DOE to take full advantage of its early 
successes in hydrogen research.
                                 ______
                                 
   Prepared Statement of Robert L. McCrory, Professor and Director, 
        Laboratory for Laser Energetics, University of Rochester
Summary and Requested Action
    The Department of Energy's (DOE) Defense Programs' strategy relies 
on maintaining the technology infrastructure and core competencies to 
insure that the U. S. nuclear deterrent is credible while contributing 
to the U. S. research base. The National Inertial Confinement Fusion 
(ICF) program plays a central role in the stockpile stewardship 
technology program with the threefold laboratory mission: (1) To 
demonstrate the ignition of small masses of thermonuclear fuel, (2) To 
provide access to physics regimes of interest in nuclear weapon design 
and thereby generating nuclear-weapons-related physics data, and (3) To 
provide an above-ground simulation capability for nuclear weapons 
studies and effects. With cessation of underground nuclear tests and 
contraction of the nuclear weapons research and development effort, ICF 
is a vital component of the DOE's technology-based stockpile 
stewardship program. A potential long-term secondary benefit is that 
ICF could provide a source of environmentally acceptable and 
economically competitive civilian power.
    The University of Rochester's Laboratory for Laser Energetics 
(LLE), a participant in ICF research since the 1970s, is the only ICF 
program that has been jointly supported by the Federal government, 
State government, industry, utilities, and a university. At relatively 
small comparative cost to the government, LLE makes fundamental 
contributions to the National program and transfers technology to the 
public and private sectors through the training of graduate students 
and interactions with industry and other Federal laboratories. The 
Laboratory serves as a National laser users' facility benefiting 
scientists throughout the country. The OMEGA laser located there is now 
the highest power ultraviolet fusion laser in the world.
    The Laboratory's prime mission is to validate the direct-drive 
option for ICF. There is a close collaboration among LLE, Lawrence 
Livermore National Laboratory (LLNL), and Los Alamos National 
Laboratory (LANL) to support the demonstration of ignition and gain in 
the laboratory, the objective set by the National Academy of Sciences' 
(NAS) review of the National program in 1990. During fiscal year 1997 
LANL, LLNL, and LLE conducted joint experiments on Omega, both for 
direct and indirect drive.
    Reviews of the Rochester program by the NAS and the Inertial 
Confinement Fusion Advisory Committee (ICFAC) recommended the OMEGA 
Upgrade and evaluated the potential of direct drive as high priority in 
the National program. The OMEGA Upgrade, completed on time and on 
budget ($61,000,000) in fiscal year 1996, exceeded all acceptance test 
criteria (45,000 Joules of ultraviolet light--50 percent above the 
30,000 Joule design specification!). OMEGA, the newest Defense 
Programs' facility, established a new neutron yield record of 100 
trillion neutrons. OMEGA is the only facility that can demonstrate the 
scientific potential of direct drive to provide a modest-to high-gain 
energy option for the Nation. ICFAC \1\ emphasized the priority of 
conducting cryogenic experiments on OMEGA by fiscal year 1999. During 
construction of the National Ignition Facility (NIF), OMEGA will be the 
principal ICF facility in the National program for ICF-based stockpile 
stewardship experiments. The funding profile in the Cooperative 
Agreement proposal for the LLE program for operation of the new 
facility is shown in the table below.
---------------------------------------------------------------------------
    \1\ Inertial Confinement Fusion Advisory Committee Report to 
Assistant Secretary Reis (February 21, 1996).

----------------------------------------------------------------------------------------------------------------
                                                                   Fiscal Year--                                
                                 -------------------------------------------------------------------------------
                                       1998            1999            2000            2001            2002     
----------------------------------------------------------------------------------------------------------------
Operations......................     $24,030,000     $25,458,811     $26,477,163     $27,536,250      $28,637,69
Capital.........................       2,080,000       2,249,200       2,249,728       2,339,717       2,433,306
                                 -------------------------------------------------------------------------------
      Total.....................      26,110,000      27,622,011      28,726,891      29,875,967      31,071,005
----------------------------------------------------------------------------------------------------------------

    To provide the operations support for program deliverables and 
operation of OMEGA, and maintain the training programs at Rochester, a 
total authorization and appropriation of $26,110,000 ($24,030,000 for 
operations and $2,080,000 for capital equipment replacement and 
modernization) is requested for the University of Rochester for fiscal 
year 1998.
Background
    Thermonuclear fusion is the process by which nuclei of low atomic 
weights, such as hydrogen, combine to form higher atomic weight nuclei 
such as helium. In this process some of the mass of the original nuclei 
is lost and transformed to energy in the form of high-energy particles. 
Energy from fusion reactions is the most basic form of energy in the 
universe; our sun and all other stars produce energy by thermonuclear 
fusion reactions occurring in their interior. Fusion is also the 
process that provides the vast destructive power of thermonuclear 
weapons.
    To initiate fusion reactions, the fuel must be heated to tens of 
millions of degrees. In stellar bodies, containment is possible because 
of the large gravitational force. On earth, ICF involves the heating 
and compression of fusion fuel by the action of intense laser or 
particle beam drivers. There are two approaches to ICF, direct and 
indirect drive: indirect drive involves the conversion of beam energy 
to x-rays to compress a fuel capsule in an enclosure called a hohlraum; 
direct drive involves the direct irradiation of a spherical fuel 
capsule by energy from a laser and may be more efficient energetically 
than indirect drive. For either approach, if very extreme density and 
temperature conditions are produced, it is possible to produce many 
times more energy in these fusion reactions than the energy provided by 
the drivers.
Inertial Confinement Fusion Program Focus
    The 1990 NAS review of the ICF program \2\ identified the program 
priorities that were subsequently endorsed and are being pursued by the 
DOE. The NAS report states ``The expeditious demonstration of ignition 
and gain should be the highest priority of the inertial confinement 
fusion (ICF) program. Adequate funding toward this goal must be 
assured.''
---------------------------------------------------------------------------
    \2\ Review of the Department of Energy's Inertial Confinement 
Fusion Program Final Report (National Academy Press, Washington, DC, 
1990).
---------------------------------------------------------------------------
    The NAS report identified the glass laser program as the best path 
to demonstrate ignition (initiation of a thermonuclear reaction that 
can be self-sustaining) and propagating thermonuclear burn. A recent 
independent review completed by the JASONS \3\ stated ``The inertial 
fusion program represents the closest approach we know of to a number 
of critical parameters in the weapon environment Naturally we expect 
continued progress in further evaluating ignition prospects from 
experiments on Nova and on OMEGA Upgrade, a direct-drive laser facility 
at the University of Rochester.''
---------------------------------------------------------------------------
    \3\ ``Science Based Stockpile Stewardship,'' JASON Report JSR-94-
345 (The MITRE Corporation, McLean, VA, November 1994).
---------------------------------------------------------------------------
    DOE has accepted the recommendations of the reviews, and 
substantial progress has been made. Outstanding results from indirectly 
driven targets on the NOVA facility at LLNL have been obtained, and the 
NOVA Technical Contract, an experimental and theoretical program 
designed to resolve potential areas of risk on the NIF has been 
essentially completed satisfactorily. The preliminary design phase for 
the NIF has been completed. The purpose of the NIF is to demonstrate 
ignition, propagating burn, and modest gain in the laboratory. The NIF 
project completion is projected to be 2003. As the detailed design of 
NIF is completed, and construction begun for the NIF, OMEGA will be the 
principal ICF facility that can be used for stockpile stewardship 
experiments by LLNL and LANL, and for direct-and indirect-drive ICF 
experiments as NOVA is phased out.
    LLE is the primary focus in the U. S. for the direct-drive approach 
to ICF. The NAS report states that direct drive may ultimately prove to 
be the best approach to ICF and provide the most efficient path to a 
laboratory-scale thermonuclear capability for both energy research and 
defense technology needs. OMEGA is the only facility that can 
demonstrate the scientific potential of direct drive to provide modest-
to high-gain on the NIF.
    For several years an extensive collaborative program between LLNL, 
LANL, and LLE has provided data on basic physics, beam smoothing, and 
unstable hydrodynamics using available laser facilities, such as NOVA. 
This collaboration is continuing on OMEGA. The joint effort includes 
both nuclear weapons physics experiments and ICF experiments. Physics 
issues for both ICF and weapons issues for the stockpile stewardship 
program fall into five broad categories: irradiation uniformity, laser 
energy coupling and transport, laser-plasma interaction physics, 
hydrodynamic stability, and hot-spot and main-fuel-layer physics. The 
OMEGA and NIF programs are complementary. Figure 1 illustrates the 
schedule for the glass laser facilities to be used in the National 
program plan for inertial fusion, and shows the phased availability 
plan for the NIF.
[GRAPHIC] [TIFF OMITTED] TERNS.004

   Figure 1.--Schedule for the operation of NOVA, OMEGA, and the NIF

    The figure illustrates how the National program has been structured 
to provide a full complement of mature experimental facilities from the 
present to the future. If the NIF adheres to DOE's present schedule, 
construction of NIF with a shut down of the NOVA laser in fiscal year 
1999, leaves OMEGA as the principal facility to continue experimental 
work during the final phases of NIF construction. Although the LLE 
program is focused on direct drive, OMEGA is capable of indirect drive 
(hohlraum) experiments. Beginning with fiscal year 1996, both LANL and 
LLNL use the indirect-drive capabilities of OMEGA.
The LLE Program for Fiscal Year 1998
    The goal of the glass laser direct-drive target physics program is 
to evaluate the performance of capsules near ignition conditions. In 
addition to providing data for the NIF, experiments can validate the 
direct-drive configuration on the NIF that could result in two to three 
times higher fusion gains (gain > 50) than those available with the 
baseline (indirect drive) NIF design.
    An important element of the direct-drive program on OMEGA is to 
demonstrate beam smoothing techniques that ultimately will produce on-
target irradiation nonuniformity of 1 percent to 2 percent. 
Polarization rotator plates will be used during fiscal year 1998 to 
improve the uniformity of irradiation with OMEGA. In fiscal year 1998 
advanced diagnostics for hydrodynamically equivalent capsule implosions 
will be implemented, including a neutron imaging system implemented in 
collaboration with LLNL. OMEGA will support advanced diagnostics 
development for NIF. Experiments on planar foil targets are required to 
measure the Rayleigh-Taylor growth rates under conditions relevant to 
NIF targets. By comparing the results of these experiments to 
hydrodynamic code calculations, the reliability of the NIF capsule 
designs can be validated with a commensurate reduction in the risk.
    The development of cryogenic fueling is necessary for the post-
NOVA-technical-contract ignition optimization experiments as well as 
for the hydrodynamically equivalent target experiments to be conducted 
on OMEGA. In collaboration with LANL and General Atomics, a prototype 
cryogenic capability is to be completed in fiscal year 1999 for OMEGA. 
Work in the target development area will continue with the goal of 
conducting the first cryogenic surrogate target experiments during 
fiscal year 1997 and fiscal year 1998, with the first fully cryogenic 
capsule experiments planned for OMEGA in fiscal year 2000. The ICFAC 
recommended in their final report: ``The committee believes that 
experiments are essential to assessing real target performance and 
benchmarking code calculations. The first opportunity to do such 
experiments on cryogenic targets approaching NIF size will be on Omega 
It is very important that this effort be kept on track with proper 
priority and not delayed further.'' \1\ Cryogenic capability, advanced 
diagnostics development, and beam smoothing are all required for the 
NIF. LLE will be the principal National facility to develop these 
technologies for the program.
---------------------------------------------------------------------------
    \1\ Inertial Confinement Fusion Advisory Committee Report to 
Assistant Secretary Reis (February 21, 1996).
---------------------------------------------------------------------------
    LLE attaches a high priority to providing education and training in 
the field of ICF and related area, thereby providing a source of 
personnel and expertise in areas of critical National needs. These 
include theoretical and experimental plasma physics, laser-matter 
interaction physics, high-energy-density physics, x-ray and atomic 
physics, ultrafast optoelectronics, high-power laser development and 
applications, nonlinear optics, optical materials, and optical 
fabrication technology. A total of 56 graduate students and 14 faculty 
members of the University of Rochester are currently involved in the 
unique research environment provided at LLE and represent many 
departments within the University, including Mechanical Engineering, 
the Institute of Optics, Physics and Astronomy, Electrical Engineering, 
and Chemical Engineering. More than 50 undergraduate students receive 
research experience annually at LLE. A high-school summer science 
program exposes ten talented students each year to the research 
environment and encourages them to consider careers in science and 
engineering. Many LLE graduates have made important scientific 
contributions in National laboratories, universities, and industrial 
research centers.
                                 ______
                                 
 Prepared Statement of David K. Wehe, Professor, University of Michigan
    The U.S. Department of Energy (DOE) has provided support to the DOE 
University Research Program in Robotics during the period fiscal year 
1987-fiscal year 1997 to pursue long range research leading to the:
    ``development and deployment of advanced robotic systems capable of 
reducing human exposure to hazardous environments, and of performing a 
broad spectrum of tasks more efficiently and effectively than utilizing 
humans.''
    The DOE University Research Program in Robotics (URPR) adds the 
important element of committed university research to the Robotics 
Technology Development Program (RTDP) within the DOE EM's Office of 
Technology Development (OTD). The integration of the DOE University 
Program in Robotics into RTDP, through collaboration with the DOE 
national laboratories, has strengthened RTDP, and has provided an 
avenue for the results of university research to find direct 
applications in problems of vital interest to DOE. The URPR would like 
to thank the committee members for their historically strong support of 
this successful program.
    Request for the Committee.--We request that the committee allocate 
$4 million of ER&WM (EM) nondefense research funds to continue the 
University Research Program in Robotics (URPR) efforts toward the 
development of safer, less expensive, and more efficient robotic 
technology for environmental restoration and waste management problems.
Developing Advanced Robotics for DOE
    Develop robotic solutions for work in hazardous environments and 
facilitate cleanup operations.--The goal of this program is to utilize 
and advance state-of-the-art robotic technology in order to remove 
humans from potentially hazardous environments and expedite cleanup 
efforts. Established by DOE in fiscal year 1987, the project has 
continued to build upon an impressive array of technological 
innovations which have been incorporated into robotic solutions being 
employed across federal and commercial sectors. This program has 
reached an efficient state of technology innovation and is immersed in 
efficiently educating needed technologists and inventing our country's 
intelligent mobile machine technology of the next century while meeting 
today's technology needs for DOE.
Core Values
    The URPR's strategic mission is to make significant advances in our 
nation's robotic and manufacturing technology base in three core areas: 
education, technology innovation through basic R&D, and DOE mission 
support.
    Robotics: A strategic national technology.--R&D funding is the most 
effective use of federal funds to promote the nation's well-being 
according to a recently published poll of academic economists. And, as 
documented in previous testimonies, key national studies (including 
those by the Council on Competitiveness, DOD, and the former OTA 
technology assessment reports) consistently list robotics and advanced 
manufacturing as one of the five most vital strategic technologies for 
government support. Further, the national need for an investment in the 
development of intelligent mobile machines has been universally 
recognized.
    Over the years in which the URPR has been in existence, our 
nation's rated competitive strength in this technology area has 
dramatically improved. Through the production of advanced students and 
technology, the program has enhanced our long-range international 
industrial competitiveness. This is seen in the commercial products 
which have evolved from innovations born during this work, the role of 
the graduates of this project in manufacturing, environmental, and 
educational programs throughout the country, and the direct 
applicability of this work to both DOE's EM needs and national 
manufacturing programs.
    This progress, if allowed to continue, will position our country as 
the dominant leader in this competitive international industry. The 
long-range implications of intelligent mobile machines which can assist 
humans to perform life tasks are clearly significant.
    URPR: A Paradigm that Works.--For the past few years, the URPR 
funding has remained constant while its productivity has increased. 
Funding is normally allocated by the DOE Program Manager based upon the 
results of a thorough review of technical accomplishments by a 
committee of national laboratory advisors, and the anticipated DOE 
technology needs for the next year. The URPR has consistently received 
the highest ranking for providing outstanding technical contributions 
and value by national laboratory reviewers and DOE Program Managers. 
The success of this program is based upon several factors: (i) 
sustained commitment to this program has enabled the development of a 
world-class group of technology innovators, (ii) the consistent 
partitioning of tasks among the university participants has enabled 
focussed concentrations of expertise to naturally evolve, and (iii) the 
strong partnerships which have developed between the universities, 
labs, and industries have allowed innovations to move freely between 
institutions and yielded complete, demonstrable solutions to technology 
problems. The URPR has demonstrated that this is a paradigm for success 
in its three core mission areas: Education, Innovation, and DOE Mission 
Support.
    Educating 21st Century Technologists.--The URPR has educated about 
320 advanced degree students in the critical engineering fields, 
including many with awarded doctoral degrees. These students have now 
entered the work force, and are contributing to an industrial 
resurgence based on intelligent machines and advanced manufacturing 
technology. Graduates from this project have built successful startup 
companies and industrial technology transfers in computer vision (MI, 
TN) and medical imaging (MI), video databases (CA), and intelligent 
manufacturing (MI, FL, TX). We have seen a consistently strong demand 
for graduates educated through this project. Society has benefited from 
students educated in vital technology areas at substantially lower cost 
than using federally-funded fellowships.
    DOE Mission Contribution--Environmental Cleanup.--The motives for 
undertaking a comprehensive research effort in the application of 
advanced robotics to EM tasks in hazardous environments reflect both 
economic considerations and health and safety concerns. As part of 
RTDP, the URPR is contributing to minimizing risks to human health, 
enhancing workers safety, reducing secondary waste, and improving the 
environment. The URPR supports needs-driven applied research to develop 
innovative and synergistic technologies in support of EM thrust areas.
    During fiscal year 1996, the URPR projects successfully supported 
the:
  --deployment and testing of SWAMI, an autonomous inspection robot for 
        Fernald,
  --design, construction and testing of a robot which can precisely map 
        large DOE facilities, such as K-25, in preparation for 
        decontamination and decommissioning (D&D),
  --delivery of a robotic handling system for an automated chemical and 
        radiological analysis system, and
  --dismantlement of the ANL nuclear reactor CP-5 using ROSIE, a large 
        mobile robot with two 7 degree of freedom arms for heavy-duty 
        manipulation, and
  --remote radiation mapping of the MSRE facility at ORNL prior to D&D.
    During fiscal year 1997, the URPR continues to support the mainline 
projects of DOE's EM efforts. These successes have led to increased 
demands on the URPR, including:
  --Re-engineering MACS, a DOE mapping robot needing more autonomous 
        capabilities to be useful in the field,
  --Remote plutonium processing projects,
  --On-site radiation imaging at K-25 and MSRE to characterize 
        radioactive deposits,
  --Accelerated development of the Mobile Mapper robot for large-
        facility mapping tasks.
    As shown above, these efforts are directly linked to cleanup 
operations in the DOE complex. During fiscal year 1998, the URPR plans 
to continue its focussed efforts on DOE field cleanup applications, 
while maintaining our commitment to basic research and education.
    Innovation--the cornerstone of future technology.--The URPR has 
produced prodigious levels of innovation in research and development. 
While current demonstrations reveal next-generation technologies, even 
more advanced capabilities continue to emerge from the laboratories. 
These include new types of locomotion, navigation techniques, sensing 
modalities (radiation cameras and laser imaging devices), 
environmentally hardened components, and dextrous manipulators. These 
new machines have an unparalleled man-machine interface and inherent 
intelligence, with the capability of being able to integrate many 
diverse sensors simultaneously. These devices will become or inspire 
the intelligent machines of the future, including smart automobiles and 
obstacle avoidance aids for the disabled.
    This innovation can also be seen in the following statistics:
  --Approximately 10 patents awarded. At an international Mobile Robots 
        conference, 30 percent of the papers presented cited the 
        fiducial work being performed by the URPR.
  --Over 600 technical papers published in technical journals and 
        conferences.
  --The standard technical books for vision, radiation detection and 
        imaging, and mobile robots were authored by researchers working 
        on this project.
  --A suite of world-class robots (including CARMEL, a winner of the 
        AAAI Mobile Robot Competition) serve as the research testbeds 
        for this project. Our newest innovation, OmniMate, has been 
        commercialized by HelpMate, Inc. and supplied to DOE for 
        autonomous mapping applications in the DOE complex.
    Side Effect: Technology for Corporate America.--In addition to 
research and education, the URPR contributes to technology transfer. 
The URPR's research agenda is determined through interactions with the 
DOE complex. This application-driven research has yielded results, 
which as a side effect, have lead to advancements in the commercial 
sector.
    The list of URPR technology transfer successes include radiation 
imaging cameras which can be purchased commercially from RMD, 
techniques for ultrasonic noise rejection and a multiple degree of 
freedom vehicle which is marketed by HelpMate Inc. In addition, 
technology transfer is in process through joint SBIR grants with small 
businesses (TRC, RMD, Schilling, Bonneville Scientific, REMOTEC), and 
through joint research projects (e.g., RedZone Robotics, Inc.). 
Approximately 50 technology transfers have occurred through this 
project.
    Private industry still lacks the ability to undertake the long-
range R&D programs which lead to these commercial successes. Although 
problem-specific solutions to DOE problems tend to be too narrow for 
broad commercial interests, the URPR is particularly proud of its 
unusual success in transferring university-based innovations into 
viable commercial products, and will continue to pursue this approach 
whenever appropriate.
    Cost Efficient Technology Generation.--National policy has focused 
on economic growth and world leadership in science and technology. In 
concert with these thrusts, the URPR efficiently integrates education, 
research, and technology transfer in a natural and effective way. By 
integrating DOE needs with research, education, and technology transfer 
as a continuous project process, a new and cost-effective paradigm for 
DOE programs is being proven.
Program Request
    During fiscal year 1997, the URPR provided vital contributions to 
education and research while meeting DOE technology needs. The 
motivation for this project remains steadfast--removing humans from 
hazardous environments while enhancing safety, reducing costs, and 
increasing productivity. The URPR's position and mission are unique, 
and continued Congressional support is necessary to ensure the 
continuation of this highly successful program.
    Request for the Committee.--To continue this vital program, we 
request that the Committee include the following language into the 
Fiscal Year 1998 Energy and Water Appropriations Bill:
  --The committee allocates $4 million of ER&WM (EM) nondefense 
        research funds to continue the University Research Program in 
        Robotics (URPR) efforts toward the development of safer, less 
        expensive, and more efficient robotic technology for 
        environmental restoration and waste management problems.
                                 ______
                                 
Prepared Statement of Dr. Raymond E. Bye, Jr., Associate Vice President 
                 for Research, Florida State University
    Mr. Chairman, thank you and the Members of the Subcommittee for 
this opportunity to present testimony before your Subcommittee. I would 
like to take a moment to acquaint you with Florida State University. 
Located in the state capitol of Tallahassee, we have been a university 
since 1950; prior to that, we had a long and proud history as a 
seminary, a college, and a women's college. While widely-known for our 
athletics teams, we have a rapidly-emerging reputation as one of the 
Nation's top public universities. Having been designated as a Carnagie 
Research I University several years ago, Florida State University 
currently exceeds $100 million per year in research expenditures. With 
no agricultural nor medical school, few institutions can boast of that 
kind of success. We are strong in both the sciences and the arts. We 
have high quality students; we rank in the top 25 among U.S. colleges 
and universities in attracting National Merit Scholars. Our scientists 
and engineers do excellent research, and they work closely with 
industry to commercialize those results. Florida State ranks seventh 
this year among all U.S. universities in royalties collected from its 
patents and licenses. In short, Florida State University is an exciting 
and rapidly-changing institution.
    Mr. Chairman, one of the most exciting activities at Florida State 
University is the presence of the National High Magnetic Field 
Laboratory, located in Tallahassee. This Laboratory is a unique and 
effective partnership between the State of Florida and the federal 
government. The Laboratory is a consortium of three entities--the 
Florida State University, the University of Florida, and Los Alamos 
National Laboratory (LANL). The majority of funding comes from the 
National Science Foundation, and that funding and the partnerships 
involved in the Laboratory combine to make this a truly remarkable 
world-class facility. With state-of-the-art instrumentation and some of 
the best minds available anywhere, this facility is providing new 
capabilities to analyze difficult problems, separate minuscule 
materials through magnetic applications, and develop new and 
commercially-viable materials. This NHMFL offers us new tools to do 
research never done before and do it in ways never possible previously. 
One such example will be discussed briefly. I did wish to thank and 
commend this Committee for its support of activities like the NHMFL 
through its support of LANL, and specifically its 100 tesla project. 
Your support--and the LANL partnership--is very important to us and to 
this important effort.
    Mr. Chairman, I would now like to take a moment and describe for 
the Committee an effort that could greatly increase the future 
effectiveness of environmental restoration activities as undertaken by 
the U.S. Army Corps of Engineers (USACE). As you know, wetlands serve 
several important functions including the provision of support and 
habitat for a wide range of flora and fauna, as well as influencing the 
flow and quality of water. Starting in 1998, the USACE will begin the 
restoration of the Kissimmee River and its wetland floodplain by 
backfilling the canal, dug for flood control, and to improve 
navigability, with previously excavated dike material. This is the 
first large-scale wetlands restoration project to be undertaken by the 
USACE. It is anticipated that similar restoration projects, associated 
with the ongoing efforts to return much of the South Florida 
ecosystem--including the Everglades--to a semblance of its original 
character, will soon follow. The lessons learned from this Kissimmee 
River restoration project can serve to better restorations in the 
future.
    Specifically, a study led by scientists at Florida State 
University, with colleagues from Florida A&M University assisting in 
the work. In addition, the scientists from South Florida Water 
Management District are involved with the study as well. Feasibility 
studies on the restoration project have been completed and have focused 
on the physical restoration of the hydrological conditions, and on the 
response of the ecosystem to these physical changes. Unfortunately, 
chemical and biological effects associated with the initial physical 
disturbance of the restoration, or the ``first flush'' effect, have not 
been adequately studied. These initial chemical and biological effects 
are not only important in the short term, but also have a profound 
influence on the long-term biological direction that the restored 
ecosystem follows. Understanding and controlling these early processes 
are thus critical in designing restoration projects which are most 
efficient in returning wetlands to their original, ecosystem status.
    The present Kissimmee River restoration scenario is a 
``decanalization'' and return to the original hydrological conditions 
starting at the downstream end and gradually progressing upstream over 
a 10-15 year period. Thus, in the context of the present restoration 
plan, the first areas addressed receive the ``first flush'' of each 
additional restored segment for the entire duration of the restoration 
project. One of the effects of this approach is increased turbidity and 
release of nutrients, organic carbon, and trace metals which will lead 
to profound changes in the fauna and flora downstream of the 
restoration segment. It is known that these south Florida waters are 
highly-enriched with mercury. One key aspect of our study will be to 
focus on measures for such environmental factors.
    This study will focus on this ``first flush'' phenomenon. The 
changes in composition of dissolved organic matter and the 
concentration of metals mobilized due to the restoration will be 
examined, along with the effects of nutrient-loading on the ecosystem. 
By studying the cycling of nutrients and organic matter by microbial 
processes we will be able to develop early indicators of ecosystem 
change. A better understanding of the ``first flush'' phenomenon and 
the development of early indicators of ecosystem health, will provide 
the information required to make more informed, effective, and 
efficient decisions regarding future restoration procedures and thus 
minimization of total costs associated with future restorations.
    Never before has the determination of early indicators of ecosystem 
health been attempted, largely because many of the necessary analytical 
techniques have not previously been available. These new techniques are 
now available at the National High Magnetic Field Laboratory, located 
in Tallahassee, Florida. The availability of a variety of state-of-the-
art analytical tools, now in place at the NHMFL, provides the ability 
to access these analytical procedures at a single facility for the 
first time. The Kissimmee River restoration project provides an ideal 
venue in which to develop efficient and effective approaches to 
wetlands restoration as never before.
    Funding for some portions of this research are being sought through 
support from the U.S. Environmental Protection Agency. The portion of 
the work related to the analysis of the restoration approach by the 
USACE is $1.5 million over three years. This would be an extremely 
cost-effective investment in light of what could be learned and applied 
to future wetland restoration projects to be undertaken by the Corps in 
the future. The ability to separate and analyze many of the organic and 
inorganic components in the ecosystem while learning more about their 
impact on the restoration will be a potential cost-source in future 
restorations.
    Finally, a series of other environmentally-related projects are 
being done with Florida State University scientists from our 
Oceanography Department working closely with Florida A&M University's 
Institute for Environmental Studies on a number of additional 
collaborative projects. Several of these are being proposed for funding 
under the Department of Energy's program of partnering with 
Historically Black Colleges and Universities (HBCU) for research 
activities. As there are several of these collaborative efforts being 
proposed, I will not itemize them here. I would simply add that this 
collaboration between FSU and FAMU is a highly productive one, 
particularly in this environmental area. We commend the Department for 
this program, and we express our appreciation to this committee for it 
support of these efforts.
    Mr. Chairman, in summary, the major environmental assessment 
project on the Kissimmee River that would have us working closely with 
the U.S. Army Corps of Engineers is an extremely important and cost-
effective activity. It will also be a good investment for better 
understanding of this complex restoration phenomenon and for future 
restoration cost savings to the federal taxpayer. We ask for this 
Committee's support of this novel effort that would use new tools that 
would provide information for the Corp to make better decisions in the 
future. I appreciate the opportunity to present these activities to 
your Committee. Thank you.
                                 ______
                                 
Prepared Statement of Michael A. Wayne, Chairman and Donald L. Morton, 
M.D., President, John Wayne Cancer Institute, Saint John's Hospital and 
                    Health Center, Santa Monica, CA
    Mr. Chairman, Senator Reid, and members of the subcommittee, thank 
you for this invaluable opportunity to submit testimony on behalf of 
the John Wayne Cancer Institute at Saint John's Hospital and Health 
Center in Santa Monica, California, regarding our support for the 
federal government's activities related to nuclear medicine. I am 
grateful for the opportunity to convey to the subcommittee, through our 
work in this area, how these activities have translated into major 
breakthroughs in the diagnosis and treatment of cancer patients. It is 
our hope that this testimony will encourage increased federal 
participation at a critical juncture in the development of nuclear 
medicine in the fight against cancer.
    Many of the important innovations in medicine today have been 
guided by improvements in imaging cancers at various stages of the 
disease process with the support of the Department of Energy (DOE). 
From a small research enterprise funded by DOE, nuclear medicine has 
grown into a multibillion dollar health industry and holds greater than 
ever promise in the diagnosis and treatment of cancer. Molecular 
biology has greatly enhanced utilization of nuclear medicine imaging 
and will ultimately result in radioisotope therapy. At John Wayne 
Cancer Institute (JWCI) we have worked extensively in these areas with 
astonishing results. Developments in immunology and molecular biology 
are allowing us to target radioisotopes to sites of disease in order to 
diagnose and treat cancers not possible by conventional methods.
    For example, our extensive work in immunological research has made 
us the largest immunotherapy program in the world with projects aimed 
at the development of a melanoma vaccine, anti-melanoma human 
monoclonal antibodies and combining chemotherapy and molecular 
biotherapy (chemobiotherapy). JWCI has the only human monoclonal 
antibody program which has induced complete clinical remissions in 
melanoma patients. We are currently nearing the final phase of the 
development and trial of an irradiated melanoma vaccine. The results 
have been extremely encouraging--prolonging survival rates by 
approximately three fold.
    At JWCI, more research in immunotherapy has been directed toward 
melanoma than any other cancer because melanoma is one of the most 
immunogenic tumors. Thus, melanoma is the ideal model system for the 
development of immunotherapy and the lessons learned may be applied to 
novel therapeutic approaches in other tumors, such as breast, colon and 
prostate cancer. JWCI is currently the largest melanoma center in the 
U.S. and the second largest in the world. The melanoma vaccine program 
is the largest immunotherapy program in the world with over 850 
patients participating in a number of Phase II clinical protocols. 
These patients come to JWCI from 32 foreign countries, all 50 states 
and the District of Columbia. Thus, we are a national and international 
resource that serves the nation and the world. Not only do patients 
directly benefit from treatment received at JWCI but also cancer 
patients everywhere benefit from the new technology developed here that 
is shared with the world.
    The JWCI developed the sentinel node technique, which uses a blue 
dye to detect cancer in the first lymph node to receive metastasis from 
the tumor. If the ``blue node'' does not contain tumor, patients avoid 
a major operation and complications resulting from removing all the 
lymph nodes. This technique was first applied to melanoma patients and 
now has been translated to patients with breast, colon, and thyroid 
cancer. This procedure has been greatly enhanced by injecting 
radioisotopes around the tumor and using a geiger counter in the 
operating room to find the ``blue node.'' The precise detection 
provided by our physicians in nuclear medicine has greatly impacted the 
surgical treatment of lymph nodes in cancer patients.
    Our efforts in nuclear medicine are exceptional because our major 
strength is translational research--the process of taking important 
discoveries from the laboratory, refining and developing them to apply 
in the clinic. Translational research has the tremendous potential to 
immediately impact diagnosis and treatment of cancer patients. In all 
fields but cancer, pre-clinical and clinical drug development is 
undertaken by the pharmaceutical industry. Although cancer as a whole 
is very common, there are so many different types and manifestations 
that the market size for individual new therapies is often commercially 
unattractive. Drug development is therefore high risk and only viable 
for pharmaceutical companies if the payoff is high. Consequently, new 
drug therapies with tremendous potential in treating cancer are at risk 
of never being fully developed. Novel cancer drugs can be made 
commercially attractive if the risk in development is correspondingly 
lowered.
    This is an area in which JWCI plays a major role--testing new 
therapies up to the stage where it can be regarded as commercially 
attractive. This is very costly; a typical course of monoclonal 
antibody costs $35,000. Despite the costs to JWCI, our success in these 
areas have lead to our clinical melanoma vaccine program being the 
largest in the world with experience extending back 20 years and 
culminating in the largest tissue and serum bank for melanoma and a 
corresponding database of patient information. As a result of 
developing new therapies at the JWCI, patients throughout the United 
States and in many foreign countries are now benefiting from this 
effort. Further, our on-site dedicated facility is designed to meet 
federal standards for biologics manufacturing and a team skilled in 
FDA's code of manufacturing regulations.
    John Wayne Cancer Institute welcomes an opportunity to form a 
partnership with the Department of Energy to foster the development of 
radiopharmaceuticals and nuclear diagnostic imaging and therapeutic 
products for the detection and treatment of cancer. We are currently 
evaluating the kinetics of radiopharmaceuticals, imaged by innovative 
modalities (i.e., PET-Scan-positron emission tomography) in the nuclear 
medicine suite, to determine their ability to precisely localize and 
detect tumor in melanoma, breast, colon and prostate cancer patients. 
JWCI has established the role and is further developing pre-operative 
lymphoscintigraphy (LS) to identify potential sites of metastasis of 
tumor. We have one of the largest patient accruals in the United States 
for detecting tumor by the PET-Scan. We are also developing innovative 
techniques by using radiopharmaceuticals in the operating room to 
enhance removal of tumor from cancer patients that are not detectable 
by conventional methods. The ability to localize radiopharmaceuticals 
not only improves the detection of cancer, but also impacts treatment 
by the surgical removal and the delivery of innovative treatments 
targeted against these cancer cells.
    As part of the Saint John's Hospital and Health Center, JWCI has 
been an important component of the health care system in the Los 
Angeles area and is the largest employer in Santa Monica. The research 
and clinical reputation of the Institute, however, reaches far beyond 
our region. The Institute currently attracts patients from all 50 
states and over 32 foreign countries. JWCI is the headquarters of a 
National Cancer Institute sponsored ``Multicenter Selective 
Lymphadectomy Trial'' (MSLT) on the use of the ``blue node'' technique 
in melanoma. Participants in this trial include prestigious cancer 
centers across the country and around the world.
    Our reach and effectiveness has remained outstanding despite the 
devastation of Saint John's Hospital in the 1994 Northridge earthquake. 
Saint John's is currently rebuilding, with assistance from FEMA, a 
state-of-the-art health care complex. Saint John's has been fundraising 
non-stop to match the FEMA funds to accomplish this. During this 
period, JWCI has continued to have a dramatic impact on cancer care and 
treatment both regionally and nationally but we are now at a critical 
juncture. Now, at a very important stage of JWCI nuclear medicine 
research we have not been able to draw as extensively upon the 
resources of Saint John's Hospital and Health Center. At the same time, 
the demand for treatment continues to increase exponentially. In order 
to meet this demand, we have been put into the position of losing 
momentum in the discovery of cures for cancer. Maintaining health care 
services for our community is paramount; but our research capabilities 
have even greater national reach and long-term value. Our reputation 
has allowed us to do our own extensive fundraising, achieving a 41.2 
percent increase in donations over last year, but additional assistance 
is imperative.
    We feel strongly that the Department of Energy's medical 
applications program must be enhanced to maintain nuclear medicine's 
capabilities in this exciting era of oncology breakthroughs. John Wayne 
Cancer Institute, in partnership with DOE, would be able to provide a 
unique opportunity, through translational research, for the advanced 
development of radiopharmaceuticals, nuclear diagnostic imaging 
technologies, and therapeutic products for the detection and treatment 
of cancer. A federal partnership investment of $10 million to support 
laboratory construction and renovation needs associated with the 
expansion of laboratory space and in-patient and out-patient treatment 
facilities, and program and equipment needs for nuclear medicine 
programs, would result in a substantial acceleration of the most 
uniquely comprehensive oncology programs in the country utilizing 
nuclear medicine. Economically speaking, the combined efforts of JWCI 
and the DOE can lead to commercialization of radiopharmaceuticals, 
innovative diagnosis and cures for cancer through nuclear medicine and 
serve as a prime example of the fostering of industry growth and 
medical breakthroughs from federally funded research and development.
    Thank you.
                                 ______
                                 
Prepared Statement of Joe L. Mauderly, Senior Scientist and Director of 
     External Affairs, the Lovelace Respiratory Research Institute
    It is proposed that the U.S. Department of Energy play a 
participatory role in an interagency effort to establish and maintain a 
National Environmental Respiratory Center for the purpose of 
integrating research and information transfer concerning health risks 
of breathing airborne contaminants in the environment. The Department's 
support of the Center's research is requested, along with support from 
other Agencies, to fulfill its mandate for incorporating concerns for 
health risks from energy technologies in the development of national 
energy strategy.
              the environmental respiratory health dilemma
U.S. Health Burden of Respiratory Disease
    The magnitude of the national health burden caused by respiratory 
diseases is not widely appreciated. These diseases now kill one out of 
four Americans. Among cancers, the second leading cause of death, lung 
cancer is the single largest killer. Nearly 195 thousand new cases of 
respiratory tract cancer will be diagnosed this year, and 166 thousand 
Americans will die from these cancers. Lung cancer kills more than 
twice as many women as breast cancer, and more than twice as many men 
as prostate cancer. Pneumonia and heart-lung failure are the terminal 
conditions for many of our elderly. Excluding cancer, chronic 
respiratory diseases and pneumonia are the third leading cause of death 
in the U.S., killing over 188 thousand Americans in 1995. Asthma, 
growing unaccountably in recent decades, now afflicts 15 million 
Americans, including 5 million children. The incidence of asthma 
increased 61 percent between 1982 and 1994, and asthma deaths among 
children nearly doubled between 1980 and 1993. Viral respiratory 
infections are the most common cause of hospitalization of infants and 
cause a tremendous loss of productivity in the adult workforce. 
Occupational lung disease is the number one work-related illness in the 
U.S. in terms of frequency, severity, and degree of ``preventability''. 
Worldwide, three times more people die from tuberculosis than from 
AIDS.
Critical Uncertainties Regarding Contributions of Airborne 
        Environmental Contaminants
    Pollutants inhaled in the environment, workplace, and home are 
known to aggravate asthma and contribute to respiratory illness, but 
the extent of their role in causing respiratory disease is not clear. 
It is known that it is possible for airborne irritants, toxins, 
allergens, carcinogens, and infectious agents to cause cancer, 
degenerative disease, and infections directly, or indirectly through 
reduction of normal defenses, but the portion of such diseases caused 
by, or strongly influenced by, pollution is uncertain.
    We are repeatedly faced with estimating the health effects of 
environmental air pollution on the basis of very limited information 
and in the presence of large uncertainty. For example, environmental 
radon gas is estimated to be the second leading cause of lung cancer 
(after smoking), but this estimate comes from our experience with 
uranium mining, in which the exposure conditions and exposed population 
were quite different from those in the general environment. As another 
current example, it is estimated that as many as 40 thousand Americans 
may die annually from breathing particulate environmental air 
pollution, but this estimate comes from epidemiological data that do 
not provide a clear understanding of individuals who were affected, the 
nature and magnitude of their exposure, the biological processes by 
which death might have occurred, or the extent to which the effects of 
particles were independent of other pollutants.
    It is difficult to associate health effects with specific pollutant 
sources. Most environmental air contaminants have multiple sources 
which produce species of overlapping, but slightly different physical-
chemical types. There are few biological markers of exposure which can 
be used to link health effects to past exposures to pollutant classes, 
much less to specific pollutants and sources. This makes it very 
difficult to associate specific pollutant species with specific health 
effects, identify and prioritize the sources whose management would 
most efficiently reduce the effects, and compare potential health gains 
to the financial, technological, and lifestyle commitments required to 
achieve them.
    We presently have little scientific or regulatory ability to deal 
with pollutant mixtures. It is recognized that all exposures to air 
pollutants involve inhalation of complex mixtures of materials, but 
there is very little research on the health effects of mixtures, or the 
significance of interactions among combined or sequential exposures to 
multiple pollutants. Air quality regulations address individual 
contaminants, or contaminant classes, one at a time. We know that 
multiple pollutants can cause common effects, such as inflammation. We 
know that some pollutants can amplify the effects of others. We can 
presume that a mixture of pollutants, each within its acceptable 
concentration, could present an unacceptable aggregate health risk. We 
face the possibility that a pollutant occurring in a mixture might 
wrongly be assigned sole responsibility for a health effect that, in 
fact, results from the mixture or an unrecognized copollutant that 
varies in concert with the accused species. The mixture issue will 
become increasingly important as pollutant levels are pushed ever 
lower, and needs coordinated, interdisciplinary attention.
    As air pollutant levels are reduced, the problems of correctly 
linking health effects to the correct species and sources, and of 
making difficult cost-benefit judgments, will increase. The levels of 
many environmental air contaminants have decreased due to technological 
developments and regulatory pressures. For example, between 1985 and 
1995, concentrations of airborne lead, sulfur dioxide, and carbon 
monoxide in the U.S. decreased 32 percent, 18 percent, and 16 percent, 
respectively, and levels of airborne particulate maker decreased 22 
percent between 1988 and 1995. Levels of ozone and other pollutants 
have also decreased. As background levels are approached, decisions 
regarding: (a) the benefits of further reductions in man-made 
pollution; (b) the need to consider pollutants as a mixture rather than 
as individual species; and (c) the point at which small biological 
changes represent health effects warranting control, will become more 
difficult and will require more focused, coordinated research.
    We are repeatedly faced with estimating effects in particularly 
sensitive or susceptible subpopulations. For example, the proposed new 
National Ambient Air Quality Standards for ozone and particulate matter 
are driven largely by effects thought to occur in exercising asthmatics 
and elderly people with heart-lung disease, respectively. It is seldom 
appropriate to conduct studies in which adverse effects are 
intentionally elicited in the most sensitive people. Until recently, 
there has been little emphasis on developing laboratory animal models 
of human heart-lung conditions thought to render people susceptible to 
pollutants. More emphasis needs to be given to developing and 
validating these research tools, and to coordinating such efforts 
across agencies and research disciplines.
    DOE and other agencies repeatedly faces uncertainties regarding the 
relevance of laboratory results to human health risks. As one of 
several examples, uncertainties about the relevance of the lung tumor 
response of rats to inhaled particles to human lung cancer risk has 
complicated hazard identification and risk assessment activities. Much 
of our understanding of the toxicity of inhaled airborne materials 
comes from studies using animals and cells to identify toxic agents, 
understand biological responses, and determine relationships between 
dose and effect. Such studies produce detailed information on the 
response of animals or cells, but there is too little emphasis on 
ensuring that the responses are similar to those that occur in humans. 
Development of information having little relevance to humans wastes 
resources. The validation of responses of animals and cells used to 
provide the scientific basis for national energy and environmental 
policies needs to be given greater emphasis and coordination.
Lack of Interagency and Interdisciplinary Coordination
    DOE does not have the mandate or resources to resolve all of these 
interrelated issues alone; the resources of other agencies and non-
federal sponsors are critical. Current efforts are funded by DOE and 
other agencies, including EPA, CDC/NIOSH, FDA, DOD, NIH (NHLBI, NIEHS, 
NCI, NIAID, NIDA), and by health advocacy organizations, industry, 
labor, and private foundations. Existing coordinating activities within 
and among these groups do not provide sufficient integration and 
synergism. Progress will require a wide range of laboratory 
researchers, atmospheric scientists, epidemiologists, and clinical 
researchers. Focusing and resolving the issues will require 
interactions among researchers, health care professionals, and policy 
makers in an iterative manner that fosters rapid information transfer 
and development of joint investigative strategies. There is no 
mechanism for national coordination of this interagency and 
interdisciplinary effort. As a result, some efforts are duplicated and 
some important issues are being inadequately addressed. The lack of a 
national center for focusing and facilitating this effort will 
increasingly create inefficiencies and impede progress.
    There is no national center for collecting and disseminating 
information on the health impacts of airborne environmental 
contaminants. Researchers, federal agencies, congress, industry, and 
the public do not have a centralized source of information on ongoing 
research or recent findings.
    There is no designated national interagency user facility with the 
specialized facilities, equipment, core support, and professional 
collaboration required for many types of investigations to study the 
complex airborne materials and health responses of concern. DOE 
provides specialized user facilities, and Investigators seek access to 
these other laboratories on an individual basis, but there is no 
coordinated national effort to facilitate the work of investigators in 
universities, federal laboratories, and industry by identifying and 
providing shared resources or standardized samples.
    DOE and other agencies have intra-agency research centers and 
administrative structures that serve internal programmatic coordination 
needs, but these efforts rarely extend across agency lines. DOE funds 
laboratories and universities, and other agencies also fund extramural 
centers to study, or facilitate the study, of specific issues related 
to environmental respiratory health. For example, EPA's Mickey Leland 
National Urban Air Toxics Research Center funds research and 
information transfer on the class of compounds designated in the Clean 
Air Act as ``air toxics''. The Leland Center serves a useful 
coordinating and research sponsorship function for air toxics, but does 
not have the facility or scientific resources to meet the broader needs 
described above. NIEHS center grants at universities provide core 
support and coordinating functions for thematic collections of projects 
on occupational and environmental health, but again, are not suited to 
meeting the broader needs.
    The lack of a national coordinating center is notable, considering 
its small cost compared to the loss of productivity, the reduction in 
quality of life, and the loss of life caused by respiratory diseases 
and considering the importance now ascribed to the role of 
environmental factors in respiratory disease.
          the national environmental respiratory center (nerc)
Location and Staffing
    The Lovelace Respiratory Research Institute (LRRI) proposes to 
establish a national center to meet the coordinating, user facility, 
and information needs described above. The physical location of the 
NERC will be the government-owned Inhalation Toxicology Research 
Institute facility on Kirtland AFB in Albuquerque, NM. This facility is 
already developed at taxpayer expense, having been established by the 
DOE to conduct research on long-term health risks from inhaled 
radioactive particles. Having fulfilled that mission, the facility was 
recently released from DOE laboratory status, and is now leased by LRRI 
to conduct respiratory health research for federal agencies, industry, 
and private sponsors. This 270,000 square foot, world-class facility 
contains $50 million in government-owned equipment, and has unmatched 
potential as a national user facility. The facility is well-equipped 
and staffed for intramural and collaborative research on airborne 
materials of all types, including reproducing pollutant atmospheres, 
conducting inhalation exposures of animals, determining the dosimetry 
of inhaled materials, and evaluating health effects ranging from subtle 
genetic and biochemical changes to clinical expression of disease.
    The interests and expertise of LRRI are well-matched to the 
proposed activities of the Center. While managing the facility for DOE, 
LRRI contributed heavily to our present understanding of the 
respiratory health impacts of airborne pollutants. LRRI has contributed 
heavily to the research cited as scientific basis for air quality 
regulations and worker protection standards. The group is well-known 
for its efforts to understand airborne materials, link basic cellular 
and tissue responses to the development of disease, validate the human 
relevance of laboratory findings, and coordinate complex 
interdisciplinary studies. The LRRI group has conducted the world's 
most extensive research program on the effects of combined and 
sequential exposures to multiple toxicants. The group is well-known for 
its participation in DOE, NCRP, ICRP and other advisory roles, and for 
coordinating multidisciplinary and interinstitutional efforts.
    LRRI envisions a ``virtual center'' that will also encompass nearby 
institutions and an expanding group of collaborating investigators 
nationwide. Academic affiliation with the University of New Mexico, 
primarily through its Health Sciences Center will extend research and 
training capabilities. Other local technology and collaborative 
resources include Sandia and Los Alamos National Laboratories, the 
National Center for Genome Resources, and the growing New Mexico 
biotechnology and clinical research communities. The NERC would 
interact closely with the Leland Center and with intramural research 
centers within EPA and other agencies.
Principal Functions
    Provide information resources.--The Center will provide centralized 
information resources to researchers, DOE and other agencies, Congress, 
industry, and the public. Literature searches, topical summaries, and 
answers to specific inquiries will be provided via the internet, 
electronic mail, and telephone. Emphasis will be given to providing 
access to relevant information nationwide through a single point of 
contact and assistance.
    Facilitate interagency and interinstitutional coordination.--The 
Center will coordinate meetings, workshops, information transfer, and 
other activities aimed at integrating and prioritizing national 
research efforts and integrating results into useful summaries.
    Provide user facilities and facilitate access to research 
resources.--The Center will disseminate information on the availability 
of specialized facilities, equipment, collaborative resources, and 
samples at the Center and elsewhere, and will facilitate the use of 
these resources by researchers in other institutions.
    Provide training.--The Center will provide graduate training 
through the Toxicology, Biomedical, and Public Health programs at the 
University of New Mexico, and by hosting thesis research from other 
universities. Postdoctoral and sabbatical appointments will also be 
provided. Workshops and training courses will be conducted.
    Conduct and sponsor research.--While it is envisioned that limited 
intramural research will be conducted with Center funding, intramural 
research will be principally funded by direct sponsorship of Agencies, 
industry, and the public through grants, contracts, and donations. 
Through the Center, extramural research aimed at critical information 
gaps not addressed by other sponsors will be funded.
        funding of the national environmental respiratory center
    LRRI seeks authorization and subsequent appropriations through a 
lead agency for core funding, with Complementary sponsorship through 
grants and contracts from DOE and other agencies for research aligned 
with individual agency mandates and strategic goals.
    An initial appropriation of $2 million per year for 5 years, 
beginning in fiscal year 1998, will establish the Center and its core 
information, educational, and administrative functions. This amount 
will provide for critical computing and communication infrastructure, 
and limited facility renovations and equipment acquisitions. This 
amount will provide very little intramural or extramural research 
support; additional support for these purposes will be sought in 
coordination with the lead sponsoring agency as the Center is 
established. The goal is to develop research support principally 
through sponsored programs, and to use the core Center support 
principally to provide coordinating and information services and 
sponsor limited collaborative research.
    Support is sought from DOE through funding of related, independent 
research programs having special relevance to DOE's mission, and 
through such participatory support of the Center's core functions as 
established on an interagency basis.
                                 ______
                                 
Prepared Statement of the Integrated Petroleum Environmental Consortium
    It is proposed that the Department of Energy establish and support 
a focused, university-based program, the Integrated Petroleum 
Environmental Consortium (IPEC), with the goal of increasing the 
competitiveness of the domestic petroleum industry through a reduction 
in the cost of compliance with U.S. environmental regulations. Federal 
support is specifically requested as part of the fiscal year 1998 
appropriation for the Department of Energy through the BER account or 
other source the Subcommittee may determine to be appropriate.
           the crisis in the u.s. domestic petroleum industry
    The availability of energy will be the single most important factor 
in determining quality of life in the United States over the next 
century. Jobs, manufacturing output, transportation, and personal 
comfort are all tied to a plentiful, affordable energy supply. The 
petroleum industry has played a major role in meeting energy needs in 
this century. Petroleum will continue to be a major factor in the 
energy needs of the world well into the next century. However, the 
declining price of crude oil and the increasing cost of compliance with 
environmental regulations have combined to produce a decrease in 
domestic oil production in the U.S. The major oil companies have scaled 
down their domestic operations and refocused their exploration and 
production activities on foreign resources. The 8,000 independent 
producers are faced with two options--producing from the domestic 
resource base or going out of business. At the same time, the 
independents are increasingly the inheritors of mature fields and 
reservoirs left behind by the majors. Yet compared to the major 
producer the independent is the most vulnerable to the declining price 
of oil and gas, the costs of environmental compliance and unfavorable 
tax policies. The independent producer has only one source of revenue--
the sale of oil and gas. There is no vertical depth to his business. 
These factors have combined to not only greatly reduce the number of 
new wells drilled but also to accelerate the plugging of marginal or 
stripper wells. In the U.S. a stripper well is plugged every 30 
minutes. At the same time new well completions are at a 45-year low.
    Clearly this trend is not in the best interest of the U.S. in terms 
of energy self-sufficiency or national security. We are turning over 
control of our cost of production in terms of energy costs to foreign 
interests. If domestic exploration and production and refining are to 
continue to play a strategic role in meeting U.S. energy needs, the 
domestic petroleum producer will require access to low cost technology 
for waste minimization and environmental remediation in exploration and 
production (E&P), refining, transportation and end use of petroleum.
    In many cases this technology does not now exist in a cost-
effective form. Conventional waste treatment and pollution control 
technologies always add to E&P, refining and transportation costs. 
These costs are increasingly out of proportion with the economic output 
of the petroleum industry. In 1991, four industry sectors (chemicals, 
petroleum, pulp and paper, and primary metals) incurred three-fourths 
of the $21 billion spent by U.S. manufacturers to comply with pollution 
control regulations. However, these sectors accounted for about one-
fifth of U.S. manufacturers' value added (Office of Technology 
Assessment). In 1992, the domestic petroleum industry spent $10.5 
billion on the environment. This is more than the top 300 oil and gas 
companies earned in profits that year and more than the industry spent 
searching for oil and gas in the U.S. in 1992. With oil at $16 per 
barrel at the wellhead, the industry spent $4 on environmental 
protection for every domestically produced barrel of oil--$41 for every 
man, woman and child in America (``Oil and Gas Journal'' and the 
American Petroleum Institute).
    All U.S. industry is caught in the conflict between national 
economic and environmental goals. Pollution control in the petroleum 
industry presents regulatory hurdles for U.S. domestic production and 
refining that producers and refiners in many other countries do not 
face. This places U.S. producers and refiners at a global competitive 
disadvantage. The U.S. petroleum industry needs cleaner, more cost-
effective technologies and new approaches to lower the costs of 
complying with pollution and waste disposal regulations that U.S. 
society demands. A reduction in environmental compliance costs will 
have the greatest impact on the national economy when applied at this 
level--the level of the extraction industries. Lower energy costs make 
all industry more competitive. The petroleum industry and the nation 
would benefit not only from lower compliance costs, but also from the 
jobs and commerce preserved in the domestic petroleum industry and the 
related trade in capital equipment and professional services in 
industries that service the petroleum industry. New technologies for 
pollution control and remediation will also be an exportable product.
        the integrated petroleum environmental consortium (ipec)
    For strategic and economic reasons the U.S. domestic petroleum 
industry must be able to compete with foreign producers and refiners. A 
major sector of our economy and our national interests are clearly at 
stake. Compliance with environmental regulations is a major factor in 
that competitiveness. The strategic and economic importance of this 
industry requires that industry, government and academia combine their 
resources and coordinate their efforts toward finding solutions for the 
environmental problems that represent the greatest challenge to the 
competitiveness of the domestic petroleum industry. The success of this 
effort will not only stimulate jobs in this industry sector, but also 
contribute in a large way to the environmental health of the nation. In 
response to this need, the four major research universities in the oil-
producing states of Oklahoma and Arkansas have joined together to form 
the Integrated Petroleum Environmental Consortium (IPEC). The mission 
of IPEC is to increase the competitiveness of the domestic petroleum 
industry through a reduction in the costs of compliance to U.S. 
environmental regulations. Objectives specific to meeting the goals of 
the consortium include the following:
1. Development of cost-effective technologies and business practices to 
        meet the challenges of environmental regulations to the 
        competitiveness of the domestic petroleum industry.
    As already noted, new technologies are needed in the petroleum 
industry now to provide cost-effective solutions to environmental 
problems in exploration and production and refining. The U.S. petroleum 
industry is already undertaking this challenge; however, the industry 
needs help. The domestic petroleum industry is devoting ever more of 
its resources toward meeting a growing body of environmental 
regulations as the price of oil declines. The inevitable result has 
been severe reductions in work force and closings. The domestic 
petroleum industry has lost over 500,000 jobs in the last decade. It is 
time for the federal government to reevaluate the regulatory burden on 
the domestic petroleum industry and to help the industry develop the 
cost-effective technologies it needs to meet meaningful environmental 
standards. With a dwindling technical work force caused both by 
redirecting E&P operations and layoffs, the domestically-oriented work 
force is increasingly focused on environmental compliance, not 
technology 1development. Indeed laboratories which were once on the 
forefront of technology development are now empty and dormant. What is 
left of the once busy industry research centers are technical service 
centers. The former research leaders still employed are now ``putting 
out fires'' and the independent producers rarely have a technical staff 
for any kind of R&D. The U.S. petroleum industry is relying more and 
more on technical professionals in academia for research. However, 
budgets are tight and only the most immediate of problems are being 
addressed. Even a 3-5 year time frame is often farther out than the 
industry can afford to look.
    The federal government should direct a larger segment of R&D 
resources to the development of new, cost-effective environmental 
technologies to support the domestic petroleum industry. A critical 
segment of this effort should be support of university research. A 
major part of this research funding should place emphasis providing 
near-term solutions to these problems with direct input from the 
petroleum industry. In partnership with industry, IPEC can help provide 
these solutions.
    The petroleum industry will measure the relevancy of research in 
terms of the tangible results produced. In the context of the vision of 
IPEC this means new, cost-effective technology made available to 
industry. The greatest impact on competitiveness on the domestic 
petroleum industry will be made by improved solutions to problems which 
have a significant economic impact on the industry. The research 
conducted within IPEC will, therefore, by necessity have a strong 
applied element.
    IPEC will use an integrated team approach to technology 
development. The teams will not only be integrated with respect to 
scientific or engineering discipline but also integrated with respect 
to the technology development process itself. In other words the teams 
will also consist of members whose expertise is in scale-up and 
commercialization of new technology. If the work product of the team is 
to make a significant impact in the domestic petroleum industry the 
most important member of the team will be the end user of the 
technology. A teaming of investigators from different disciplines and 
representing different levels of the technology development process 
will greatly facilitate communication among the investigators and keep 
the team focused on solving the problem. The team approach is certainly 
the shortest path to making a meaningful impact on the competitiveness 
of the domestic petroleum industry.
    This team and systems approach to solving real problems in the 
domestic petroleum industry will be the hallmark of IPEC. Fundamental 
research will be coupled with bench-scale testing of concepts, pilot 
testing, field demonstrations and technology transfer. The end user of 
the technology will always be heavily involved in technology 
development as an advisor and hands-on participant. As an investment in 
future technology development, undergraduate and graduate students will 
be integrated into every aspect of the work of the consortium. 
Undergraduate students will gain valuable experience working on 
consortium projects while graduate students will use consortium 
research work for their theses and dissertation. The integrated 
approach to technology development will give these students much needed 
pilot and field experience and industrial contacts.
    Competitive business prices are perhaps equal in importance to 
technology development, especially to the independent producer. The 
development of new business practices with respect to accounting, 
taxation, finance, forecasting, etc. are needed which can put the 
producer in a better position to determine the financial risks of 
potential environmental costs and manage those risks in order to 
maximize printability. Reduced financial risk and growth create jobs.
2. Training of environmental professionals as an investment in 
        technology, policy and business development.
    IPEC universities will continue to graduate scientists and 
engineers who have a strong foundation in a basic engineering 
discipline, physical science, or biological science with additional 
training in environmental technologies at the undergraduate or graduate 
level to produce environmental specialists. Environmental issues cut 
across many disciplines. Therefore, this additional training is cross 
disciplinary to give students a broad understanding of environmental 
problems. This includes environmental law and policy and the financial 
and economic impact of environmental regulation on the domestic 
petroleum industry.
    Environmental policy curricula at IPEC universities will be 
enhanced to include a prerequisite foundation in a field of engineering 
or science. Those who shape environmental policy should fully 
understand the impact of those policies. IPEC universities also will 
develop new curricula to explore the boundary between environment and 
business in terms of accounting practices, economics, finance and 
taxation. A new kind of environmental specialist, invaluable to the 
petroleum industry, can arise out of the area where issues of 
environment and business converge.
    In addition to training the environmental specialist, IPEC 
universities are committed to making all of their graduates 
environmentally aware. This is especially true of graduates in 
technical fields whose employment activities can have a dim 
environmental impact. These curricula will be enriched with an 
environmental component integrated into their course of study. The 
result of this enrichment will be a scientist or engineer who considers 
the environmental impact of a project up front and minimizes wastes.
3. Dissemination of information regarding technology development, legal 
        and regulatory issues, and business practices which can impact 
        the competitiveness of the domestic petroleum industry.
    Research results from all IPEC technology and business practice 
development projects will be documented through standard DOE reporting 
procedures. IPEC investigators also will deliver papers and contribute 
journal articles on noteworthy achievements. All resulting citations 
can then be picked up and disseminated through such standard online 
databases as DOE's ``Energy Science and Technology,'' the American 
Petroleum Institute's ``APILlT,'' and TU's ``Petroleum Abstracts.''
    IPEC also will provide a repository for all reports, papers, and 
articles resulting from its research projects. These documents will be 
available on demand from the repository for the fulfillment of external 
orders. Where appropriate, IPEC research results also will be compiled 
into databases for nationwide access via Internet. Information 
concerning the databases will be distributed to the domestic petroleum 
industry and other interested users through exhibits at selected 
conferences, the trade literature, target mailings and Internet 
Listserv messaging. Every effort will be made to guarantee equity of 
access throughout the petroleum industry. IPEC also will establish a 
feedback mechanism through which the major and independent oil and gas 
producers can inform the R&D community of their experiences with new 
technologies as well as their technology needs.
    IPEC also will serve as a resource for Congress, federal and state 
regulatory agencies and the domestic petroleum industry to provide an 
objective assessment of existing or proposed environmental regulations 
on the basis of cost/benefit and rise analysis.
    Lastly, there also is an acute need for readily accessible 
continuing education opportunities for scientists, engineering, legal 
professionals, accountants, economists, etc. in the petroleum industry 
to provide environmental retooling and continual updating. The 
environmental field is progressing rapidly. Activities such as focused 
environmental seminars, workshops, short courses, telecourses, etc. can 
sharpen the skills of participants and act as conduits for new ideas 
and technologies into the petroleum industry.
              organization and operating practices of ipec
    The Integrated Petroleum Environmental Consortium (IPEC) is a 
consortium of four universities in Oklahoma and Arkansas: The 
University of Tulsa (TU), The University of Oklahoma (OU), Oklahoma 
State University (OSU), and the University of Arkansas (UA) at 
Fayetteville. The fiscal center of IPEC will be the University of Tulsa 
which is the sole subcontractor to BDM-Oklahoma which is the M&O 
contractor for the Bartlesville, OK Department of Energy facility, the 
National Institute for Petroleum and Energy Research (NIPER). Through 
NIPER, BDM Oklahoma and TU are responsible for implementation of the 
National Oil Program for the DOE. IPEC will be an extension of this 
effort.
    The operational activities of IPEC will be directed by an executive 
committee composed of two faculty members and one research 
administrator from each of the four universities (TU, OU, OSU, UA). The 
chair of the executive committee will rotate annually among TU, OU, OSU 
and UA. IPEC will be very much industry driven to ensure that the 
consortium is meeting the needs of the industry and fulfilling its 
mission. The executive committee will be advised by an industry 
advisory board composed of technical, legal and business environmental 
professionals from major oil companies and independent producers. The 
industrial advisory board will have the last word on funding decisions 
for technology development projects. If, in the opinion of the advisory 
board, a proposed project does not help fulfill the mission of the 
consortium the project will not be funded. All four of the IPEC 
universities have signed a memorandum of understanding forming IPEC and 
agreeing to this organizatianal structure.
        the south-central environmental resource alliance (sera)
    In order to bring additional resources into IPEC and further ensure 
the success of its programs, IPEC has entered into an alliance with the 
Waste Management Education and Research Consortium (WERC). WERC was 
established through DOE sponsorship to expand the nation's capability 
to address waste management issues through education, technology 
development and technology transfer. WERC's special niche is 
radioactive, hazardous and solid waste management. WERC's members are 
New Mexico State University, University of New Mexico, New Mexico Tech, 
and Navajo Community College in collaboration with Sandia National 
Laboratories and Los Alamos National Laboratory. The missions at IPEC 
and WERC will be enhanced by a synergistic collaboration between the 
two consortia as the South-central Environmental Resource Alliance.
                            funding of ipec
    IPEC is seeking appropriations of $4 million for fiscal year 1998 
and the succeeding fiscal years 1999, 2000, 2001, and 2002 through 
Department of Energy. The consortium will be responsible for private 
sector and state support of no less than 25 percent of federal 
appropriations in fiscal year 1998 and an average of 50 percent of 
federal appropriations over a five year period. The consortium will be 
subject to review as of September 30, 1999 and each 12-month period 
thereafter to ensure the effective production of data, regulatory 
assessments, and technology development meeting the stated goals of the 
consortium.
                                 ______
                                 
     Prepared Statement of Cyrus M. Jollivette, Vice President for 
               Government Relations, University of Miami
    Mr. Chairman and Members of the Subcommittee: I appreciate the 
opportunity to present testimony on behalf of the University of Miami. 
The University is seeking your support for two initiatives within your 
purview: first, a project for the exploitation of high energy electron 
beam irradiation for the sterilization of medical wastes; and, second, 
a joint program with the U.S. Army Corps of Engineers which is 
addressing some of the urgent problems of South Florida's declining 
environment.
    Our request is for your continued support of two very important 
projects in Florida. Already, substantial progress has been made which 
points to the high potential of these vital research initiatives. Your 
support of these efforts now ultimately will result in substantial 
savings not only to the federal government, but also to state and local 
governments.
    First, I call your attention to the initiative at the University of 
Miami Laboratories for Pollution Control Technologies in collaboration 
with Jackson Memorial Hospital (the second largest hospital under a 
single license in the nation) which seeks to exploit high energy 
electron beam irradiation for the sterilization of medical wastes. The 
University has developed a process for treating waste water utilizing 
electron beams, which had been supported for many years by the National 
Science Foundation and the Environmental Protection Agency. This 
technology is also capable of disinfecting medical waste prior to 
landfill disposal.
    Because of your support and that from private industry researchers 
now have developed, fabricated, and inaugurated a prototype electron 
beam facility at the University of Miami. For the project goals to 
become a reality and the technology to be made commercially available, 
we ask that you provide $1.5 million in continuation funding to 
leverage private sector support for this demonstration project at the 
University of Miami/Jackson Memorial Medical Center through the 
Department of Energy Biological and Environmental Research account.
    Although the generation of potentially infectious waste material 
has been a necessary function of health care since Hippocrates, it is 
only within the past few years that treatment prior to disposal of this 
very sensitive waste stream has become an issue of grave concern and 
expense. This project addresses directly the myriad problems and costs 
associated with the approximately 600,000 tons of infectious waste 
generated annually by the nations hospitals and other medical 
facilities.
    To date, the reaction has been the enactment of a complexity of 
laws and guidelines to direct the nation's health care providers how to 
handle their infectious waste--now referred to as regulated medical 
waste--in a manner that would protect their own employees, sanitation 
workers, and the public at large. Further, measures such as the Clean 
Water Act and the Clean Air Act which provide guidelines for new and 
existing medical waste incinerators require that treatment and disposal 
be done with minimal negative environmental impact with special focus 
placed on harmful air emissions and liquid discharges.
    Over the past several years, researchers in Florida have been 
pursuing a non-burn treatment technology. Based upon the experimental 
work completed to date, this approach, although still in the testing 
and developmental stages, renders simulated infectious medical waste 
(red bag) both thoroughly disinfected and totally unrecognizable 
through a combination of advanced shredding and high-energy electron-
beam technologies.
    Mr. Chairman, the Congress should not appropriate money for half-
way applications; rather, the Congress should concentrate on permanent 
solutions. The Congress should provide funds for research on the 
production and utilization of electron beam irradiation to replace 
incineration of medical wastes. Then, once and for all, we would solve 
the interrelated problems associated with the environment, and thus 
provide a clean and reliable method for the treatment and disposal of 
medical waste streams.
    Second, we ask that you look favorably upon a joint program with 
the U.S. Army Corps of Engineers which is addressing the urgent 
problems of South Florida's declining environment. The University of 
Miami Center for Marine and Environmental Analyses is conducting 
research under contract with the Corps of Engineers Waterways 
Experiment Station (WES) Environmental Modeling, Simulating, and 
Assessment Center (EMSAC) at Vicksburg, Mississippi, and in support of 
the ecosystem restoration activities of the Jacksonville, Florida Corps 
of Engineers District Office.
    We respectfully request that you allocate $3 million for the Corps 
of Engineers Waterways Experiment Station to provide core support of 
$1.5 million to EMSAC, including $500,000 to involve minority academic 
institutions; and $1.5 million to establish a cooperative agreement 
with one or more academic partners with major research institutions 
involved in complementary interdisciplinary scientific research 
relevant to ecosystem management and ecological risk assessment, 
including $500,000 to involve minority academic institutions.
    Through this program research expertise is being brought to bear on 
many environmental issues of concern to the Army Corps of Engineers, 
particularly its aquatic plant and other environmental programs at the 
Vicksburg Waterways Experiment Station.
    This crucial research program seeks to provide an ecological risk 
assessment and ecosystem management framework in support of the 
Waterways Experiment Station; apply modeling, experimental, and field 
expertise to studies of estaurine ecosystems; and advance the 
understanding of freshwater, marine, and coastal aquatic ecosystems in 
relation to human activities, with particular attention to South 
Florida.
    The project is organized around the newly emerging principles of 
ecological risk assessment and ecosystem management and it builds upon 
previous work conducted under the sponsorship of the U.S. Man and the 
Biosphere Program, the Environmental Protection Agency, NOAA's Coastal 
Ocean Program, and private sector support. Because of the unique 
relationships of the academic Center for Marine and Environmental 
Analyses, the Corps of Engineers project will be broadly coordinated 
and integrated with other ongoing South Florida research, particularly 
in conjunction with the Federal Ecosystem Restoration Working Group, 
the South Florida Water Management District, the Florida Department of 
Environmental Protection, the University of Florida Agricultural 
Research Station in Belle Glade, and other regional groups of interest.
    We are convinced that only through consistently funded, long-term 
regional partnerships can the problems of ecosystem management and 
ecological sustainability be addressed to maximize the potential for 
future generations to enjoy economic prosperity and unique natural 
resources.
    Mr. Chairman, my colleagues and I know what a difficult 
appropriations year you face. However, again, we respectfully request 
that you give very serious consideration to these two projects so that 
the research progress already made is not lost. In the long-term, these 
national investments will provide continuing dividends in our mutual 
search for cost-effective solutions for the nation's problems.
                                 ______
                                 
    Prepared Statement of Lynne P. Brown, Associate Vice President, 
        Government and Community Relations, New York University
    Research into cognition, learning, emotion, and memory can help 
educators, physicians, and other health care givers, policymakers, and 
the general public by enhancing our understanding of normal brain 
development as well as the many disabilities, disorders, and diseases 
that erode our ability to learn and think, to remember, and to emote 
appropriately.
    New York University is seeking $10.5 million over five years to 
establish at its Washington Square campus a Center for Cognition, 
Learning, Emotion and Memory. The program will draw on existing 
research strengths in the fields of neural science, biology and 
chemistry, psychology, computer science, and linguistics to push the 
frontiers of our understanding of how the brain functions, and how we 
learn.
    Such exploration into the fundamental neurobiological mechanisms of 
the nervous system has broad implications for human behavior and 
decision making as well as direct applicability to early childhood 
development, language acquisition, teaching methods, computer science 
and technology development for education, the diagnosis and treatment 
of mental and memory disorders, and specialized training for stressful 
occupation.
Cognition, Learning, Emotion and Memory Studies at NYU (CLEM)
    New York University is poised to become a premier center for 
biological studies of the acquisition, storage, processing and 
retrieval of information in the nervous system.
    To be housed at NYU's Washington Square Campus within the Center 
for Neural Science, the new Center will capitalize on the university's 
expertise in a wide range of related fields that encompass our computer 
scientists who use MRI imaging for research into normal and 
pathological mental processes in humans, our vision scientists who are 
exploring the input of vision to learning and memory, our physical 
scientists producing magnetic measurements of brain function with a 
focus on the decay of memories, our linguists studying the relation of 
language and the mind, and our psychiatrists conducting clinical 
studies of patients with nervous system disorders.
    The New York University Program in Cognition, Learning, Emotion and 
Memory (CLEM) focuses on research and training in the fundamental 
neurobiological mechanisms that underlie learning and memory--the 
acquisition and storage of information in the nervous system. Current 
studies by the faculty at NYU are determining why fear can facilitate 
memory; how memory can be enhanced; what conditions facilitate long-
term and short-term memory; and where in the brain all these memories 
and processed and stored. The research capacity of this Center 
capitalizes on our expertise in physiology, neuroanatomy, and 
behavioral studies, and builds on active studies that range from the 
mental coding and representation of memory to the molecular foundations 
of the neural processes underlying emotional memories. Our faculty use 
saelectrophysiological and neuroanatomical techniques to study the 
organization of memory in the medial temporal lobe. Together these 
researchers bring substantial strength in psychological testing, 
computational sophistication, advanced tissues staining and electrical 
probes, and humane animal conditioning. These core faculty are well 
recognized by their peers and have a solid track record of sustained 
research funding from federal agencies and private foundations: total 
costs awarded and committed for their research for full project periods 
from all sources presently total $7 million. Additional faculty are 
being recruited in areas of specialization that include: the cellular 
and molecular mechanisms operative in neural systems that make 
emotional memory possible, neurophysiological studies of memory in non-
human primates, computational modeling of memory, and 
neuropsychological and imaging research on normal and pathological 
human memory.
    Colleagues in the Biology Department are doing related work in the 
molecular basis of development and learning. Given the important input 
of vision to learning and memory, the Center has strong links with the 
many vision scientists based in the Psychology Department who work on 
directly related topics that include form, color, and depth perception, 
memory and psycholinguistics. Colleagues in behavioral science study 
learning and motivation, memory and aging. Physical scientists explore 
the magnetic measurement of brain function, with a focus on the decay 
of memories. CLEM also shares research interests with colleagues in the 
Linguistics Department, who study the relation of language and the 
mind.
    Research linkages extend to computational vision studies, now 
centered in NYU's Sloan Program in Theoretical Neurobiology. The Sloan 
Program works closely with computer scientists at our Courant Institute 
on Mathematical Science, with colleagues at the Medical Center in 
Psychiatry, who use MRI imaging for research into normal and 
pathological mental processes in humans, and in Neurobiology, who are 
conducting clinical studies of patients with nervous disorders, 
especially memory disorders.
    What is unique and exciting about the establishment of such a 
comprehensive center at NYU is the opportunity to tap into and 
coordinate this rich multidisciplinary array of talent to conduct 
pioneering research into how the brain works. In this, the ``Decade of 
the Brain,'' NYU is strategically positioned to be a leader.
Early Childhood and Education
    Research into the learning process as it relates to attention and 
retention clearly holds important implications for early childhood 
development. Although most of a person's brain development is completed 
by birth, the first few years of life are critically important in 
spurring intellectual development. For example, research has already 
shown that in their early years, children need human stimulation, such 
as playing and talking, to develop the ability to learn.
    With more immigrant children in schools, language development is 
another crucial area of study. If a child's brain were more receptive 
to acquiring sounds during the first few months of life, and language 
in the first few years of life, then students may learn a second 
language more quickly if taught in the lower grades instead of waiting 
for high school.
    In the midst of a national debate on education reform, thousands of 
education innovations are being considered without the advantage of a 
fundamental understanding of the learning process. CLEM researchers, 
coupled with educational psychologists, can contribute to a better 
understanding of how parents can stimulate their children's cognitive 
growth, how children learn at different stages and use different 
styles, how educators can accommodate those styles, and how educational 
technology can be harnessed to increase retention and memory.
    At NYU, these efforts will be enhanced by our scholars and research 
conducted in our School of Education and our New York State-supported 
Center for Advanced Technology.
Computer Science and Technology Development
    As we refine our knowledge of how the brain acquires, processes, 
retains and retrieves information and images, we will also be able to 
improve the design, development and utilization of computer science and 
technology. As we reach a better understanding of how children learn, 
we can more effectively harness computer technology in the service of 
education.
    At NYU, this effort is enhanced by the presence of our New York 
State-supported Center for Digital Multimedia, Publishing and 
Education, which brings together educators, laboratory scientists and 
software designers who explore how interactive multimedia technologies 
enhance learning and develop prototype teaching models.
Specialized Training
    Research into how cognition and emotion interact can have 
applicability to other diverse areas of interest including retraining 
of adult workers, job performance and specialized training for high 
risk or stressful jobs such as military service and emergency rescue 
work.
    Accordingly, we believe that the work of this Center is an 
appropriate focus for the Department of Energy, given the Department's 
long-term involvement and investment in computer science technology 
through its Basic Energy Sciences program. The focus of the NYU Center 
for Cognition, Learning, Emotion and Memory is entirely consistent with 
the Department's commitment both to the Basic Energy Sciences, 
including computer science, and to its commitment to Biological and 
Environmental Research. We have demonstrated how scientists from a 
broad range of biological sciences are working together with leading 
mathematics and computer science researchers to achieve a better 
understanding of how the brain functions and how we learn. The 
Department's commitment to education and to science will be well served 
through this partnership.
                                 ______
                                 
    Prepared Statement of David P. Beck, Ph.D., President, Coriell 
                     Institute for Medical Research
    Mr. Chairman and members of the subcommittee, I appreciate the 
opportunity to be here today to discuss with you the wisdom of 
establishing a National Human Cell Repository Center, and the 
importance of such a repository as a logical step in advancing cutting-
edge biomedical research in the Department of Energy's (DOE) Biological 
and Environmental Research Program. There is a critical and increasing 
need for a contamination-free supply of human cells for high level 
research into genetic disorders such as cancer, heart disease, 
Parkinson's disease, and other serious human diseases.
    As a scientist and President of the Coriell Institute for Medical 
Research, it is my job to oversee the acquisition, characterization, 
cataloguing and shipment of human cell cultures to the DOE and NIH 
centers for genome research and other high level research facilities 
around the United States and the world. Coriell Institute is the 
world's largest provider of such cell cultures.
    The Coriell Institute was founded in 1953 by Dr. Lewis Coriell, a 
scientist who developed pioneering techniques for growing human cells 
in culture, thus permitting their use in scientific research. Early on, 
Coriell research was crucial in developing the cell culture technology 
that made the Salk Polio Vaccine possible. Today, scientists throughout 
the world depend on Coriell cell cultures for use in disease research, 
and many research advances have depended directly on the cultures 
supplied by Coriell.
    Biomedical science today is making rapid advances in both 
diagnostic and therapeutic techniques. For example, molecular 
antibiotics are being developed which can find and destroy the genes of 
an infectious organism in an utterly specific fashion, and gene-based 
therapeutic techniques are being tested through clinical trials for the 
treatment of such diseases as cancer. In short, we are on the proper 
scientific trajectory which will one day make it possible to eliminate 
such diseases as diabetes, cystic fibrosis, cancer and other diseases 
which stem from defective genes.
    Today, a problem in sustaining progress on disease research stems 
from the fact that the volume of cells needed for high level research 
is growing and will continue to grow as the scientific community 
extends molecular genetic technology into new areas such as mental 
illness. Specifically, this means that of the 4,000 plus genetic 
diseases known to exist, only about 1,000 are banked and available as 
cell cultures from Coriell. In order to procure and catalogue cell 
cultures for the remaining 3,000 diseases, a dedicated human cell 
repository is essential.
    Mr. Chairman, the Coriell Institute has many responsibilities in 
its role as the nation's premier supplier of cell cultures. Of 
particular note is the role of Coriell Institute, in response to 
demands from the research community, in acquiring specific collections 
of cells for research into genetic diseases. A prime example is 
Coriell's work over the past year in building a collection of cells 
from breast cancer patients. Our scientists were involved for many 
years in the search for a mammary tumor virus, and have recently 
developed a new technology for whole genome amplification to make 
genetic material available from tumors such as those from breast cancer 
patients. The technology is important because cell lines from this type 
of tumor are difficult to grow. This technique allows access to rare 
and valuable tissue from patients with a family history of the disease.
    The breast cancer initiative is a good illustration of the ways in 
which new frontiers can be crossed in studying diseases. It is also a 
telling illustration of a serious problem in advanced research--
specifically, the increasing demand for cell cultures and the related 
services which support high level research.
    Mr. Chairman, as the individual responsible for the largest human 
cell repository in the world, I can tell you that a National Human Cell 
Repository Center is a critical next step in facilitating the most 
sophisticated research on genetic diseases. I believe, as do others in 
the field, that a national center which provides cells and genetic 
material to researchers around the country and abroad will greatly 
enhance the quality of medical research. As NIH Director Harold Varmus 
has testified, ``we foresee new means to prevent disease, and we 
anticipate the development of novel therapies for the next century, 
based on the delivery of genes to ailing cells, and drug design guided 
by molecular structures.''
    Novel therapies for the next century is the goal in disease 
research (as NIH Director Varmus has pointed out). To accomplish that 
goal requires a consistent and reliable supply of cell cultures, the 
space to store such cultures and the human skill and equipment to 
support a state-of-the-art facility.
    It is my belief that the establishment of a National Human Cell 
Repository Center will provide an essential component in support of 
disease research in both the Federal and non-Federal sectors. The 
Department of Energy has a long-standing interest in examining health 
effects of environmental factors; indeed its founding of the Human 
Genome Project set in motion much of the most exciting activity we see 
today in genetics research. In support of this project, Coriell 
Institute, during the past several years, has distributed hundreds of 
shipments of cell lines to DOE labs. While such activity has been 
important, it will be insufficient for future efforts in genetic 
research, which is why we need a National Repository.
    Mr. Chairman, establishing such a facility from the ground up would 
be excessively expensive and would require too much time to put the 
necessary mechanics in place. However, a National Center can be built 
by simply adding to an existing resource which is positioned to supply 
research demands into the next century. That resource is the Coriell 
Institute for Medical Research.
    Given Coriell's position as the world's largest human cell 
repository and its interaction with the DOE and NIH labs, it makes 
perfect sense to establish a National Center in a public-private 
partnership fashion, particularly given the Federal Government's long-
standing and continued support for medical research. By making an 
investment in a National Human Cell Repository Center, the Federal 
Government can help to ensure the availability of human cells for 
disease research scientists throughout the United States and the world.
    The Coriell Institute already has a plan for establishment of a 
National Repository, and is prepared to implement that plan 
immediately. Simply put, this repository can come about by way of an 
extension to the existing Coriell facility; the cost will be 
approximately $12 million. Since Coriell is a non-profit entity and 
thus does not have sufficient resources to undertake the extension, it 
is requesting Federal grant assistance to carry out the plan noted 
above. In exchange, Coriell will operate the Repository from its own 
resources.
    In summary, it is my belief that Federal investment toward this end 
will produce tremendous benefits and that, considering the cost of 
disease to this country and the potential for missed research 
opportunities if we do not move forward, we cannot afford not to 
establish a National Cell Repository.
    Mr. Chairman, I will be happy to discuss this initiative with you 
or any of the subcommittee members at any time.
    Thank you for this opportunity.
                                 ______
                                 
   Prepared Statement of Dr. James Seiber, Nevada Project Director, 
  Department of Energy Experimental Program to Stimulate Competitive 
                                Research
    Mr. Chairman and Members of the Subcommittee, I thank you for the 
opportunity to submit this testimony for the record. My name is Dr. 
James Seiber, and I am Project Director for the Department of Energy 
(DOE) Experimental Program to Stimulate Competitive Research (EPSCoR) 
in the state of Nevada. I am pleased to submit this testimony today 
regarding DOE EPSCoR.
    I would like to thank this Subcommittee for its support of DOE 
EPSCoR over the past seven years, and I ask the Subcommittee to 
continue to provide strong support for this important program. I would 
particularly like to thank Senator Reid for his support of DOE EPSCoR. 
Senator Reid's leadership and hard work have been absolutely critical 
to this program's success in Nevada and the other EPSCoR states.
Background
    EPSCoR is a science and technology research and development program 
within seven federal agencies, including DOE. EPSCoR is improving our 
nation's science and technology capability by funding talented 
researchers in states that historically have not received significant 
federal R&D funding. EPSCoR helps researchers improve their research 
capabilities and quality in order to compete more effectively for non-
EPSCoR research funds. It relies on rigorous merit review in order to 
ensure high-quality research. And EPSCoR does all of this for a 
relatively modest investment of federal R&D funds.
    EPSCoR is necessary because our nation's S&T research funds have 
historically been concentrated in a small number of institutions and 
states. That's neither good science nor good public policy. As our 
nation moves toward a science and technology policy aimed at global 
economic competitiveness, it is imperative that all states have a 
sufficient S&T base to contribute. Students across the country--not 
just in a handful of states--need access to high-quality education and 
research, and the jobs and economic health that go along with a 
competitive R&D base.
DOE EPSCoR
    DOE EPSCoR was initiated by Congress in fiscal year 1991 with a $4 
million appropriation. The program was targeted to those states 
previously designated for the National Science Foundation EPSCoR 
program.\1\ In 1992, Congress authorized DOE EPSCoR in the Energy 
Policy Act (Public Law 102-486). The Administration has requested level 
funding of $7 million for the program in its fiscal year 1998 budget 
request.
---------------------------------------------------------------------------
    \1\ EPSCoR states include Alabama, Arkansas, Idaho, Kansas, 
Kentucky, Louisiana, Maine Mississippi, Montana, Nebraska, Nevada, 
North Dakota, Oklahoma, South Carolina, South Dakota, Vermont, West 
Virginia, Wyoming, and the Commonwealth of Puerto Rico.
---------------------------------------------------------------------------
    With the $7 million Congress appropriated for fiscal year 1997, DOE 
will fund two-year awards for a maximum of $750,000. Only renewal 
proposals will be accepted. In fiscal year 1997, DOE expects to fund 23 
clusters and 63 projects in nine states. Award announcements for fiscal 
year 1997 are expected to be made in July.
    DOE EPSCoR gives the EPSCoR states the opportunity to conduct 
nationally competitive research and to develop science and engineering 
expertise in energy-related fields. Due to the success of this program 
and its importance to DOE EPSCoR States and to our nation, the 
Coalition of EPSCoR states respectfully requests that the Subcommittee 
appropriate $10 million in fiscal year 1998.
DOE EPSCoR in Nevada
    I would like to give the Subcommittee a few examples of the impact 
DOE EPSCoR is having in the state of Nevada. It is rather remarkable 
how closely federal agency support of research and development is 
intertwined with the University and Community College System of 
Nevada's environmental programming. This is well illustrated by 
significant support from the U.S. Department of Energy.
    Nevada is one of seven EPSCoR states with DOE EPSCoR implementation 
awards. As with all EPSCoR awards, these are statewide awards 
supporting faculty at University of Nevada-Reno (UNR), University of 
Nevada-Las Vegas (UNLV), and Desert Research Institute (DRI), and 
supporting the four community colleges through various collaborative 
relationships. There are two research components or clusters:
    Study of Response of Desert Vegetation to Increased 
CO2.--The centerpiece is the development of a Free Air 
Carbon Dioxide Exchange (FACE) site at the Nevada Test Site (NTS). Over 
20 scientists from Lawrence Livermore National Lab, Brookhaven, and 
other universities are participating. This project is headed by UNR 
Biochemistry Chair, Jeff Seemann, with Bob Nowak (UNR), Stan Smith 
(UNLV), and a large cadre of graduate students and staff participating. 
The National Science Foundation and the DOE-Nevada Operations Office 
provide supplemental funds.
    Chemical Physics--Laser Technology at UNLV and Ion Physics at 
UNR.--High energy light interacting with atomic matter is under study, 
as are nanostructures, with national laboratory collaboration. John 
Farley (UNLV), heads up the cluster. Ron Phaneuf (UNR), Tao Pang, 
Dennis Lindle, and Chanfeng Chen (UNLV) participate, again along with 
the participation of many faculty, staff, and students.
    There is also a human resource component which has placed major 
effort in promoting interactions with the DOE Nevada Test Site and our 
state's school system through a traineeship and internship component. 
This component is headed by Bill Cathey (UNR) and Ellen Jacobson 
(UNLV).
Conclusion
    The Subcommittee's support of DOE EPSCoR will determine whether the 
EPSCoR States are able to continue providing DOE with quality, merit-
reviewed research and, as a result, help the U.S. maintain world 
leadership in energy-related research fields. Therefore, I ask the 
Subcommittee to appropriate $10 million for DOE EPSCoR in fiscal year 
1998. This level of funding will strengthen DOE's partnership with the 
EPSCoR states, and greatly enhance the EPSCoR states' contribution to 
our nation's energy R&D expertise.
    I urge the Subcommittee to consider carefully this request, and I 
thank the Subcommittee for this opportunity to testify.
                                 ______
                                 
      Prepared Statement of the American Public Power Association
    The American Public Power Association (APPA) is the national 
service organization representing the interests of over 2,000 municipal 
and other state and locally owned utilities throughout the United 
States. Collectively, public power utilities deliver electric energy to 
one of every seven U.S. electric consumers (about 35 million people), 
serving some of the nation's largest cities. The majority of APPA's 
member systems are located in small and medium-sized communities in 
every state except Hawaii.
    We congratulate the Subcommittee's new Ranking Member, Senator 
Reid, and welcome new members of this Subcommittee, Senators Craig, 
Kohl and Dorgan. APPA looks forward to working with you in the 105th 
Congress. We appreciate the opportunity to submit this testimony 
outlining our fiscal year 1998 appropriations priorities within your 
Subcommittee's jurisdiction.
EMF Research
    Electric and magnetic fields (EMF) refers to the electric field 
caused by voltage and the magnetic field surrounding a current-carrying 
conductor. Concerns about possible adverse human health effects from 
EMF exposure have continued since the early 1970s. In response to 
public questions about EMF, Congress created a new EMF Research and 
Public Information Dissemination Program (better known as the ``EMF 
RAPID'' program) in Section 2118 of the 1992 Energy Policy Act (EPACT). 
This legislation authorized a five-year, $65 million health-based 
research effort to determine the effects of EMF, to demonstrate EMF 
mitigation technologies and to disseminate information to the public. 
Fifty percent of the funding for this program comes from nonfederal 
sources including electric utilities, electric equipment manufacturers 
and other interested parties. APPA's member systems have met their 
contribution goals for each of the past two appropriations cycles. To 
date, 909 public power systems have contributed $1.9 million to fund 
EMF RAPID.
    EMF RAPID was intended by Congress to be a five-year program that 
was to begin in fiscal year 1993 and sunset at the end of fiscal year 
1997. However, because fiscal year 1993 appropriations preceded the 
signing into law of EPACT, a one-year extension of the program is 
needed through fiscal year 1998 in order to meet Congress' intent, 
complete ongoing research projects and provide the program the maximum 
non-federal contributions called for under the law.
    The extension has the support of House authorizing committees and 
is considered non-controversial. H.R. 363 providing for the extension 
has been introduced by Rep. Edolphus Towns. It has been favorably 
reported by the House Commerce Committee and a hearing has been 
conducted on the legislation in the House Science Committee. Markup in 
the latter committee and consideration by the full House are expected 
very soon. Discussions have proceeded with the authorizing committee in 
the Senate and we anticipate action on the EMF RAPID extension in the 
Senate very soon as well. APPA urges this Subcommittee's support of 
extension legislation.
    The Administration has recommended $4 million for the EMF RAPID 
program in fiscal year 1998. APPA supports this request as well as the 
authorization for the ongoing EMF research program, to conduct studies 
primarily at DOE labs, to be funded by an additional $4 million. In its 
budget submission, DOE indicated that after fiscal year 1998 the agency 
will make no further requests for funding of either the EMF RAPID or 
core research programs.
Renewable Energy Programs
    APPA believes it is important to continue development and 
commercialization of clean, renewable energy resources as we face the 
prospect of increased competition in the electricity marketplace. Two 
of the most significant barriers to greater renewable energy use are 
cost and lack of demonstrated experience. Because of the requirement to 
supply electricity to customers on demand, with high reliability at a 
reasonable cost, electric utilities often are conservative when 
evaluating new technologies. Evolving deregulation, coupled with stable 
fuel prices, now adds a further challenge to greater adoption of 
relatively unproved renewable technologies.
    We applaud the Administration's emphasis on DOE energy efficiency 
and renewable programs and ask that this Subcommittee work to ensure 
that renewable energy remains part of the full range of resource 
options available to our nation's electric utilities. APPA supports a 
minimum of $342 million for renewable energy technologies in fiscal 
year 1998. This funding level will restore much of the severe 25 
percent cut made in these programs in fiscal year 1996.
Renewable Energy Production Incentive Program (REPI)
    APPA urges this subcommittee's continued support for REPI, also 
authorized by EPACT, in Section 1212, at the $4 million level requested 
by Administration for fiscal year 1998. REPI permits DOE to make direct 
payments to publicly and cooperatively owned electric utilities at the 
rate of up to 1.5 cents/kWh of electricity generated from solar, wind, 
certain geothermal and biomass electric projects. Because projects of 
this nature often require a long lead time for planning and 
construction it is imperative that stable and predictable funding be 
provided.
    REPI was established to ensure equity between investor-owned 
utilities that utilize renewable energy tax credit and production 
payments and publicly and cooperatively owned electric utilities that 
are unable to do so. Several electric utility restructuring bills 
introduced in the 105th Congress as well as in the state legislatures 
mandate use of renewable energy sources. REPI payments provide the 
singular financial incentive for publicly and cooperatively owned 
utilities to meet these increasing demands. In addition, production 
payments to utilities are an excellent market-based method to spur 
greater interest in renewables. They fit well with DOE's emphasis on 
market-led commercialization.
Climate Challenge Program
    The Climate Challenge program is a joint initiative of the electric 
utility industry and DOE. It emphasizes voluntary, cost-effective 
measures to reduce, avoid or sequester greenhouse gas emissions to 1990 
levels. Through voluntary agreements, 272 public power systems and 
other electric utilities have committed to reduce emissions by over 43 
million metric tons of carbon equivalent in the year 2000. In addition 
to demonstrating that important environmental objectives can be 
achieved through voluntary efforts, the Climate Challenge program 
contributes to a strong U.S. position in international climate change 
negotiations. APPA supports the Administration's budget request of $1 
million to continue the important work of the Climate Challenge 
program.
Storage for High-Level Nuclear Waste
    We support the Administration's budget request of $380 million for 
DOE's Office of Civilian Radioactive Waste Management. These funds will 
enable DOE to continue preparations to accept used fuel beginning in 
1998 as well as to continue scientific studies at Yucca Mountain 
leading to a viability assessment in 1998.
Advanced Hydropower Turbine Program
    The Advanced Hydropower Turbine Program is a joint industry/
government cost-share effort to develop a new, improved hydroelectric 
turbine superior in its ability to protect fish and aquatic habitat and 
operate efficiently over a wide range of flow levels. We support 
funding this program at $1.5 million in fiscal year 1998.
    During the next decade over 100 hydroelectric projects will seek 
new licenses from the Federal Energy Regulatory Commission (FERC). Many 
of these projects were originally licensed over 50 years ago. Newly 
imposed licensing conditions can cost hydro projects 10 to 15 percent 
of power generation. A new, improved turbine could help assure any 
environmental conditions imposed at relicensing in the form of new 
conditioning, fish passages or reduced flows are not accomplished at 
the expense of energy production. This is particularly important due to 
the increasingly competitive electric market in which utilities operate 
today. Flow levels will affect the economics of each of these projects 
and many will be unable to compete if the current trend toward flow 
reductions continues.
    The Advanced Hydropower Turbine Program is planned in three phases: 
(1) design development; (2) model design and testing, and (3) 
development of the final prototype. It is important that the prototype 
be in place in order to accommodate the many hydroelectric projects 
that will be up for relicensing after the year 2000.
Federal Power Marketing Administrations (PMAs)
    We appreciate this subcommittee's continued support of the federal 
power program.
    APPA favors increased efficiency in PMA operations. However, we 
believe Congress also must recognize that federal power sales cover all 
PMA operating expenses plus all Corps of Engineers and Bureau of 
Reclamation operations, maintenance, replacement and rehabilitation 
expenses for hydropower and repayment of the federal investment in the 
construction of the projects. Power sales also support many nonpower-
related expenses associated with these projects. Budget ``scoring'' 
rules aside, because the PMAs charge cost-based rates, reducing 
discretionary appropriations to PMAs actually saves the government 
nothing. As appropriations are lowered, power rates fall accordingly 
thus reducing mandatory receipts on the other side of the ledger. The 
Administration has requested an overall reduction in appropriations to 
the PMAs for fiscal year 1998. In addition, significant reliance is 
placed on use of prior year balances that are as yet uncertain and can 
vary depending upon such circumstances as water flows and general 
weather conditions. We believe these funding decisions are short-
sighted and ask this Subcommittee's careful review of PMA 
appropriations.
    In addition, the Administration's fiscal year 1998 budget assumes 
that the PMAs begin to cover their full share of the unfunded liability 
of the Civil Service Retirement (CSRS) and Disability Fund, the 
Employees' Health Benefits Fund and the Employees' Life Insurance Fund. 
While APPA does not oppose this proposal, we ask that this Subcommittee 
carefully consider the time schedule set for implementing these 
payments in light of the possible impact on rates. A phased-in payment 
schedule, such as that proposed in the Administration's budget for 
Bonneville Power Administration, should be considered.
Corps of Engineers and Bureau of Reclamation
    More than 500 public power systems purchase power generated at U.S. 
Army Corps of Engineers and Bureau of Reclamation dams and marketed by 
the five PMAs. APPA asks this subcommittee's support in assuring 
adequate appropriations are provided to the Corps and Bureau for 
operation, maintenance, major rehabilitation, upgrading and replacement 
of the equipment needed at the powerhouses. The Administration has 
requested reductions in several of these accounts for fiscal year 1998. 
Unfortunately, budget realities in the past often have required the 
Corps and Bureau to defer upgrades and maintenance resulting in 
efficiency losses affecting hydropower production.
    Discussions are continuing in various project areas between 
customers and the operating agencies seeking alternatives to relieve 
the stress caused by the spiraling effects of deferred maintenance. We 
will keep this subcommittee apprised of our progress in this regard and 
look forward to working with you and the authorizing committees in 
seeking remedies to increase efficiencies and deal with ongoing 
maintenance problems.
Federal Energy Regulatory Commission (FERC)
    APPA supports the Administration's budget request of $167.6 million 
for FERC, an increase of seven percent over last year. Adequate funding 
for the agency is particularly necessary at this time in order to 
provide the resources needed to continue implementation of electric 
utility industry restructuring and to address major issues such as 
open-access and stranded costs.
                                 ______
                                 
          Prepared Statement of the American Chemical Society
    Advances in science and technology are the keys to the nation's 
prosperous future. Within the Department of Energy, the Office of 
Energy Research makes many contributions to capture the potential of 
these advances. The advantages of federal support for science and 
technology are manyfold: (1) Science and technology drive economic 
growth. Only the federal government can provide the long-term support 
necessary to enable continued future growth--particularly in an era of 
impatient capital and global competition. (2) Science and technology 
improve the quality of life. Scientists can now cure more diseases, 
educate more students, and live in a cleaner environment because of 
discoveries made through science and technology. (3) Science and 
technology expand the boundaries of knowledge. The nation's future 
prosperity--indeed world leadership--depends upon increased 
understanding of the natural world. While the Society recognizes the 
variety of demands on the federal dollar, a key way to leverage scarce 
federal resources to better meet these challenges is by federal support 
for science and technology. The American Chemical Society believes that 
the Office of Energy Research (OER) of the Department of Energy must be 
supported in the range of 7 percent over fiscal year 1997 to reverse 
the inflationary losses of the past five years.
    OER is a critical element of the broader national research 
portfolio that includes the research accounts at the National 
Institutes of Health, the National Science Foundation, and the 
Department of Defense. The arguments for increased support for OER are 
impressive:
  --OER serves as a critical conduit for achieving many of our national 
        goals and will touch nearly every American, directly or 
        indirectly--from reducing energy consumption to harnessing new 
        energy sources to improving the quality of our environment;
  --Energy remains fundamental to the ability of industrial societies 
        to function. As the energy demands of our nation and of the 
        world escalate, non-renewable energy sources--vital to 
        progress--continue to diminish. Under these circumstances, 
        energy productivity, self-sufficiency, and efficiency are of 
        paramount importance to the nation's security and economic 
        prowess; and
  --Advances in understanding combustion at a fundamental level, 
        improved battery storage, increased efficiencies in metallocene 
        catalytic processes, and breakthrough superconducting materials 
        represent some of the critical energy-related needs OER 
        research supports.
    Just imagine a computer that can compute a teraflop of operations 
per second, bioengineered skin that can be used on critical burn 
victims, and sensors built on artificial intelligence that can detect 
invisible particles in food that would otherwise pass unobserved to the 
naked eye. These advances, and so much more, are now realities because 
of years of basic research discoveries that built one atop the other. 
Without support for fundamental research in the physical sciences 
through the Department of Energy's Office of Energy Research (OER), the 
nation's research portfolio will be incomplete, and the nation's 
ability to sustain growth could be significantly compromised. New 
knowledge and scientifically-literate students will ensure continued 
economic growth, support an improved quality of life, and expand the 
technological boundaries of the world. Strong federal support for 
science and technology is the cornerstone of the partnership among 
industry, academia, the states, and the federal government to meet 
these goals. The United States cannot afford to hinder progress by 
funding science and technology below inflationary levels. The science 
community's recommendation that OER be funded in the range of a 7 
percent increase reflects a balance between keeping pace with inflation 
and recognizing the limited resources of the federal government.
    Strong support for OER will stand as an important achievement of 
the 105th Congress, for both its foresight and its commitment to a 
better standard of living for all Americans. The American Chemical 
Society, with its 152,000 professional chemists and chemical engineers 
who work in industry, academia, and government, feels that the nation's 
portfolio of research and education in the sciences is a critical key 
to our nation's economic security and quality of life. The Society 
looks forward to working with the 105th Congress to make that future a 
reality.
                                 ______
                                 
  Prepared Statement of Father William L. George, S.J., and Father T. 
 Byron Collins, S.J., Special Assistants to the President, Georgetown 
                               University
    Mr. Chairman and Members of the Committee: We are Father William L. 
George, S.J., and Father T. Byron Collins, S.J., Special Assistants to 
the President of Georgetown University, the Father Leo J. O'Donovan, 
S.J. We appreciate this opportunity to testify before your 
Subcommittee.
    Last year in Title II of Public Law 104-271, Congress authorized 
the Secretary of Energy to solicit proposals for projects to prove the 
feasibility of integrating fuel cells (1) with photovoltaic systems for 
hydrogen production and (2) with systems for hydrogen production from 
solid waste via gasification or steam reforming. The same title directs 
the Secretary of Energy to give preference to proposals that are 
submitted jointly from consortia, that include academic institutions, 
industry, State and local governments and Federal laboratories and 
reflect proven experience and capability with the technologies relevant 
to the fuel cells.
    Georgetown University has developed a project that is consistent 
with the requirements of this Title II of Public Law 104-271. Our 
program would be a Solid Waste-to-Hydrogen to Fuel Cell Energy Exemplar 
that uses photovoltaics and solid waste to produce hydrogen to drive 
fuel cells and also produces significant amounts of pure deionized 
water. None of the processes will use incineration. Instead, the 
project uses existing advanced steam reforming devices to process solid 
and complex waste into hydrogen so that there is no negative 
environmental impact. Waste is reduced at a rate of 1,000 lbs. to seven 
pounds of clean minuscule residue. The produced hydrogen serves two 
purposes: first, it becomes an energy source for fuel cells which, in 
turn, will produce heat, water and energy; second, the hydrogen from 
this process, together with the hydrogen generated by sunlight through 
photovoltaics, will produce large amounts of power, heat, and water for 
the systems use. The technology for such a project has been 
successfully tested at Edwards Air Force Base and Oakridge's 
Westinghouse SEG plant.
    Georgetown plans to develop this project and has gathered 
appropriate consortium members composed of academic institutions, 
industry, State and local governments, and Federal laboratories.
    Since Title II of Public 104-271 has already authorized $50 million 
for such projects, we request that the full amount be appropriated in 
fiscal year 1998.
                                 ______
                                 
      Prepared Statement of the American Society for Microbiology
    The American Society for Microbiology (ASM), the largest single 
life science organization in the world, comprising more than 42,000 
members, appreciates the opportunity to provide written testimony in 
support of the Department of Energy's research programs.
    The ASM is made up of scientists who work throughout academic, 
governmental and industrial institutions worldwide. Microbiologists are 
involved in research on problems related to energy, the environment and 
human and animal health. The mission of ASM is to enhance the science 
of microbiology, to gain a better understanding of basic life 
processes, and to promote the application of this knowledge for 
improved health, and for economic and environmental well being.
    The Administration's proposed budget for fiscal year 1998 requests 
$19.2 billion for the DOE overall. Included in that request is $2.5 
billion for programs supported by the Office of Energy Research (OER). 
The following testimony will highlight research supported by the 
Division of Energy Biosciences in the Office of Basic Energy Sciences 
(BES), and the Health and Environmental Research Programs (OHER) within 
the OER as well as programs in the Office of Industrial Technologies, 
such as Energy Efficiency and Renewables (EE). Federal investment in 
these programs today will help to maintain future U.S. scientific 
leadership.
    The ASM strongly supports the inclusion of basic science programs 
within the DOE. While relatively small in terms of the overall DOE 
appropriation, these programs produce important fundamental discoveries 
that provide the foundation for subsequent developments in 
biotechnology related to energy and the environment.
    Many of the DOE scientific research programs share the goal of 
producing and conserving energy in environmentally responsible ways. 
Areas of research include basic research projects in microbiology as 
well as extensive development of microbiological systems to produce 
alternative fuels and chemicals, to recover fossil fuels, to improve 
the refinement process of fossil fuels, to remediate environmental 
problems and to reduce wastes and pollution.
    It is imperative for the United States to maintain a strong science 
budget that supports basic research. Although the benefits from basic 
research are not always immediately obvious, the United States must 
invest in both basic and applied science, which are interdependent, as 
well as in programs that bridge the gap between the two.
    The Administration's requested funding level for the Office of 
Basic Energy Sciences is $661.2 million for fiscal year 1998. This 
funding level is an $11.5 million increase over last year. BES funds 
important microbiological basic research programs through the Energy 
Biosciences Division. In fact, about one fifth of all BES funds go 
directly to support research at academic institutions across the 
nation. For fiscal year 1998, the President's budget proposal has level 
funded the Energy Biosciences Division within the BES at a level of 
about $26 million. This program focuses on research in both 
microbiological and plant sciences. The exciting research supported by 
DOE's Energy Biosciences will lead to new discoveries in producing 
energy without risking our environment and finding effective methods of 
cleaning up existing contamination.
    The ASM continues to be concerned about the adequacy of funding for 
basic research supported by the DOE's Energy Biosciences Division. We 
urge Congress to increase basic research funding for the Energy 
Biosciences, and at least to offset the effect of inflation. Further 
erosion of funding for this program will have a deleterious effect on 
important biotechnology and energy-related research and on the future 
entry of scientists in this critical area of research.
    Important microbiological research is also supported by the Office 
of Health and Environmental Research through their Biological and 
Environmental Research Program (BER). The Administration's budget 
proposal includes $376.7 million for BER in fiscal year 1998, about 
$5.5 million less than last year's funding level. The BER supports 
research in the following divisions: Basic Life Sciences, Health 
Effects, Medical Applications and Biophysical Research, and 
Environmental Sciences Research. The BER is charged with developing 
advanced technologies that will improve medical care, public health, 
and worker safety while achieving a fundamental understanding of 
several biological and environmental components and processes.
    The Administration has proposed $157 million for the Basic Life 
Sciences subprogram of the BER in fiscal year 1998. The Basic Life 
Sciences subprogram supports research to learn the molecular structure 
of important biological molecules to assist in the efficient removal of 
environmental contaminants. This important program helps to determine 
the DOE's future biotechnology needs including applications in energy 
development, use and cleanup.
    Within the Basic Life Sciences subprogram is the Human Genome 
Program (HGP), which is jointly administered by the National Institutes 
of Health (NIH) and the DOE. The ultimate goal of the HGP is to 
decipher all three billion DNA subunits that make up the genetic code 
within each human cell. The benefits to human health from this program 
will be unmeasurable. Additionally, the HGP supports two major genome 
databases available throughout the scientific community. The Genome 
Data Base at the Johns Hopkins University and the Genome Sequence Data 
Base in Santa Fe, New Mexico, help to make important discoveries 
accessible to scientists and they promote wide access to current 
research results from the biological and environmental sciences. 
Increased availability and access to information in these data bases 
are important to the scientific peer review process, and will pave the 
road to many new discoveries in the future. The Administration included 
$85.1 million for the HGP in its fiscal year 1998 budget proposal, in 
addition to the $205.2 million from the NIH. The ASM fully supports 
this increase.
    In 1994, the OHER began the Microbial Genome Program (MGP) as a 
complement to the DOE Human Genome Program. This program would receive 
about $7 million for fiscal year 1998, about $2 million more than last 
year. The MGP is at the cutting edge of microbiological research. Just 
last year, researchers supported by the MGP announced the complete 
sequencing of the genome of a methane-producing microbe that lives 
8,000 feet deep in ocean thermal vents. This microbe (Methanococcus 
jannaschii) converts inorganic material into methane. More than two 
thirds of the genes of this microorganism are radically different from 
any previously sequenced. This has great significance in terms of 
understanding microbial evolution and the potential for 
biotechnological developments based upon novel microbial genomes and 
metabolic activities. Similar research has discovered other microbes 
living in other extreme conditions, such as in areas with high levels 
of radioactivity and the bottom of oil wells.
    As scientists learn more about the microorganisms that live in 
these extreme conditions, they learn more about how to develop newer, 
cleaner forms of energy and technologies to clean up the waste 
associated with energy production and consumption. The DOE has 
installed the necessary peer review and advisory program to the MGP to 
ensure that the microorganisms selected for sequencing will yield the 
greatest scientific informational benefits and that the research is of 
the highest quality. The ASM believes that even greater benefits would 
be achieved if the program were funded at a level of $10 million and 
urges this Subcommittee to consider adding funds for an expanded 
Microbial Genome Project.
    The DOE plans to expand its research into microbial diversity, and 
will begin sequencing the genomes of bioremediative microorganisms. Due 
to a scientific technique called sequence leveraging, a practice of 
using previously sequenced microbes to build the sequences of similar 
non-sequenced microbes, the results of these initiatives will be more 
readily available to other scientists, through the use of databases. 
This will aid scientists in their research into new biotechnologies 
such as Bioremediation, a technology which emerged during the Exxon 
Valdez cleanup as a cost-effective way of eliminating pollutants.
    Included in the Administration's fiscal year 1998 budget request is 
$66.4 million for Environmental Remediation, of which about $28 million 
is targeted for Bioremediation Research, about $6.8 million more than 
the fiscal year 1997 funding level. The ASM fully supports this 
increased funding level and urges Congress to sustain it.
    Bioremediation scientists are searching for cost-effective 
technologies to improve current remediation methods to clean up DOE's 
contaminated sites. New research in this area is supported by the 
Natural and Accelerated Bioremediation Research Program (NABIR) which 
will lead to new discoveries into reliable methods of Bioremediation of 
metals and radionuclides as well as organic pollutants in soils and 
groundwater. For fiscal year 1998, the Administration proposed $19 
million to fund the NABIR program, this includes funds for the 
establishment of one or more field research centers and funds for some 
subsurface exploring. The NABIR program will move into real world field 
research in 1998 that will determine the practical applications of 
Bioremediation for cost-effective cleanup of pollutants at DOE sites. 
This is a critical phase of this program. The level of requested funds 
will permit research at one contaminated field site.
    The ASM strongly recommends an additional $5 million be allocated 
to this effort with the aim of ensuring that two field research sites 
be established that span the breadth of pollution problems faced by the 
sites managed by the DOE and others.
    Other exciting new microbiological research supported by BER, is 
the Biotechnological Investigations--Ocean Margin Program (BI-OMP). 
This program is the second phase of the full Ocean Margin Program, and 
will look into the effects global change has on marine microbes. The 
findings from this program will be crucial to understanding the 
responses of marine biological systems to changes in their 
environments.
    In addition to the Offices of Basic Energy Sciences and Health and 
Environmental Research, the DOE supports other important 
microbiological research in the Office of Energy Efficiency and 
Renewable Energy (EE). About $1.8 million of the proposed $15 million 
for the Hydrogen Program will support research into the production of 
biohydrogen for use in utility, transportation and industrial 
applications. Additionally, the transportation biofuels program 
supports microbiological research into the production of ethanol to 
reduce the United States' dependency on oil imports. This program is 
funded at $27.7 million for fiscal year 1997 and is proposed to receive 
a $12.4 million increase for fiscal year 1998.
    The Office of Energy Efficiency and Renewable Energy has been known 
for supporting bridging research such as the Energy Conversion and 
Utilization Technologies Program (ECUT) and the Advanced Industrial 
Concepts Division, both of which have been eliminated. Bridging 
research provides an important stepping stone or a ``bridge'' that 
links basic to the applied sciences. Two microbiological EE programs 
have been eliminated for fiscal year 1998 in the President's budget 
proposal. Alternative Feedstocks and Bioprocessing have been zeroed out 
for fiscal year 1998. These programs provide important microbiological 
research that supports the U.S. paper, chemical, petroleum and 
agriculture industries. It is important that the DOE continue its 
commitment to programs that bridge the gap between the basic and 
applied sciences.
    There is an ever growing gap between the basic research programs 
that can take several decades to build a fundamental science base for 
energy and environmental development and the final application phases 
that may only take a few months or years. This gap needs to remain 
crossable so that basic research can be converted into real world 
applications. A modest program that manages the bridge between basic 
research and real world problem solving must receive continuing 
support.
    Finally, the ASM wishes to express continued concern over the 
proposals to eliminate the Department of Energy and its research 
programs. Thankfully these proposals have not been successful. While 
this is a period of budget constraints, the United States must maintain 
its commitment to develop cost-effective environmentally sound 
technologies to clean up contaminated sites. Additionally, the DOE's 
research programs help to keep the United States at the forefront of 
scientific discovery and competitive in the world marketplace. Japan 
for example has an aggressive effort to develop hydrogen as an 
alternate fuel source. The DOE's Hydrogen Program if successful will 
produce an environmentally friendly fuel that could reverse global 
warming and revolutionize the automotive and fuels industries while 
freeing America from dependency on foreign oil. The ASM encourages 
Congress to maintain its commitment to the Department of Energy 
research programs to maintain the United States' leadership in these 
vital industries and continue our commitment to a strong basic science 
program.
    Thank you for this opportunity to provide testimony in support of 
the DOE basic life sciences programs. The ASM hopes that its 
recommendations will be useful to the Subcommittee. We would be pleased 
to respond to any questions from the Subcommittee.
                                 ______
                                 
   Prepared Statement of C. Paul Robinson, Director, Sandia National 
                              Laboratories
                              introduction
    Mr. Chairman and distinguished members of the committee, thank you 
for the opportunity to testify today. I am Paul Robinson, director of 
Sandia National Laboratories. Sandia is managed and operated for the 
United States Department of Energy (DOE) by Sandia Corporation, a 
subsidiary of the Lockheed Martin Corporation.
Laboratory Missions
    Sandia is the DOE laboratory responsible for the ordnance 
engineering for all U.S. nuclear weapons. Our responsibilities comprise 
the design, certification, and assessment of the non-nuclear subsystems 
of nuclear weapons, including arming, fuzing, and firing; safety, 
security, reliability, and use-control; issues associated with the 
production and dismantlement of nuclear weapons; and surveillance and 
support of weapons in stockpile. We also perform substantial work in 
programs that are closely associated with nuclear weapon research and 
development, including nuclear intelligence, nonproliferation, and 
treaty verification technologies.
    We are, however, a multi-mission laboratory. Ten percent of our 
work supports DOE's responsibilities for environmental remediation and 
waste management, and another ten percent supports Department missions 
in energy science, research, and development. When appropriate, we also 
perform work for other government agencies, particularly the Department 
of Defense, in programs where our unique capabilities, built to support 
DOE's Defense Programs responsibilities, can be of value. Increasingly, 
we are being called on to support other federal agencies, such as the 
FBI and the National Institutes of Justice, in developing advanced 
technology for combating terrorism and criminal activity and to enhance 
the effectiveness of law enforcement. An example of our ability to 
support key national concerns is a walk-through explosives detection 
portal for airport screening, developed for the Federal Aviation 
Administration. It has achieved 1,000 times better sensitivity at lower 
cost and reduced size, and could dramatically reduce the threat to 
civil aviation when transferred to operational use.
Major Topics Addressed in This Statement
    My testimony today will largely be devoted to the stewardship of 
the nuclear weapons stockpile. The challenges of stockpile stewardship 
are formidable, particularly now that there are no new weapon designs 
in the offing and we are constrained from nuclear testing by treaty. In 
addition, there seems to be widespread indifference or opposition 
toward nuclear issues in policy circles today. But the nuclear weapons 
stockpile remains extremely important, and we take our responsibilities 
in this arena very seriously. We believe that the presence of nuclear 
weapons has changed the history of the world for the better. The 
awesome destructive power of nuclear weapons and the extreme 
difficulties in countering or protecting against their force has 
rendered the possibility of war between major nations extremely remote. 
The deterrence which nuclear weapons have provided for more than fifty 
years was the dominant factor preventing the Cold War from becoming 
``hot'' and allowed the world to enjoy the most peaceful period of the 
century. The United States must depend on its stockpile of nuclear 
weapons to prevent major wars for the foreseeable future.
    We in the nuclear weapon laboratories serve as the Nation's 
conscience for the technical integrity of that stockpile. It is our 
responsibility to maintain a safe and reliable stockpile over the long 
term and to bring difficult issues associated with that mission to your 
attention. The stockpile stewardship program faces several major 
challenges-some of which are urgent-which I will describe later in this 
statement. But first, I would like to report how the Department of 
Energy has assessed Sandia's performance over the past year, as well as 
discuss some of the contributions we and our parent company make to the 
community. Then I will describe some very significant achievements by 
Sandia in the area of stockpile stewardship and national security 
during the last year. I will also discuss some highlights of our 
current stockpile support work and report on our activities with the 
former Soviet Union (FSU).
Laboratory Performance
    I am pleased to be able to report that, under Lockheed Martin's 
management, Sandia's overall performance rating by DOE for fiscal year 
1996 resulted in the highest rating, ``outstanding.'' This appraisal 
was based on a new performance-based approach, with objectives and 
measures in four areas: laboratory management, programmatic science and 
technology, operational support, and management and administration. As 
stated by DOE:
  --Sandia is to be commended for the increase over fiscal year 1995 in 
        the number of areas that received the highest rating of 
        Outstanding. Specifically, in the programmatic performance 
        area, which under the new process received a greater emphasis, 
        representing 50 percent of the total appraisal, Sandia was 
        rated Outstanding based on inputs from DOE AL and DOE 
        Headquarters. We are pleased but not satisfied with our score, 
        and we will work even harder in the current year to sustain 
        this high rating and realize improvements in the few areas 
        where performance can be enhanced.
    We have also improved our relationships with industry and the 
community-a cultural change that I attribute to the emphasis Lockheed 
Martin places on being good corporate citizens through community 
involvement and partnering. We recently celebrated our one-thousandth 
technology assistance project under DOE's Small-Business Initiative, in 
which the Laboratories helped solve specific, short-term technical 
problems with small or medium-sized businesses. Lockheed Martin 
established a small not-for-profit corporation, independent of Sandia, 
called the Technology Ventures Corporation, to facilitate technology 
transfer from the Laboratories to industry. In the last four years, it 
has helped create 18 new businesses-almost all of them start-ups based 
on technology licensed from our laboratory-and nearly 600 new jobs.
    In addition, Lockheed Martin has teamed up with Sandia on a number 
of initiatives to aid the local community and has encouraged greater 
involvement and support of charitable endeavors. From its own 
resources, it has generously supported quality-of-life projects in the 
community, such as the biological park and aquarium in Albuquerque, a 
mathematics and science academy, several scholarship programs, and a 
recent donation to the New Mexico Museum of Natural History and 
Science. In California, where Sandia also operates a major a laboratory 
facility, it has helped support the local women's shelter, a children's 
theater workshop, and science and math educational programs. In 
aggregate, Lockheed Martin's contributions to the community are on the 
order of several million dollars a year and represent a sizable portion 
of their operating fee.
                    significant recent achievements
B61 Bomb Modification 11
    For twenty years we have known that there was a need to replace the 
B53 thermonuclear bomb with a system equipped with modern surety 
features. Yet, replacement was repeatedly postponed. Today, I am very 
pleased to report that we have begun the replacement of the B53 without 
designing a new weapon and are bringing the replacement on-line in 
record time with only a very modest budget.
    On November 20, 1996, Modification 11 of the B61 bomb passed its 
certification flight tests. All electrical and mechanical interfaces 
performed as expected. In December, four complete retrofit kits were 
delivered to the Air Force, two weeks ahead of schedule. This delivery 
met the milestone to support Mod. 11 conversions in the field by a 
joint DOE/DOD team in January. The B61 Mod. 11 has been accepted as a 
``limited stockpile item'' pending additional tests during 1997.
    Work on the B61-11 had been authorized in August 1995, with a 
requested delivery date of December 31, 1996. This schedule required 
one of the most efficient development efforts in our laboratory's 
history. The retrofit involved repackaging the B61-7 into a new, one-
piece, earth-penetrating steel case designed by Sandia.
    The Mod. 11 will now permit us to retire the B53, which is a 35-
year-old weapon, and provide the operational military with a safer, 
more secure, and flexible system. This program establishes one route to 
keeping the stockpile modern.
World Record in Pulsed Power
    We have a responsibility, in accordance with DOD requirements, to 
certify the survivability of weapon systems in radiation environments. 
In the absence of nuclear testing, we must rely on aboveground 
experimental facilities which we are developing, along with more 
sophisticated computational models and techniques, for predicting the 
effects of radiation on electronics and materials.
    We are making good progress toward a driver for a high-yield 
laboratory microfusion capability that can support both the weapon 
effects and weapons physics concerns associated with stockpile 
stewardship at relatively low cost. Sandia's Saturn and PBFA-Z 
accelerators, using Z-pinch technology, are producing record x-ray 
outputs. Last fall, PBFA-Z achieved an x-ray power output level of 160 
trillion watts, releasing 1.8 million joules of x-ray energy. This 
output doubled the previous record for x-ray power and quadrupled the 
record x-ray energy level which had been achieved on Saturn just last 
spring.
    For many years, our long-range plans have proposed the construction 
of a larger accelerator called Jupiter to further reduce our dependency 
on underground testing. Based on the extraordinary results of our 
recent experiments on PBFA-Z and our calculations, we now believe that 
a machine the size of Jupiter will probably not be necessary to achieve 
the experimental conditions required for stockpile stewardship. A 
smaller, less expensive accelerator called X-1 can do the job by 
creating a high-temperature, long-duration x-ray environment in a 
large-volume hohlraum. Presently, such a combination of characteristics 
is achievable only with a nuclear explosion. X-1 provides an extremely 
adaptable platform for weapon physics and weapon effects experiments.
    While the site selection process for X-1 has not been initiated, 
the Nevada Test Site (NTS) is a primary candidate for locating X-1 for 
a number of reasons. As you know, NTS is required to maintain the 
capability to resume underground nuclear testing if international 
conditions should make that step necessary. However, as Edward Gibbon 
observed in his History of the Decline and Fall of the Roman Empire, 
``All that is human must retrograde if it does not advance.'' Our 
experimentalists, including those in Nevada who used to prepare the 
diagnostic instrumentation for tests, must be challenged with real 
work, or we cannot expect them to preserve their skills.
    Fortunately, the instrumentation expertise required for measuring 
the outputs of underground nuclear tests is compatible with the 
diagnostic skills that will be required for operation of X-1. X-1 
supports the readiness program for nuclear testing by exercising the 
skills of our experimentalists with real work. In addition, NTS is a 
convenient central location for a National facility that can be 
accessed by all three Defense Programs laboratories, and it has a well-
developed infrastructure to support large-scale experimental 
facilities. It also has an Environmental Impact Statement (EIS) in 
place that permits experimentation with the radioactive products which 
will be generated by microfusion outputs.
World Record in Computing
    In December, Sandia and the Intel Corporation shattered the world 
computational speed record by sustaining over one trillion floating-
point operations per second (one teraflop). This accomplishment was 
recently characterized by Defense Programs' Deputy Assistant Secretary 
for Strategic Computing and Simulation as ``the single biggest computer 
science achievement in two decades.'' The event brought the speed 
record home to the United States again, following operation of a 
Japanese computer which had bested the previous U.S. performance. This 
work was performed under DOE's Accelerated Strategic Computing 
Initiative (ASCI) sponsored by the Assistant Secretary for Defense 
Programs. ASCI seeks to hasten the development of computers capable of 
10's to 100's of teraflops. Machines of this size will be required for 
stockpile stewardship in the absence of nuclear testing and with 
reduced reliance on expensive physical testing. ASCI will also develop 
a new generation of full-physics, three-dimensional computer simulation 
tools to support simulation-based life-cycle engineering. These tools 
will be developed in collaboration with U.S. research universities and 
computing firms.
    The new record was set on the ASCI Option Red supercomputer, 
designed by Intel and Sandia. When optimized, this machine will have 
ten times the memory (nearly 600 billion bytes) and ten times the speed 
(over 1.8 trillion operations per second) of the largest computers in 
use today. Now being installed at Sandia, it will immediately be used 
in safety, aging, and nuclear performance studies for real stockpile 
problems that we are dealing with. For example, we recently performed a 
series of calculations on Option Red to help us redesign neutron 
generators, which are critical components in nuclear weapons. 
Comparable calculations would be infeasible on the best commercial 
supercomputers, and the required experimental facilities to explore 
these regimes and to validate design performance are simply unavailable 
or unaffordable. The Option Red computer will be used by all three 
Defense Programs laboratories to develop and test the software models 
needed for science-based stockpile stewardship.
Synthetic Aperture Radar
    Sandia has refined synthetic aperture radar (SAR) technology for a 
wide variety of treaty verification and nonproliferation applications. 
Synthetic aperture radar is a technique for integrating radar pulses to 
synthesize a high-resolution image. Although modern electronic 
navigational technology is good at determining aircraft position, small 
random movements of the aircraft can cause blurring and limit the 
practical resolution of SAR images, especially during bad weather.
    One of the spectacular results of Sandia's SAR research is that we 
have developed a robust solution to this image-resolution problem. Our 
techniques now make it possible for aircraft-based SAR to create images 
of ground terrain with fidelity to one square foot-in any kind of 
weather! Our researchers have also developed a technique to use SAR 
data to produce very accurate topographical maps, either from aircraft 
or satellites. This work has profound implications for treaty 
verification and nonproliferation activities, as well as military 
operations. These results are truly a remarkable feat of engineering. I 
am very pleased that DOE has recognized Sandia electrical engineer 
Charles ``Jack'' Jakowatz with the 1996 Ernest O. Lawrence Award, one 
of DOE's most distinguished prizes, for his achievements in advancing 
the technology of synthetic aperture radar. Jack's work and his 
personal success remind us of a central strength of DOE and its 
national security laboratories: They have the ability to anticipate and 
develop future technology needs and options which often prove, over 
time, to be critical to our national defense capabilities.
Warhead Dismantlement
    Several retired warhead systems have been successfully dismantled 
at the DOE Pantex Plant with support from Sandia and the other Defense 
Programs laboratories. The process of dismantling retired warheads is a 
complex and challenging undertaking. Substantial engineering support is 
required by the laboratories to design safe and environmentally sound 
procedures and special equipment for the work of the Pantex Plant. 
Research and development in support of dismantlement operations has 
involved materials scientists, experts in robotics and intelligent 
systems, design engineers, chemical engineers, production engineers, 
explosives experts, and many other specialists. It has been a teamwork 
effort for the Defense Programs laboratories and production agencies.
Nuclear Material Safeguards and Security
    Sandia has made significant contributions to nuclear material 
safeguards and security. We recently completed a personnel and material 
tracking system called PAMTRAK to protect sensitive material. It 
integrates proximity badges, weight and motion sensors, and video 
cameras with a computer that reports attempts to steal or divert 
material. It can also communicate with a site's other security systems. 
The system can reduce radiation exposure to workers and save money by 
reducing the frequency at which materials must be inventoried. Sandia 
also completed-on time and within budget-a prototype Safeguards 
Transporter (SGT). The SGT is the next-generation vehicle to carry 
high-value materials, not limited to nuclear weapons, with enhanced 
safety and security within the continental United States. The SGT may 
also find use in transporting chemical and biological toxins from DOD 
depots to final disposition. A successful nuclear explosive safety 
study was conducted in June 1996; final design review was completed in 
July 1996; and production has been authorized, with the first 
production unit (FPU) scheduled for December 1997.
    To facilitate inspections, Sandia developed special nuclear 
material containers that can be periodically opened and resealed with 
induction brazing without excessive embrittlement or erosion of the 
container alloy. The initial terms of the U.S./Russian Agreement on 
Safe and Secure Transportation and Storage of Nuclear Weapon Materials 
through the Provision of Fissile Material Containers of June, 1992, 
were satisfied with the shipment of 10,000 AT-400R containers to 
Russia. Sandia supplied the technical interface, design, development, 
and testing on this product on behalf of the Defense Special Weapons 
Agency (DSWA), which produces the containers and ships them to Russia. 
Approximately 14,000 containers are planned for shipment next year.
Neutron Generator Production and Support
    Sandia completed construction of its neutron generator 
manufacturing facility early in 1996, ahead of schedule and within 
budget. All shipments of recertified W76 neutron generators for the 
Navy have been completed as scheduled. Also, processing began for 
neutron generators returned from the field for re-acceptance and reuse. 
Sandia's neutron generator production responsibility is supported by 
the laboratory's research and development capabilities. We recently 
completed three-dimensional simulations and experimental correlation of 
the neutron generator standoff phenomenon for the Warhead Protection 
Program Pit Reuse Warhead. Simulations were completed using Sandia's 
PCTH hydrodynamic code on our Intel Paragon supercomputer. Experimental 
data were acquired from two primary hydrodynamic implosion tests 
conducted with Lawrence Livermore National Laboratory.
    Shock histories were acquired by special instrumentation located in 
critical positions throughout the warhead electrical system and the 
neutron generators, providing data for code validation. Through the use 
of advanced visualization capabilities, Sandia's system designers, 
analysts, and shock physicists developed an in-depth understanding of 
the complex 3-D explosion through which the neutron generators must 
survive.
              highlights of current stockpile support work
    Bomb Impact Optimization System (BIOS) Exploratory Program Sandia 
is largely responsible to the Department of Energy for all non-nuclear 
aspects of nuclear bomb design. Building on the success of the B61-11, 
we are examining changes to other B61 designs to add additional value 
to these systems for our military customers. One such effort is the 
Bomb Impact Optimization System (BIOS) program, in which Sandia is 
investigating the feasibility of modifying a B61 payload for use in a 
guided glide bomb for aircraft delivery against defended target 
complexes. This effort includes analysis, design, model fabrication and 
testing, and ground and flight testing of a functional prototype.
    This year, the BIOS program proved the effectiveness of concurrent 
engineering approaches when, for the first time at Sandia, the nose tip 
for the BIOS prototype was taken from concept to inspected, accepted 
flight component by means of a completely paperless process. The 
polycarbonate nose tip for the BIOS flight test program is a very 
complex shape requiring five-axis machining capability; yet, drawings 
were neither created nor needed. Solid models of the part were 
developed as computer files which were directly compatible with 
software for finite element analysis, numerically controlled machining, 
and even inspection. The process is proving to be so flexible and 
efficient that refinements to the part will be possible even as it is 
being machined, with no significant downtime.
    Quality Improvement Program for the B83 Bomb.--We are nearing 
completion on a quality improvement program for the B83 strategic bomb, 
which will extend the service life of this weapon. The third major 
milestone of the B83 Quality Improvement Program (QIP) was achieved 
when a B83-1 equipped with Alteration 750 was produced at Pantex and 
accepted by DOE in March 1996. Alt. 750 incorporates a dual-channel 
common radar into the B83-1 bomb. This unit was the first B83 bomb 
produced to include all the component improvements from the quality 
improvement program. Sandia engineers worked closely with production 
engineers at Pantex and Allied-Signal/Federal Manufacturing and 
Technology to ensure the successful transition of Alt. 750 from 
development to production.
    Enhanced Nuclear Detonation Safety.--Significant advances in 
enhanced nuclear detonation safety (ENDS) are being realized with the 
design and development of miniature firing set and stronglink 
subsystems. Prototype devices, ranging from complete firing systems to 
application-specific detonator safing devices, are being modeled and 
evaluated. Miniature machining, photolithographic (LIGA) semiconductor 
processes, and silicon micromachining are employed to fabricate these 
devices. These subsystems offer many opportunities to systems designers 
for miniaturization and for enhancing the safety, security, and 
reliability of retrofitted weapons.
Life-Extension Work
    Much of our current stockpile activity can be characterized as life 
extension work. With no new weapon developments planned for the 
foreseeable future, we are required to support the weapons currently in 
stockpile well beyond their designed service lives.
    A major undertaking in stockpile life extension work is the Dual 
Revalidation Program we are conducting with our sister Defense Programs 
laboratories, Los Alamos and Lawrence Livermore, under the joint 
sponsorship of the DOE Assistant Secretary for Defense Programs and the 
Assistant to the Secretary of Defense for Atomic Energy. This program 
examines and updates the design information for every weapon type in 
the stockpile, including its interface with the delivery system. Since 
we no longer have available the use of underground testing to validate 
design performance, the responsible laboratory team for each weapon 
will comprehensively examine the extant design data using the best 
design definition tools and methods available to us today. Any missing 
or incomplete elements in the documented design will be investigated 
and completed. The revised design data package of drawings, 
specifications, computer codes, and other documentation will then be 
given to a design team from a different laboratory for their critical 
review. In this way, two independent design teams will evaluate the 
design data package for each weapon in the enduring stockpile and 
ensure that it is complete and current with modern engineering 
standards, including the new computational engineering methods.
    The ongoing stockpile activities I have described here are part of 
our enduring responsibilities in stockpile stewardship and management. 
As you can see, Sandia's tasks require constant engineering support 
using exceptional and unique personnel and equipment.
             activities with the former soviet union (fsu)
    Since the early 1970's, Sandia has been the principal DOE 
laboratory responsible for developing technology, systems, and 
standards to protect nuclear weapons and materials at DOE facilities 
and during transportation. In particular, work at 72 facilities in the 
United States involved the actual implementation of protection systems. 
In addition to this DOE mission, Sandia has worked on protection of 
nuclear material and weapons at numerous facilities in 37 other 
countries.
    Since the breakup of the Soviet Union in 1991, the United States 
government-in particular, the Department of Energy national 
laboratories such as Sandia-have been working cooperatively with 
scientists and engineers in various institutes, laboratories, and other 
organizations within the countries of the former Soviet Union (FSU) to 
accelerate progress toward a common goal: to reduce the risk of nuclear 
weapon proliferation, including such threats as theft, diversion, and 
unauthorized possession of nuclear materials.
    Our International Security Program has worked toward this goal by 
supporting numerous projects in the FSU that help achieve the 
protection and security of nuclear material and facilities. 
Additionally, the cooperative interactions help to encourage the 
dismantlement of all types of weapons of mass destruction, to advance 
nonproliferation activities, to assist the FSU states in converting 
their defense-oriented capabilities to civilian, market-driven 
enterprises, and finally, to improve Western access to the world-class 
science and technology that exists within the FSU.
    A major goal of the International Security Program at Sandia is to 
achieve worldwide protection and control of nuclear materials and 
weapons. One major step toward realizing this goal is our work with the 
former Soviet Union on Material Protection, Control, and Accounting 
(MPC&A), discussed in detail below. In addition, other projects are 
underway, which contribute to this goal: Initiatives for Proliferation 
Prevention Program (IPP); Lab-to-Lab; Safe and Secure Dismantlement 
(SSD); and Safety and Security Technology.
Material Protection, Control, and Accounting (MPC&A)
    The MPC&A program for the former Soviet Union has two primary 
objectives.
  --Reduce the threat of nuclear proliferation by cooperating with 
        Russia, the newly independent states (NIS), and the Baltic 
        States to improve MPC&A for all weapon-usable nuclear material 
        in forms other than nuclear weapons.
  --Encourage the development of a technology-based nuclear safeguards 
        culture and the infrastructure to sustain such a culture in 
        Russia, the NIS, and the Baltic States.
    We have focused heavily on the first objective in the early phases 
of the program. We have had success at many FSU sites in jointly 
developing MPC&A plans, coordinating training workshops, improving 
existing MPC&A systems, and designing and installing several new MPC&A 
systems. We now have work underway at approximately 44 sites in the 
FSU. In Russia, we are engaged with sites ranging from the MINATOM 
Civilian Complex to the Naval Nuclear Fuel Sector and the MINATOM 
Defense Complex.
    We also have work underway to address the second program objective, 
to make an impact on the attitudes toward safeguards practices and to 
foster the development of a sustainable, technology-based, nuclear 
safeguards culture.
    Last year, Sandia had a lead role in completing physical protection 
upgrades and demonstrations of major technical importance in eight of 
the 44 selected facilities in the FSU. For example, work was completed 
on physical protection upgrades to a facility at Elektrostal and at the 
Kurchatov central storage facility, both in Russia.
    This year, upgrades have been completed in the five republics of 
Belarus, Georgia, Uzbekistan, Latvia, and Lithuania. All these states 
(except Lithuania) have nuclear research facilities that possess 
proliferation-sensitive nuclear material. Upgrade activities at these 
nuclear research facilities have included installation of intrusion 
detection sensors, video assessment cameras, central alarm stations, 
and hardening of nuclear material storage areas.
    Lithuania is the site of the Ignalina Nuclear Power Plant, which 
has two 1,500-megawatt power reactors similar to those at Chernobyl. 
Work at Ignalina has included improvements to a central alarm station 
and vehicle access portal. Personnel have received training on physical 
protection concepts, system operation, and maintenance. The MPC&A work 
there has included collaboration with other national laboratories and 
with experts from other nations, although Sandia performs the lead role 
in physical protection.
    Dedication ceremonies to commemorate completion of the physical 
protection upgrades at these facilities have been held and were well 
attended by local government officials and the appropriate U.S. 
ambassadors. Minor follow-on activities for this fiscal year are 
expected to include supplemental training and assistance in developing 
operational procedures and evaluations.
    Initiatives for Proliferation Prevention (IPP).--The Initiatives 
for Proliferation Prevention program (formerly the Industrial 
Partnership Program) provides a mechanism for scientists and engineers 
who have been supporting research and development on weapons of mass 
destruction in the newly independent states of the former Soviet Union 
to build careers in the burgeoning Russian civilian workplace. The 
program makes use of the capabilities resident in DOE's national 
laboratories and makes new technologies available for commercialization 
by U.S. and Russian industry. Sandia has 70 projects totaling $5.5 
million with over 40 participating institutions in the former Soviet 
Union. Forty-four have been completed, 26 are still active, and 
proposals for an additional 20 are awaiting approval. In addition, 
eight cooperative R&D agreements (CRADAs) with $4 million of DOE funds 
have been approved.
Lab-to-Lab Programs
    Lab-to-lab projects are science-driven, small R&D collaborations 
that are closely coupled to Sandia projects. A broad range of science 
and technology is involved, including nuclear power safety, 
environmental technologies, safety and risk assessment, innovative 
materials development, lasers, pulsed power, medical technologies, 
nonproliferation research, manufacturing technologies, energy, 
computation, and basic science topics.
    This effort is less formal than many other programs between the 
United States and former Soviet states. Since there are no bilateral 
agreements, implementation and progress can be achieved rapidly. In 
fact, it is this relatively quick return on our investment that is one 
of the most important positive features of the Lab-to-Lab program. 
Begun in 1992, it has served as a model for many other efforts, 
including the IPP projects and the MPC&A program mentioned above. 
Although less bureaucratically constrained than many other programs, 
all Lab-to-Lab projects are conducted with DOE approval and full 
coordination with the Department of State. They also comply with all 
export control regulations and other relevant restrictions.
    The individual projects included under this program emphasize 
science and technology and are usually of relatively small monetary 
value. The majority of these projects are conducted with Arzamas-16, 
Chelyabinsk-70, Kurchatov Institute, and Eleron, and involve such 
topics as pulsed power, computation, innovative materials development, 
and various medical technologies. They tend to have a strong linkage to 
existing Sandia projects and thus promote individual contacts and 
collaboration with a minimum of attendant bureaucracy. This encourages 
long-term association with our peers in the FSU institutes and expanded 
scientific and technological exchange, and furthers our efforts in 
nonproliferation.
    Safe and Secure Dismantlement (SSD).--Sandia receives funding and 
authority for specific SSD projects from the Department of Defense 
through the Department of Energy. Under this arrangement, we have 
provided various types of hardware and technical expertise related to: 
modifications to Russian nuclear-weapons-transporting railcars to 
enhance their safety and security; fissile material storage containers 
and storage facilities; flexible armor blankets to protect warheads 
from small-arms impacts; and different types of accident response 
equipment, such as the Portable Integrated Video System (PIVS). These 
projects will assist the Russian Federation by providing improved 
safety and security for their nuclear weapons and components.
    Safety and Security Technology.--Another important element of our 
efforts in the FSU relates to research projects in the broad area of 
safety and security technology. A significant number of the lab-to-lab 
contracts signed with the Russian nuclear weapon institutes [Arzamas-16 
(VNIIEF), Chelyabinsk-70 (VNIITF), and the Institute of Automatics 
(VNIIA)] are safety and security projects.
    It is in the mutual interest of the United States and Russia to 
share safety and security information that could reduce the risks and 
consequences of unintended actions with nuclear warheads and fissile 
material. Therefore, a government-to-government agreement that allows 
the controlled exchange of unclassified information in the field of 
nuclear warhead and fissile material safety and security between 
authorized representatives of the United States and the Russian 
Federation was signed by Secretary O'Leary and Minister Mikhailov. This 
program complements Department of Defense Nunn-Lugar work. The overall 
objective of the program is to increase the safety and security of 
nuclear warheads and fissile materials both in Russia and the United 
States through the coordinated exchange of technical information.
    Current safety and security projects relate mostly to safety, with 
some efforts relating to human factors engineering and transportation 
security systems. They all involve research that affects design, 
analysis, testing, and experimentation relevant to safety and security 
issues associated with events that can cause major consequences to the 
public (e.g., nuclear contamination or loss of life), but with low 
assessed probability of occurrence. Examples of specific projects 
include research on:
  --the dispersal effects of surrogate radioactive materials,
  --crash and fire effects to aircraft transporting hazardous 
        materials,
  --bullet and projectile penetrations through shipping containers,
  --rail car crashes and fires as well as other accident data for rail 
        and air transportation,
  --risk criteria for operations associated with hazardous materials,
  --probabilistic risk assessment methodology for high-consequence but 
        low-probability events,
  --analysis and tests of lightning hazard effects, and the design of 
        containers that withstand explosive detonations,
  --security systems for transportation tracking and monitoring, and
  --human factors engineering for hazardous systems.
              issues in the stockpile stewardship program
Maintaining Confidence in an Aging Stockpile
    One of the major long-term challenges we face is how to ensure the 
reliability of an aging stockpile. We oversee the stockpile to ensure 
that weapons continue to be reliable, that they are safe, and that they 
are upgraded as necessary to maintain their capabilities until they are 
retired. Unfortunately, we do not possess sufficient data on how 
reliability declines as systems get older than about twenty years. 
However, it is now our daunting task to ensure that systems remain 
reliable and safe for decades beyond their planned service lives.
    To do this job, we must scientifically understand the parameters of 
aging in electronics, materials, and structures in order to both 
anticipate failure paths and to provide for timely upgrades, 
replacements, and rebuilds. We are vigorously exploring ways of 
leveraging science to help meet our stockpile obligations in this 
regard.
    The age, size, and structure of the stockpile have undergone 
significant changes over the past few years, with important 
implications for maintaining the deterrent. With no new production 
planned, the average age of deployed stockpile weapons will inexorably 
increase. In addition, the stockpile will be much smaller at START II 
levels, making each of the remaining weapons more important to 
deterrence.
    In the past, the stockpile consisted of many weapons of many 
different weapon types. The size of the stockpile provided a 
substantial base from which to gather surveillance data. And the 
diversity of the stockpile provided an array of alternatives in the 
event of a problem with a particular weapon type. Less diversity in the 
stockpile raises the risk that a single repeated flaw, a ``common-mode 
failure,'' could compromise a significant portion of the deterrent. 
Moreover, today's weapon production complex has less capacity to 
rapidly correct a common-mode failure that might occur. The production 
complex also urgently needs modernization. These factors narrow the 
margin of error that can be tolerated in the remaining weapons and 
drive the need for much tighter stockpile surveillance.
    Sandia is addressing these concerns through several initiatives, 
including an Enhanced Surveillance Program (ESP), a program of 
fundamental research in materials aging, the study of the effects of 
aging in components and subsystems, and our augmentation of the 
computational resources needed to model and predict the effects of 
aging without resorting to destructive testing from the increasingly 
limited stockpile base.
    The Enhanced Surveillance Program is proceeding along three paths. 
First, by accumulating data from both accelerated aging experiments and 
dismantled weapons, Sandia is improving the capability to detect, 
measure, and predict the time-dependent phenomena of aging in materials 
and components. Certain phenomena serve as signatures that reveal 
degradation in materials and components. Thus, we are advancing our 
ability to use these ``signatures'' in assessing and even predicting 
aging degradation.
    Along a second path, we are integrating our empirical and 
theoretical work in materials science as a means of further 
accelerating the development of computational models of the actual 
behavior of aging components and subsystems. With our proposed Model 
Validation and System Certification Test Center (MVSCTC), we are 
pursuing a facilities and infrastructure modernization effort 
specifically designed to support the integration of empirical testing 
and theoretical understanding through computation.
    Finally, we are exploring sensors that can be built into weapons to 
constantly and automatically monitor the presence of the aforementioned 
``signatures'' of aging and degradation. With the goal of supporting a 
full system demonstration, we are developing communications techniques 
that will allow us to contact and monitor such sensors without 
dismantling or otherwise disrupting the weapon.
Stockpile Confidence Under the Test Ban
    Two years ago, the White House consulted with the directors of the 
Nation's three nuclear weapons laboratories (Los Alamos, Lawrence 
Livermore, and Sandia) as the President considered whether to pursue a 
comprehensive test ban treaty. We told the President that we felt we 
could meet the challenge of maintaining the Nation's nuclear deterrent 
under a comprehensive test ban if we pursued a long-range program of 
science-based stockpile stewardship. We said that we could not 
guarantee that this challenge would be met, but we pledged our very 
best efforts to this end. We emphasized that a continuing strong 
commitment to a science-based stockpile stewardship program would be 
essential if we were to have a chance to succeed. This commitment 
requires sufficient funds to support the core program for maintaining 
the stockpile as well as an investment in special facilities required 
to perform our work in the absence of underground nuclear tests.
    There are those who regard the nearly $4 billion budget for nuclear 
weapons as excessive and unwarranted. However, the costs of stockpile 
stewardship are not a linear function of stockpile size. A threshold 
capability will be needed to support the stockpile as long as it 
numbers in thousands, especially with the sophistication and demand for 
reliability that is associated with the systems upon which deterrence 
rests today. I believe we are near that threshold now, especially in 
light of the many closures and changes that have occurred in recent 
years. It is true that the stockpile is substantially smaller than it 
was ten years ago; but critics fail to calculate the avoided cost that 
would have been required to support the larger and more diverse 
stockpile of the past. A conservative analysis puts that cost at 50 
percent or more larger than today, for a budget of at least $6 billion, 
even without considering the additional costs of science-based 
stockpile stewardship arising from the test ban.
    We are often asked about the ``core'' activities within the weapons 
program. Indeed, some try to portray the core as a ``sandbox'' for 
laboratory scientists and engineers to play in-a characterization that 
is both incorrect and unfortunate. Rather, the core is the at the heart 
of the historical bond between the laboratories and the government in 
carrying out nuclear weapons research and development efforts. Through 
the core, our laboratories are accountable to the government to 
anticipate what the technical needs of the weapons program will be 
years in advance. The concept of core funding is what has enabled us to 
readjust priorities to meet urgent needs that may arise, such as was 
done for the B61-11, without coming back to the government for every 
extra dollar that is needed. The core is at the heart of a system that 
makes everyone at Sandia feel a personal responsibility and obligation 
for the performance of the stockpile, now and in the future, while 
never marginalizing the needs of our military customers. The core has 
also provided the support in which the remarkable synthetic aperture 
radar work, discussed earlier, could be conceived and realized. The 
core enabled past investments which have made it possible today for 
ASCI, enhanced surveillance, DAHRT, NIF, X-1, AHF, and other 
initiatives, to be realized in this unprecedented period where 
underground testing is no longer available.
    Today, I believe we face a near crisis in the core weapons program. 
Last year, our laboratory experienced a significant loss in funding for 
our core nuclear-weapon efforts, even after the plus-up in funding 
provided by Congress. A number of factors contributed to the reduction, 
and over the past two years we have had to eliminate 1,100 jobs across 
the laboratory. This year, we may again face the likelihood of more 
cuts, as a result of the laboratory allocations, particularly through 
continued erosion of the core program budgets as moneys are 
increasingly directed toward initiatives intended to address the 
absence of nuclear testing.
    At Sandia this year we have the fewest number of scientists and 
engineers in the weapons program than at any time since 1952. Yet, even 
with our greater understanding of the physics and technology of nuclear 
weapons, the current generation of weapons within the stockpile is 
extraordinarily more complex as compared with those of 1952. The deep 
cuts we have experienced over the past six years have resulted in the 
retirement of our most experienced experts. These reductions have also 
driven off some of those early in their careers, and they have limited 
our ability to hire new talent. We are not at all well-positioned to 
take further cuts at this time without losing essential ``muscle'' to 
carry out our important obligations in R&D and stockpile support. Our 
complex work is unique-there is no other quarter where we can obtain 
the experience base to carry out these weapon responsibilities.
    Several special facilities needed for the Defense Programs 
laboratories are also requested, including DHART (Dual-Axis 
Radiographic Hydrotest facility), NIF (National Ignition Facility), X-1 
Advanced Radiation Source, AHF (Advanced Hydrotest Facility), and ASCI 
(Accelerated Strategic Computing Initiative). These represent the first 
stage in a process of addressing to what extent we can replace the role 
of underground nuclear testing with laboratory experiments. I expect 
that as the process of science-based stockpile stewardship evolves, 
other facilities and upgrades will be conceived in the decades ahead to 
better simulate the environment and processes that occur during a 
nuclear explosion and do a better job of maintaining the science and 
technology of stockpile stewardship without testing.
    The essential question for managing the total program under the 
constraints of a substantially reduced budget (the program was cut in 
half over the previous six years) will be how to best balance the needs 
to support and maintain the stockpile itself-to maintain the essential 
skills needed to address the problems that can arise-while also 
creating new facilities to partially substitute for the loss of nuclear 
testing. I believe the present course we are pursuing-a continual 
reduction of an already depleted core weapons program-will be 
particularly destructive to the ability of Sandia to meet the challenge 
we promised the White House that we would undertake. Having served for 
much of my early career in leading the nuclear weapons efforts at one 
of the nuclear physics design laboratories, I can also express my doubt 
that the present funding can sustain their necessary core weapons 
capabilities while also financing their needed efforts in new facility 
initiatives. If no additional funds become available, I believe that it 
will be necessary to readdress the funding allocation to achieve a 
better balance between core and initiatives.
    In the view of our laboratory, the initiative to enhance 
supercomputing capabilities (ASCI, as described above) is not truly a 
``new initiative.'' Computational simulation has always been 
fundamental to carrying out our work effectively and economically, and 
we have consistently pursued advances in this field from our core 
program. Indeed, during the 1970's and early 80's, computer acquisition 
costs represented nearly the same share of our budget as they do today. 
The recent success we achieved in creating the first teraflop computer 
is the fruit that our core program funded over many years. It is vital 
that we continue to be able to model and simulate computationally the 
performance of all our systems and subsystems, and that we advance this 
capability to the point where their performance and aging can be 
predicted on a scientific basis.
Non-nuclear Stockpile Assurance Testing
    Stockpile evaluation activities involve both laboratory and flight 
tests of stockpiled weapons, as well as designing test equipment and 
monitoring test performances. Test results that identify deviations 
from weapon performance standards are thoroughly investigated and may 
result in repairs, retrofits, or recommendations for stockpile 
improvement programs.
    Joint tests of weapons in their delivery modes are performed in 
cooperation with the Department of Defense. We continue to be concerned 
about budgetary constraints and other complications that affect the 
ability of the laboratories and the military services to support the 
joint DOE/DOD Stockpile Surveillance program. An example of our 
concerns is the possible Air Force ICBM strategic missile testing 
shortfalls that could impact the reliability and credibility of W62, 
W78, and W87 warheads. Developments that hamper the ICBM nuclear 
warhead surveillance program include: moving from multiple to single 
reentry vehicle configurations while constrained by the same number of 
missile flights, thus reducing reentry vehicle flight opportunities; 
possibly eliminating Peacekeeper flight tests; and a reluctance to 
combine reentry vehicle and warhead telemetry tests.
    While this critical budget issue was solved last year (in great 
measure by the work of this committee) and flight support was 
reinstated for tactical nuclear bombs, a similar problem may be 
developing for all nuclear bombs, motivated by pressures to reduce 
national test range costs within a shrinking defense budget with many 
unmet needs. This is a long-term issue that must be continuously 
monitored.
    My concern over these issues is based on Sandia's half century of 
test experience with nuclear bombs and warheads. We have sized our 
stockpile surveillance program to yield results within significant 
parameters. This requires us to test eleven warheads per year of each 
of the nine types currently included in the surveillance program. 
Generally, two to four flight tests of each type are conducted jointly 
with the military, and eight laboratory tests (for a total of eleven) 
are conducted by Sandia at the Pantex plant. From a study of historical 
bomb and warhead data, we find that approximately 22 percent of the 
defects discovered in all tests are flight-unique; that is, if we don't 
flight test we will likely not see that portion of defects within the 
weapon system. Given the stringent reliability requirements that 
nuclear weapons must meet, we have determined that the minimum 
requirement for flight tests is in the range of two to four per year 
per weapon type.
    We believe that a nuclear warhead assurance program that does not 
perform flight tests, or performs fewer flight tests than the minimum 
required, would lack a credible basis for evaluating system 
reliability. The credibility of reliability testing diminishes as the 
number of flight tests decreases. Erosion of credibility in our 
reliability test program is serious, and would directly undercut the 
maintenance of confidence in the stockpile as well as the reliability 
prediction that STRATCOM uses to develop our deterrent plans. I urge 
you to assure that funding to support the joint flight test 
capabilities is maintained at an adequate level.
Maintaining Design and Production Capabilities
    All weapons now in stockpile will reach the end of their design 
lifetimes over the next two decades. With the passage of time, many 
materials and methods that were used in the original production runs 
are no longer available. In some cases, original materials and 
technologies have become commercially obsolete. We cannot simply 
reproduce replica components of outdated technologies and designs. 
Maintaining the ability to design, develop, certify, and either produce 
or procure updated materials and components is vital to ensuring the 
long-term reliability of the stockpile.
    Most components of nuclear weapons are subject to normal aging and 
must eventually be replaced. The requirement to replace these weapons 
or their components will create a backlog of work that will need to be 
addressed early in the next century.
    Sandia has used a systematic replacement planning tool known as the 
Stockpile Block Upgrade Plan. While primarily driven by the need to 
replace limited-life components, the Stockpile Block Upgrade approach 
also upgraded the technological currency of components and helped 
maintain a consistent production workload free from peaks and valleys. 
The original Stockpile Block Upgrade Plan has evolved into the broader 
Stockpile Life Extension Program (SLEP) which DOE is now using for 
limited-life component exchanges and systematic upgrades in blocks of 
related subsystems.
    It should be emphasized that the nuclear weapons program requires 
an intimate relationship between the laboratories, where the technology 
is developed, and the production plants that manufacture nuclear 
weapons. Sandia works closely with DOE's production agencies. We design 
or specify nearly all of the non-nuclear components of nuclear 
warheads. We support the production engineers at Allied Signal, Kansas 
City Division, who are responsible for manufacturing many of our 
components, and the engineers at the Pantex Plant in Amarillo, where 
warheads and bombs are assembled or disassembled. We also produce a 
limited number of two kinds of components in-house, as a result of 
plant closures in the DOE complex. We have the additional assignment 
for manufacturing development engineering of twelve other weapon 
component technologies, for which we are DOE's production agent. We are 
working closely with commercial industry to develop new suppliers for 
these components.
    For a variety of security, business, or technical reasons, it is 
impractical to rely on industry for all the components required for 
nuclear weapons. This is particularly true for components that are 
produced in low quantities and are unique to nuclear weapons. 
Consequently, DOE must retain an in-house manufacturing capability for 
some components. To most effectively use these capabilities, new or 
improved processes and materials are being developed to enhance 
efficiency and minimize wastes, environmental impacts, and cost, and 
provide greater worker safety.
    In my view, we will someday have to supplant our old weapons with 
replacement systems; we cannot extend their service lives indefinitely. 
But replacing systems with exact replicas would not be technologically 
feasible, cost-effective, or sensible. New designs for components and 
subsystems will continue to be needed, and that requirement will demand 
that we maintain all the original competencies necessary for component 
designs, as well as contemporary capabilities in advancing technology. 
This can be easily understood by the fact that electronic components 
that are available today bear little resemblance to those used in 
weapons that are even a few years old. For example, a substantial 
portion of the components within the Trident II warhead, our most 
modern system, have already become ``sunset'' technologies (i.e., they 
are no longer available from suppliers).
    Similarly, scientists and engineers must advance their thinking as 
the state-of-the-art in technology advances. Those who suggest that we 
can simply remanufacture warheads without any changes have little 
understanding of the impossibility of such a quest. While the portions 
which contain special nuclear materials are unlikely to be changed from 
designs previously tested and proven, the balance of the weapons (which 
is predominately Sandia's responsibility) can and should be modernized 
to achieve even higher levels of performance in safety, security, use 
control, and overall system reliability.
    The engineers and scientists who must perform the design and 
production engineering for nuclear weapons in the next century will not 
have had the benefit of experience on full-scale weapon development 
programs. We must find ways to qualify these people in the future. They 
need to work on real systems. We cannot expect our engineers to acquire 
critical design skills merely by performing piecemeal component 
replacement work and development simulations. They have to design whole 
systems with real deliverables to fully develop their capabilities.
    Ideally, we would like to train our junior weapon design engineers 
alongside experienced engineers, but this will not be possible during a 
decades-long hiatus of no weapon developments. In the past, Congress 
has noted its concern whether the key skills and essential knowledge 
for continuing a strong nuclear weapons program are being maintained. I 
want you to know that Sandia has assigned this area a very high 
priority. More than three years ago, Sandia began a program in 
knowledge preservation as one element of that stewardship. We have now 
recorded a few thousand hours of experience from weapons experts, 
individually and in teams, who have retired within the past few years 
or who are planning to retire soon. These records are maintained in a 
classified information network formatted to provide instant query and 
retrieval.
    We have also developed an extensive set of course offerings unique 
to nuclear weapons science and engineering, and we are developing a 
formal process this year for training and certifying tomorrow's 
experts. When you consider that forty years is the extent of an average 
career, our people and their expertise are the most limited-life 
components of the stockpile stewardship effort.
Supply of Radiation-Hardened Microelectronics
    This committee should be aware of a serious problem we are facing 
with respect to assuring the supply of radiation-hardened 
microelectronic components in the long term. This is a critically 
important issue in stockpile stewardship.
    Microelectronic circuits can be damaged or destroyed by radiation. 
It is for this reason that electronic components in satellites, for 
example, are specially designed to withstand the effects of cosmic 
radiation. Circuits in nuclear weapons must be hardened against the 
much more intense radiation fluxes that would be encountered in 
proximity to nuclear blasts of a nuclear exchange. This design 
criterion has not gone away with the end of the Cold War. STRATCOM has 
revalidated its hardening requirements for strategic systems. As you 
know, Russia recently abandoned its previously declared no-first-use 
policy for its nuclear weapons.
    Similarly, radiation-hardened microelectronic components are 
important for many tactical, non-nuclear weapon systems that could 
encounter radiation under battle conditions. Consequently, the 
capability to design and produce ``rad-hard'' integrated circuits is of 
great importance to our Nation's defense.
    Unfortunately, commercial, off-the-shelf microelectronic 
technologies are not designed to withstand radiation, and in most cases 
they cannot be shielded effectively to protect them from damage. In 
fact, as commercial integrated circuits (ICs) evolve toward ever-
smaller feature sizes, they will become even less suitable for defense 
or space applications that may be susceptible to radiation.
    The problem is economic: The market for radiation-hardened 
integrated circuits has become so small relative to the burgeoning 
market for commercial ICs that it holds little interest for industry. 
Less than one tenth of one percent of integrated-circuit production is 
rad-hard. The requirement for radiation-resistant integrated circuits 
is expected to remain fairly constant at roughly $100 million to $150 
million per year for the next decade. This is a drop in the bucket in 
contrast to the market for commercial integrated circuits, which is 
forecast by the Semiconductor Industry Association to exceed $300 
billion by 2000!
    Production of radiation-hardened integrated circuits requires 
special designs and strictly controlled, nonstandard manufacturing. 
Most integrated-circuit manufacturers are simply not interested in 
diverting highly profitable resources to nonstandard and limited-volume 
design and production of radiation-hardened microelectronics.
    This reluctance is reflected in the declining number of vendors 
responding to Sandia's requests for quotation (RFQs) over the past 
eight years. Motorola, LSI Logic, United Technologies, RCA, GE, AT&T, 
and Texas Instruments have quit the rad-hard digital IC business. Only 
Honeywell and Lockheed Martin Federal Systems (formerly Loral) remain. 
Only one vendor of rad-hard non-volatile memories remains: Grumman-
Northrop. No vendors exist for new designs for rad-hard analog circuits 
needed to interface sensors and actuators to digital controllers.
    The government's fallback position for production of critical 
radiation-hardened integrated circuits for nuclear weapons is DOE's 
Microelectronics Development Laboratory at Sandia National 
Laboratories. For more than two decades, Sandia has conducted research 
to advance rad-hard IC technology. As a general rule, the results of 
this research have been made available to the private sector to support 
industrial production of government IC requirements. In addition, 
Sandia has produced rad-hard microelectronics parts in-house for 
special government applications where production lots were too small to 
be economic for industry.
    DOE and Sandia have proposed a National Defense Electronics 
Partnership with DOD for the purpose of preserving the R&D base and 
industrial production capability for radiation-hardened integrated 
circuits. It is too early to tell whether this proposal will come to 
fruition. In any case, it is important to adequately maintain the rad-
hard capability at Sandia. Bear in mind that radiation-hardened 
microelectronics must also constantly play catch-up with the rapid pace 
of development in commercial microelectronic components (see the 
discussion in the previous section about the necessity to modernize 
components). This task requires a robust R&D capability and a modest 
production capability in the national laboratory system, and Sandia is 
the only place where such capability exists. We continue to work with 
DOE and DOD to ensure that a minimum level of funding is provided to 
maintain this capability.
                         summary and conclusion
    I have described some very significant achievements that Sandia has 
realized during the last year, particularly our world records in pulsed 
power and computing. However, our overarching mission is to support the 
Nation's nuclear weapons stockpile, both in its current requirements 
and for the long term. Our scientific achievements are always performed 
with that mission in mind, and not for their own sake.
    I have also described some of the highlights of our ongoing 
stockpile stewardship work and our interactions with the former Soviet 
Union. This work stems from the engineering technology base that 
maintains and ensures the safety, security, and long-term reliability 
of the enduring stockpile. As we augment the Stockpile Stewardship 
program with new capabilities and facilities for science-based 
stewardship, it will be important not to diminish the engineering 
technology base that supports component design and production now and 
for the future.
    I discussed a number of the major issues that we face as 
significant challenges. Sandia's cradle-to-grave responsibilities 
require stable funding for a robust engineering technology base, a 
modern and efficient laboratory infrastructure, and the essential human 
talent that can maintain competency in both established and emerging 
weapon technologies.
    While I support the approach and structure of the Science-Based 
Stockpile Stewardship Plan, the currently proposed budget presents 
significant challenges for our laboratory. I believe that with proper 
funding, the Science-Based Stockpile Stewardship Plan is the route to 
success in maintaining a stockpile whose quality is second to none. 
However, without proper funding, we will ultimately face a tough 
choice: Shall we adequately support the people and skills that are 
essential to sustained stewardship, or those that are required for 
developing and operating the new initiatives in science-based stockpile 
stewardship?
    It would be regrettable to have to once again rebalance the 
objectives in the overall program between the core weapons activities 
and the new initiatives to find substitutes for testing; but a tradeoff 
between preserving irreplaceable expertise or ``bricks and mortar'' for 
the future would indeed be a Hobson's choice. The Stockpile Stewardship 
Program must be prudently managed to provide for our technology base 
needs; and we must also find a way to fund the strategic investments 
required for science-based stockpile stewardship at a pace that will 
bring them into useful service to support the program before we face a 
crisis within a critical weapon system in the existing stockpile. I 
fear that time is not on our side.
                                 ______
                                 

  LOWER MISSISSIPPI RIVER VALLEY FLOOD CONTROL AND NAVIGATION PROJECTS

  Prepared Statement of B. Reid Detchon, Executive Director, Biomass 
                            Energy Advocates
                                summary
    Biomass energy development offers enormous potential benefits for 
the Nation--abundant renewable energy produced in America; reduced 
dependence on imported oil; a smaller trade deficit; more jobs in rural 
America; more income for farmers; improved soil and water quality; and 
reduced greenhouse gas emissions. Federal investment in research and 
development has advanced biomass energy technologies to the point of 
commercialization. They should be supported most strongly now, as they 
get ready to compete in the marketplace.
    Mr. Chairman and members of the Committee, this testimony is 
presented by the Biomass Energy Advocates on behalf of individuals and 
organizations in the environmental, agricultural, and renewable energy 
communities and is specifically endorsed by the following groups: 
Natural Resources Defense Council, National Association of Conservation 
Districts, Union of Concerned Scientists, Citizen Action, Clean Fuels 
Development Coalition, Common Purpose for Clean Energy, Renewable Fuels 
Association, Sustainable New-Wealth Industries, American Energy Crop 
Association, Americans for Clean Energy, and Consortium for Plant 
Biotechnology Research.
     Biomass is the secret energy resource of the United States--based 
on the productivity of our land and our farmers and foresters. It is a 
resource that we continually waste, in staggering quantities, while we 
mine the earth and scour the globe for finite natural resources to burn 
as fuel.
    Biomass energy is as old as the wood in an ancient campfire. It is 
the largest renewable energy resource in the U.S. other than 
hydropower, with 7,000 megawatts of generating capacity (mostly for 
cogeneration in the pulp and paper industry). Its potential is vast: 
The Department of Energy reports that it could provide as much as one 
third of the total U.S. demand for electric power and transportation 
fuels.
    At a time when the United States is contemplating steps to reduce 
emissions of greenhouse gases, biomass energy is one of the most 
important options available. Although biomass gives off carbon dioxide 
as it is used, it absorbs that same CO2 during the growing 
cycle and thus is carbon-neutral on a life-cycle basis. By way of 
contrast, fossil fuels pour carbon into our skies that was stored and 
buried by natural forces millions of years ago.
    The future of biomass energy is emerging today in many different 
forms--including alfalfa stems and waste wood gasified for fuel cells 
and advanced turbines; fast-growing willows co-fired with coal in 
utility boilers; rice straw fermented into ethanol for transportation 
fuel.
    Twenty years of investment in these technologies by the federal 
government has yielded major reductions in the cost of producing energy 
from biomass. For example, the cost of ethanol from cellulosic biomass 
(as opposed to starch crops like corn) has fallen from more than $4 to 
little more than $1 per gallon today, and further reductions--to 90 
cents, 60 cents, some say even 35 cents--are possible. New power 
generation technologies similarly promise to cut the cost of 
electricity from biomass to 5 cents a kilowatt-hour or less.
    Toward that end, investment in basic research and development 
remains vital and has attracted a very high level of cost sharing from 
the private sector through organizations such as the Consortium for 
Plant Biotechnology Research. This area should be continued and 
strengthened if we are to achieve the next level of cost reductions 
through new research breakthroughs.
    The time has now come, however, to realize the payoff from these 
federal investments--the payoff in terms of energy, the environment, 
and the rural economy. The time has come to put these innovative 
technologies into production and into the marketplace, where the 
private sector can see them in action and decide whether they are 
worthy of adoption and replication.
    The Department of Energy's fiscal year 1998 budget request for 
Biopower/Biofuels Energy Systems appropriately continues support for 
promising research opportunities, but its most important elements 
involve the cost-shared demonstration and validation at commercial 
scale of the research breakthroughs that have already been made.
    The Biomass Power for Rural Development program, a collaboration 
between the Departments of Energy and Agriculture, made commitments 
last year, with your support, to three highly promising approaches, 
each of which has potentially far-reaching impacts:
  --Growing highly productive, fast-growing willow crops--in a system 
        more like farming than forestry--on underutilized New York 
        farmland, for cofiring with coal in existing utility boilers. 
        The benefits include reduced emissions of sulfur dioxide--a key 
        acid rain precursor--in the nation's most sensitive region.
  --As concerns grow about the environmental effects of utility 
        deregulation--which may lead to greater use of older, less 
        sophisticated coal-fired power plants--cofiring with biomass 
        may be an important part of the answer. This approach, if 
        widely adopted at even a 10 percent cofiring ratio, would lead 
        to a rapid increase in the use of renewable energy at a truly 
        modest cost.
  --Using alfalfa stems for power production while converting the 
        leaves into animal feed. Minnesota farmers are working with 
        their state and local governments and with environmental and 
        consumer groups to help Northern States Power fulfill a minimum 
        biomass power requirement. This project promises to demonstrate 
        large-scale biomass gasification in collaboration with 
        conventional production agriculture.
  --Large-scale cultivation of switchgrass for power production in Iowa 
        and elsewhere in the Midwest, demonstrating the feasibility of 
        using this fast-growing native perennial for energy. 
        Switchgrass has exceptional environmental benefits in terms of 
        soil erosion, water quality, and carbon fixation and is an 
        approved cover crop under the Conservation Reserve Program. 
        Switchgrass is also highly reactive, increasing boiler 
        production efficiency when co-fired with coal, and enables even 
        higher generation efficiency in conjunction with high-
        temperature fuel cell power plants.
    It is critically important that the federal government develops 
these technologies in conjunction with industry--the ultimate 
customers. Toward that end, the Biomass Power for Rural Development 
program has brought together cross-cutting collaboratives of utilities, 
farm groups, and researchers. These projects, which could lead to 
significant rural economic development, have strong regional support 
politically and in the agricultural and environmental communities 
specifically. They will stimulate technological advances that will 
provide export opportunities in the global marketplace, create new jobs 
domestically, help solve waste disposal problems and improve the 
environment. The increase in funds requested for them next year is 
needed to keep the projects moving forward at an appropriate pace.
    Equally important in the fiscal year 1998 budget is the support 
provided for commercial cost-shared validation of the technology to 
produce ethanol from cellulose.
    Twenty years ago, the Department of Energy was created--in large 
part to reduce our dependence on foreign oil. If ended today, its 
performance on that mission would be judged a complete and utter 
failure. Our dependence on foreign oil is as great as it ever was and 
is rapidly rising, year by year. The biofuels program is our most 
promising energy supply option for reducing this dependence, and our 
investment in it, compared to the economic and military threat it 
addresses, is truly miniscule. As a nation, we spend four times as much 
on imported oil every day as we do on these alternatives every year.
    The Administration's so-called ``Car Talk'' committee, formally 
known as the Policy Dialogue Advisory Committee to Develop Options for 
Reducing Greenhouse Gas Emissions from Personal Motor Vehicles, was 
unable to come together around a unified strategy to recommend to the 
President because of disagreements over the appropriate role of fuel 
economy standards. But on one point the committee did agree--the 
importance of liquid biofuels.
    The Majority Report of the Car Talk committee found ``a substantial 
consensus within the technical community regarding the strong potential 
of cellulosic biomass-based fuel options for greenhouse gas 
mitigation'' and recommended a $100 million annual R&D budget for this 
topic alone. The dissenting report of the auto industry members 
similarly concluded that with ``significant support for research,'' 
cellulosic biomass fuels could produce a ``technological home run'' on 
greenhouse gas reductions.
    If used in fuel cells, which are rapidly nearing commercial 
readiness, these biofuels could replace virtually all of the gasoline 
we now use in this country for light-duty transportation.
    Mr. Chairman and members of the Committee, the fiscal year 1998 
budget request of $76.5 million for Biopower/Biofuels Energy Systems is 
a very small insurance premium against very large risks--against the 
risk that global warming is occurring; against the risk that we will 
face an interruption in our energy supplies; against the risk that we 
will have to send our sons and daughters once again to protect our 
access to the oil fields of the Persian Gulf. To benefit our 
environment, bolster our rural economy, and encourage the development 
of a major renewable energy resource in this country, we ask that you 
fully fund the budget request.
                                 ______
                                 
Prepared Statement of George E. Duffy, Chairman, Governor's Task Force 
                          on Maritime Industry
    Mr. Chairman: I am George E. Duffy, Chairman of the Governor's Task 
Force on Maritime Industry. I am submitting this statement on behalf of 
the ports on the lower Mississippi River and the maritime interests 
related thereto of the State of Louisiana. I am enclosing supporting 
statements from Mr. Ron Brinson, President and CEO of the Port of New 
Orleans; Mr. Channing Hayden, President of the New Orleans Steamship 
Association; Captain John Levine, President of the Associated Branch 
Pilots; and Captain Mark Delesdernier, President of the Crescent River 
Port Pilots plus several other statements. In addition, I would like to 
ask that all of these statements be made a part of the record.
    The Mississippi River from the Gulf of Mexico to Mile 232 AHP is a 
45-foot deep channel. The District Engineer of the U. S. Army Corps of 
Engineers, New Orleans District recently released the preliminary 
Corps' cargo tonnage figures for consolidated ports of South Louisiana 
for 1995. These ports are those that make up the deep water ports on 
the lower Mississippi River from Baton Rouge to the Gulf of Mexico. A 
grand total of 438 million tons of foreign and domestic waterborne 
commerce moved on this 232 miles of the Mississippi River in 1995. The 
deepening of the Mississippi River several years ago certainly was a 
factor in the deep water ports on the lower Mississippi River improving 
their tonnage statistics. Thanks to Congress and the efforts of the New 
Orleans District, we feel that we now are in a more competitive 
position with import-export bulk ports of the world. That position of 
strength in trade is essential to our nation's very well-being when one 
considers that foreign trade has been, and continues to this day, a 
sustaining force behind our country's growth. Ninety-one percent of our 
foreign merchandise trade by volume--and two-thirds of it by value--
moves in ships. With 21.1 percent of the nation's foreign waterborne 
commerce passing through the ports of Louisiana, the State of Louisiana 
has had a profound influence on employment, plant construction and 
access to worldwide markets.
    We believe our Louisiana ports have a distinct advantage in access 
to foreign markets at competitive transportation costs. In order to 
handle the waterborne commerce, hundreds of barge lines serve our 
nation's inland waterways. In the lower Mississippi River region, over 
300,000 barges pass through the Port of New Orleans annually, handling 
the waterborne commerce of the area. To carry the cargo between New 
Orleans and its trading partners throughout the world--serving, for 
example, more than 150 countries--approximately 6,000 vessels operated 
by more than 75 steamship lines, call at the ports on the lower 
Mississippi River in a year's time. These trading partners and 
percentages of trade are Europe (23.7 percent), Latin America (32.4 
percent), Asia (32.1 percent), Africa (10.5 percent) and North America 
(1.3 percent).
    It is undeniable that the New Orleans area plays a vital role in 
international commerce of this nation. In 1995, the lower Mississippi 
River (Baton Rouge to the Gulf of Mexico) handled 201 million tons of 
foreign waterborne commerce. Worth $35.0 billion, this cargo 
represented 18.6 percent of the nation's international waterborne trade 
and 25.4 percent of all U. S. exports. Bulk cargo accounted for 
approximately 90 percent of this volume, primarily the result of 
tremendous grain, animal feed and oil seed exports and petroleum 
imports. More specifically, over 54.3 million tons of grain coming from 
17 states and representing 49.3 percent of all U. S. grain exports 
entered the world market via the 10 grain elevators and midstream 
transfer capabilities on the lower Mississippi River. This same port 
complex received 55.5 million short tons of petroleum and petroleum 
products in 1995, approximately 13.8 percent of the U. S. waterborne 
imports of petroleum products.
    Also in 1995, public and private facilities under the jurisdiction 
of the Board of Commissioners of the Port of New Orleans handled 67.5 
million tons of foreign cargo worth $16.8 billion (included in lower 
Mississippi River statistics). Of this amount, general cargo tonnage 
totaled 10.5 million tons (major commodities include: iron and steel 
products, coffee, forest products, metalware, aluminum products and 
natural rubber). Although the volume of bulk cargo statistically dwarfs 
the amount of general cargo handled, the significance of the port in 
the movement of general cargo should not be overlooked. The Port of New 
Orleans consistently ranks in the top seven cargo ports in the country. 
Furthermore, per ton, general cargo is very valuable to the community 
as it produces a greater local economic benefit than does bulk cargo.
    While the port's foreign market is worldwide, its domestic market 
is primarily mid-America, the heartland of the United States. This 
heartland region currently produces 60 percent of the nation's 
agricultural products, half of all of its manufactured goods, and 90 
percent of the country's machinery and transportation equipment. 
Waterborne commerce from this region is projected to reach 800 million 
tons by the year 2000.
    Essential to our national economy is the continued growth and 
development of the lower Mississippi River regional complex. Most major 
trading nations of the world have deep draft ports and are in the 
process of developing more. With the passage of the Water Resources 
Development Act of 1986, United States ports are on the way to becoming 
more competitive in the world marketplace.
    By the end of December 1988, the Corps had completed the initial 
construction dredging of the 45-foot channel from the Gulf of Mexico to 
Mile 181 AHP, thereby capturing the majority of estimated benefits 
attributed to the deeper channel. In fact, nine of the 10 active grain 
elevators and our floating grain elevators that serve the vast mid-
American, agricultural hinterland are reasonably assured of a minimum 
safe channel depth of 45-feet. Remaining yet for total first phase 
completion of the project are the project mitigation features. We 
understand that funds are currently available for the fiscal year 1997 
work. We urge continued support for this effort which is part of 
approximately $15 million in payments to the State of Louisiana to 
construct a pipeline and pumping stations for delivering potable fresh 
water to communities affected by saltwater intrusion. The State of 
Louisiana signed the agreement in May, 1993 which relieves the Corps 
from the responsibility for barging fresh water to the parish every 
year. The Local Cooperation Agreement for phase two dredging of the 
river to 45 feet from Mile 181 to Mile 232 was signed in September, 
1993 allowing construction to go forward. This important project was 
completed in December 1994. We urge the Corps to proceed with design 
studies for Phase III which will allow us to proceed with the further 
deepening of the river to the 55-foot authorized depth.
    In 1995, the Port of Baton Rouge handled 836 million tons to retain 
its position as the fourth largest port in the nation. Most ports on 
the lower Mississippi River are dependent upon timely and adequate 
dredging of the Southwest Pass to provide access to the Gulf. Judging 
from past experiences with spring thaws bringing higher river stages 
and higher rates of siltation, and recognizing that Congress 
appropriated $48,155,000 in fiscal year 1997 under O&M General, we 
recommend that the Corps be funded to its full capability in fiscal 
year 1998 for Maintenance of the 45-foot project channel which provides 
deep draft access to the deep draft ports on the lower Mississippi 
River from Baton Rouge to the Gulf. This funding includes monies for 
both dredging and repairs to foreshore dikes, repairs to lateral dikes, 
jetty repairs. Revetment construction has reduced the number and size 
of available deep draft anchorages. To mitigate this, we recommend that 
the Corps be authorized to construct new anchorages and maintain new 
and existing anchorages to accommodate increased ship traffic under the 
O&M General appropriation.
    We are equally concerned with maintaining adequate depths and 
channel widths in the Mississippi River-Gulf Outlet Channel that is 
responsible for 85 percent of all container cargo in the State of 
Louisiana; and generates an annual economic impact of well over a 
billion dollars. Shoaling caused by Tropical Storm Josephine in October 
1996 demonstrated the vulnerability of this channel to coastal storm 
activity. The channel's project depth is 36 feet MLG; however, heavy 
shoaling during the storm required the Bar Pilots to restrict draft to 
30 feet for all deep draft vessels using this channel to reach the Port 
of New Orleans. We commend the New Orleans District for initiating five 
emergency dredging contracts and using the government Dredge MCFARLAND 
to begin restoring the deeper channel as quickly as possible. 
Recognizing that Congress appropriated $12,828,000 in fiscal year 1997 
under O&M General, we recommend that the Corps be funded an increased 
capability in fiscal year 1998 for this project. This will permit 
annual maintenance dredging and allow bank stabilization on the north 
and south banks, maintenance of the north jetty, and removal of any 
remaining shoaling caused by Tropical Storm Josephine. This project 
also provides deep draft access to the Port of New Orleans. 
Incidentally, in 1995, the 650 general cargo vessels calling on the MR-
GO Tidewater facilities accounted for 31.4 percent of the general cargo 
tonnage handled over public facilities at the Port of New Orleans.
    The emergency dredging in the Mississippi River-Gulf Outlet Channel 
greatly exceeded the budgeted amount in the project for fiscal year 
1997 forcing the New Orleans District to utilize funds budgeted in 
other Operations and Maintenance Projects. We encourage the Congress to 
consider supplemental funding to replace the funds that were diverted 
to this emergency work. In addition, we request that any funds not 
replaced in fiscal year 1997 be added to the work scheduled in fiscal 
year 1998.
    Recognizing that Congress appropriated $3,100,000 in fiscal year 
1997 construction funds, we recommend that the Corps be funded to fully 
capability in fiscal year 1998 for the IH-NC New Ship Lock which is 
essential to the continuation of detailed design studies.
    The operation and maintenance features of the Mississippi River 
Outlets at Venice, Louisiana are fundamental in providing safe and 
essential offshore support access to energy-related industries. In 
addition to routine traffic, Baptiste Collette Bayou is used by shallow 
draft vessels as an alternate route between the GIWW and/or MR-GO and 
the Mississippi River. Recognizing that Congress appropriated 
$2,190,000 in fiscal year 1997 under O&M General, we recommend that the 
Corps be funded an increased capability in fiscal year 1998 for 
continued maintenance of these critical east-west navigation channels, 
Baptiste Collette and Grand and Tiger Pass. These channels handled over 
2 million tons of commerce in CY 95. The New Orleans District is 
scheduled to dewater and repair the Inner Harbor Navigation Lock in CY 
98. This will close the GIWW to traffic where it intersects the 
Mississippi River for approximately 45 to 60 days. These necessary lock 
repairs will substantially increase traffic through Baptiste Collette 
and warrants a very high priority upon dredging this channel. In 
addition WRDA 96 modified the project to provide for the extension of 
the 16-foot deep MLG Baptiste Collette Bayou entrance channel to 
approximately mile 8 of the Mississippi River Gulf Outlet.
    We urge approval of GI funds for fiscal year 1998 to address the 
need for and the timing of the replacement of Bayou Sorrel Lock on the 
GIWW, Morgan City-to-Port Allen alternate route. These funds, along 
with fiscal year 1997 carryover funds, will be used to continue the 
feasibility study.
    Recognizing that Congress appropriated GI funds in the amount of 
$248,000 in fiscal year 1997 for the Corps to initiate a reconnaissance 
study of the long-term improvements needed for navigation on the 
Mississippi River and its outlets between Baton Rouge, LA, and the Gulf 
of Mexico to include anchorage areas, we recommend that the Corps be 
funded to full capability in fiscal year 1998 to complete the 
reconnaissance study.
    Recognizing that approximately 120 million tons of cargo traverses 
the GIWW in the New Orleans District, we recommend that the New Orleans 
District be funded an increased capability in fiscal year 1998 for 
continued maintenance of the Louisiana and Texas section of the Gulf 
Intracoastal Waterway.
    We are well aware of the impetus for reducing the Federal budget; 
however, we strongly urge that all of the above projects be funded to 
their full capability. Reduced funding on any of the above projects 
will result in a decreased level of maintenance, preventing the 
projects from functioning at their full authorized purpose. Any delays 
to required maintenance will escalate to rapid deterioration of the 
projects. This will lead to a reduction in serviceability and cause 
severe economic impacts, not only to this region but to the nation as 
whole, far outweighing any savings in Federal expenditures.
    In closing I would like to recommend support for the Red River 
Waterway, Mississippi River to Shreveport, Louisiana project, providing 
for 236 miles of navigation improvements, 225 miles of channel 
stabilization works, and various recreational facilities. Recognizing 
that Congress appropriated substantial completion funding and O&M 
funding for this project in fiscal year 1997, we recommend that the 
Corps be funded to full capability in fiscal year 1998. This will 
provide funding to complete navigation structures and to continue the 
Operation and Maintenance level required for normal operation.
    Mr. Chairman, this concludes my statement and I thank you.
    I am enclosing supporting statements from Mr. J. Ron Brinson, 
President and CEO of the Port of New Orleans, Mr. Channing Hayden, 
President of the New Orleans Steamship Association, Captain John 
Levine, President of the Associated Branch Pilots and Captain Mark 
Delesdernier, President of the Crescent River Port Pilots, plus several 
other statements. I would like to request that these statements be made 
a part of the record along with my statement. I have furnished 
separately for your staff's background use supplemental graphics 
relating to my statement.

CONGRESSIONAL APPROPRIATIONS FOR FISCAL YEAR 1997 FOR PORTS ON THE LOWER
              MISSISSIPPI RIVER AND THE RED RIVER WATERWAY              
------------------------------------------------------------------------
                                        Amount in                       
              Project                  President's      Amount in Public
                                          Budget              Law       
------------------------------------------------------------------------
Mississippi River Ship Channel,                                         
 Gulf to Baton Rouge, LA                                                
 (Construction General)...........           $752,000         $1,252,000
Mississippi River, Baton Rouge to                                       
 the Gulf, Maintenance Dredging                                         
 and Stabilization (O&M General)..         46,155,000         46,155,000
Mississippi River-Gulf Outlet (MR-                                      
 GO), LA (O&M General)............         12,828,000         12,828,000
Mississippi River-Gulf Outlet, LA                                       
 New Ship Lock (Construction                                            
 General).........................          3,100,000          3,100,000
Mississippi River Outlets at                                            
 Venice, LA (O&M General..........          2,190,000          2,190,000
Intracoastal Waterway Locks, (GI                                        
 Funds)...........................            600,000            600,000
Gulf Intracoastal Waterway LA &                                         
 Texas (O&M General)..............         16,603,000         16,603,000
Red River Waterway (Construction                                        
 General) and (O&M General).......          9,853,000         10,853,000
                                   -------------------------------------
      Total.......................         96,881,000        103,081,000
------------------------------------------------------------------------

                                summary
Mississippi River Ship Channel, Gulf to Baton Rouge, LA (Construction 
        General)
    We recommend that the Corps be funded to full capability in fiscal 
year 1998 to perform the fiscal year 1998 required work on the 
saltwater intrusion mitigation plan and to complete design studies for 
a potential phase III fifty-five foot channel.
Mississippi River, Baton Rouge to the Gulf, Maintenance Dredging and GI 
        Funds for Navigation Study
    Recognizing that Congress appropriated $46,155,000 in fiscal year 
1997 under O&M General, and $248,000 in GI funds for a navigation 
improvement study to include ways to reduce long term maintenance 
costs, we recommend that the Corps be funded increased capability for 
these two items in fiscal year 1998.
Mississippi River-Gulf Outlet (MR-GO), LA, Maintenance Dredging
    Recognizing that Congress appropriated $12,828,000 in fiscal year 
1997 under O&M General, we recommend that the Corps be funded an 
increased capability in fiscal year 1998 to include bank stabilization, 
jetty maintenance, removal of any remaining shoaling caused by Tropical 
Storm Josephine in 1996 and reinstatement of any other structural 
repairs to channel banks that were curtailed as a result of funding 
restrictions due to Tropical Storm Josephine.
Mississippi River-Gulf Outlet, LA, New Ship Lock
    Recognizing that Congress appropriated $3,100,000 in fiscal year 
1997 construction funds, we recommend that the Corps be funded an 
increased capability in fiscal year 1998 for the IH-NC New Ship Lock 
which is essential to the continuation of detailed design studies.
Mississippi River Outlets at Venice, LA
    Recognizing that Congress appropriated $2,190,000 in fiscal year 
1997 under O&M General, we recommend that the Corps be funded an 
increased capability in fiscal year 1998 for continued maintenance of 
these critical east-west navigation channels (Baptiste Collette and 
Grand and Tiger Pass).
Intercoastal Waterway Locks, LA
    We urge approval of GI funds for fiscal year 1998 to address the 
need for the timing of the replacement of Bayou Sorrel Lock on the 
GIWW, Morgan City-to-Port Allen alternate route. These funds, along 
with fiscal year 1997 carry over funds, will be used to continue the 
feasibility study.
Gulf Intercostal Waterway
    LA AND TX (O&M General) recognizing that Congress appropriated 
$16,603,000 in fiscal year 1997 under O&M General, we recommend that 
the New Orleans District be funded an increased capability in fiscal 
year 1998 for continued maintenance of this critical section of this 
most important channel.
Red River Waterway, Mississippi River to Shreveport, LA
    Recognizing that Congress appropriated $10,853,000 in fiscal year 
1997 for substantial completion of this vital project and $9,500,000 
for operations and maintenance in fiscal year 1997, we recommend that 
the Corps be funded to full capability in fiscal year 1998. It is 
essential that completion of work already underway on this project--
ultimately to result in stimulating economic growth along the Red River 
Basin and increased cargo movements for Louisiana ports be funded.

 LOWER MISSISSIPPI RIVER FOREIGN WATERBORNE COMMERCE--CALENDAR YEAR 1995
                              [In percent]                              
------------------------------------------------------------------------
                                                      Dollar            
                                                     value by   Tonnage 
                                                      world     by world
                                                       area       area  
------------------------------------------------------------------------
Africa............................................        8.6       10.2
Asia..............................................       32.2       32.3
Europe............................................       28.0       23.3
Latin America.....................................       30.6       33.4
North America.....................................         .5         .8
------------------------------------------------------------------------


------------------------------------------------------------------------
                                                                Tonnage 
                                                    Dollar    (thousands
               Principle countries                   value     of short 
                                                  (millions)     tons)  
------------------------------------------------------------------------
Japan...........................................      $3,310      21,609
Mexico..........................................       2,061      17,226
Venezuela.......................................       1,972      17,940
Netherlands.....................................       1,748       9,303
China...........................................       1,743      10,792
All others......................................      24,207     124,342
                                                 -----------------------
      Total.....................................      35,041     201,212
------------------------------------------------------------------------
Source: U.S. Department of Commerce.                                    

Lower Mississippi River foreign waterborne commerce

                        [Calendar years 1985-95]

                                                              Percent of
                                                              total U.S.

1995..............................................................  18.6
1994..............................................................  17.8
1993..............................................................  18.1
1992..............................................................  18.2
1991..............................................................  16.6
1990..............................................................  17.6
1989..............................................................  16.9
1988..............................................................  15.9
1987..............................................................  18.2
1986..............................................................  15.1
1985..............................................................  14.8

Source: U.S. Department of Commerce.
---------------------------------------------------------------------------

Lower Mississippi River \1\ principal commodities 1995

                                                              Short tons

Imports:
    Petroleum and petroleum products....................      55,524,512
    Iron and steel......................................       8,991,644
    Metalliferous ores..................................       7,483,052
    Fertilizers.........................................       6,137,890
    Nonmetallic mineral manuf...........................       2,212,595
    Chemicals...........................................       1,089,067
    Coal, coke, and briquettes..........................       1,088,638
    All others..........................................       3,617,455
                    --------------------------------------------------------
                    ____________________________________________________
      Total.............................................      86,144,853
                    ========================================================
                    ____________________________________________________
Exports:
    Cereal and cereal products..........................      54,330,584
    Oil seeds and oleaginous fruits.....................      17,588,556
    Animal feeds........................................      14,100,385
    Coal, coke and briquettes...........................      10,570,539
    Petroleum and petroleum products....................       9,049,267
    Chemicals...........................................       2,453,351
    Vegetable fats and oils.............................       1,746,546
    All others..........................................       5,229,292
                    --------------------------------------------------------
                    ____________________________________________________
      Total.............................................     115,068,520

\1\ Foreign waterborne commerce.

Source: U.S. Department of Commerce.
---------------------------------------------------------------------------

Mississippi River Gulf outlet--1995 total waterborne commerce commodity 
                                 profile

Primary manuf. goods..............................................  30.0
Crude materials...................................................  26.7
Coal....................................................................
Chemicals.........................................................  17.7
Petro/petro prods.................................................   1.4
Manuf. equipment..................................................   6.3
All others........................................................    .2
Food and farm prods...............................................  17.7

Sources: U.S. Army Corps of Engineers, Port of New Orleans.
---------------------------------------------------------------------------
        mississippi river gulf outlet 1995 facts and comparisons
    Responsible for over three million tons of International general 
cargo.
    Represents almost 31 percent of the total general cargo of the Port 
of New Orleans.
    Responsible for 85 percent of all the container cargo in the State 
of Louisiana.
    Moves more general cargo than Gulfport and Tampa combined.
    Represents approximately 28 percent of the Port of New Orleans' 
vessel calls.
    Cargo handled at public facilities via the MR-GO had an estimated 
economic impact of $793 million to the state of Louisiana.
    The economic activity resulting from the MR-GO supported an 
estimated 12,075 jobs in the New Orleans metropolitan area.
    Source: Port of New Orleans UNO Econ Impact Study.
                                 ______
                                 
 Prepared Statement of Channing F. Hayden, Jr., President, New Orleans 
                         Steamship Association
  projects of public interest on the lower mississippi river from its 
                          mouth to baton rouge
    1. Mississippi River ship channel gulf to Baton Rouge, Louisiana 
(construction general).--We recommend continuation of the work on the 
saltwater intrusion mitigation plan and the design studies for Phase 
III of the 55-foot channel. Funding to full capability in fiscal year 
1998 is necessary for this required work to be performed.
    2. Channel stabilization and maintenance dredging of Southwest Pass 
and maintenance dredging of the Mississippi River from Baton Rouge to 
the Gulf of Mexico, plus general investigation of the river and its 
outlets between Baton Rouge, Louisiana, and the Gulf of Mexico.--
Recognizing that $46,155,000 was appropriated by Congress in fiscal 
year 1997 under O&M General, with GI funds of $248,000 in fiscal year 
1997 for a reconnaissance study to improve navigation needs, we urge 
that the Corps be funded to its full capability in fiscal year 1998 
under O&M General to permit dredging and dike maintenance work, and 
also fund to full capability in fiscal year 1998 to complete the 
reconnaissance study to include ways to reduce long term maintenance 
costs and the authorization to construct and maintain anchorages.
    3. The Mississippi River-gulf outlet maintenance dredging and bank 
erosion.--Recognizing that $12,828,000 was appropriated by Congress in 
fiscal year 1997 under O&M General, we urge that the Corps be funded an 
increased capability in fiscal year 1998 to maintain this channel, 
which should include bank stabilization on both banks, jetty 
maintenance, and removal of all shoaling from Tropical Storm Josephine, 
as well as reinstatement of any other structural repairs to channel 
banks that were not done because of funding difficulties resulting from 
the storm's aftermath.
    4. Mississippi River-gulf outlet, Louisiana, new ship lock.--
Recognizing that $2,190,000 was appropriated by Congress in fiscal year 
1997 construction funds, we urge funding for the Corps' full capability 
in fiscal year 1998 construction funds, which are essential to the 
completion of local reevaluation studies and initiation of detailed 
design studies for the IH-NC new ship lock.
    5. Red River waterway, Mississippi River to Shreveport, 
Louisiana.--Recognizing that $10,853,000 was appropriated by Congress 
for substantial completion of the vital project and $9,500,000 for O&M 
in fiscal year 1997, we strongly urge that the Corps be funded to full 
capability for fiscal year 1998. This project will result in 
stimulating economic growth along the Red River Basin and increase 
cargo movements through the Port of New Orleans. Funding is essential 
to complete the work already under way.
    6. To provide access to the harbor maintenance fund to address 
dredging emergencies.--To address dredging emergencies, such as the one 
currently in progress at Southwest Pass, Congress should provide the 
Corps limited access to the funds in the Harbor Maintenance Fund. 
Proper safeguards should be built in to restrict access to emergencies 
caused by floods, storms, and other natural disasters.
    Mr. Chairman: My name is Channing Hayden, and I am President of the 
New Orleans Steamship Association. Our Association represents some 45 
ship owners, operators, agents, and stevedores, who, in turn, represent 
the majority of the 6,000+ deep-draft vessels in foreign commerce that 
call Louisiana's Mississippi River ports each year. We are dedicated to 
the safe and efficient movement of maritime commerce through the 
state's river ports from the Gulf of Mexico to Baton Rouge. We endorse 
the testimony of Mr. George E. Duffy, Chairman of the Governor's Task 
Force on Maritime Industry and the statements of the other 
organizations attached to Mr. Duffy's testimony.
    Channel stabilization and maintenance dredging in Southwest Pass 
are critical to keep project draft. Project draft ensures the 
Mississippi River's deep-water ports will handle the country's foreign 
waterborne commerce in the most cost-effective way possible.
    For years we have urged this Committee to provide funds to maintain 
project draft at Southwest Pass. You have responded, and your wisdom 
has benefited the entire American heartland served by the Mississippi 
River system. Southwest Pass was greatly restricted throughout the 
1970's. From 1970 to 1975, the channel was at less than project draft 
46 percent of the time. In 1973 and 1974, the channel was below the 40-
foot project draft 70 percent of the time. During some periods, drafts 
were limited to 31 feet. Fortunately, those conditions have not 
recurred because of a combination of factors: Your help, and the 
constant vigilance of the Pilots, the Corps, and the maritime 
community. The years 1990 through 1996 show a tremendous improvement in 
channel stability. We have been at or above project draft 97 percent of 
the time for vessels under 100,000 deadweight tons and 94 percent of 
the time for vessels 100,000 deadweight tons or greater. The funding 
you provided was money well spent. The repairs to the jetties and dikes 
and the Corps' ability to rapidly respond to shoaling have been 
instrumental in maintaining project dimensions.
    In this regard, it is critically important that you fund the Corps 
to its full capabilities for needed repairs of the Southwest Pass pile 
dikes and the foreshore rock dikes from Mile 0.5 AHP to Mile 0.8 BHP. 
Both of these projects represent an investment that will cause the 
river to scour itself and reduce maintenance dredging costs. We also 
recommend mining sediment from Pass a Loutre and the Pilottown 
Anchorage to create and enhance wetlands. Each 800,000 cubic yards of 
dredged material creates 115 acres of wetlands and enhances 256 more. 
In the process, much-needed Pilottown Anchorage at fog-prone Head of 
Passes would be dredged to accommodate the increasing number of deeply-
ladened ships attracted by the 45-foot channel. Dredging Pilottown 
Anchorage would also mitigate anchorage space lost in this area to the 
West Bay Diversion Project.
    The Pilots have taken advantage of tidal flows and other factors to 
recommend the maximum draft possible consistent with safe navigation. 
Six years ago we set a new record with draft recommendations of 49 feet 
for vessels under 100,000 deadweight tons and 48 feet for those over 
100,000 deadweight tons, an eight- to nine-foot improvement over the 
old 40-foot project draft and four to five feet over the authorized 
project. Twelve inches to a large vessel with a loading capacity of 250 
tons per inch is an additional 3,000 tons of cargo. As of this writing, 
freight rates for grain moving from the Mississippi River to the Far 
East are $25.53 per ton and $13.44 a ton to Europe. Using the average, 
$19.49, each foot of draft represents an additional $58,470 in vessel 
revenue, or $467,700 for eight additional feet over the old 40-foot 
project draft. It also represents additional sales and increased 
competitiveness for U.S. products on the world market. Industry's 
partnership with you has kept Mississippi River ports competitive. 
Today Southwest Pass's draft is 46 or 47 feet, depending on vessel 
size--above the authorized project.
    The funds we request for maintenance dredging and other works are 
essential for the Corps to maintain a reliable channel and respond 
rapidly to potential problems. This builds the confidence of the bulk 
trade in a reliable Mississippi River draft, which is critically 
important. Much of Louisiana's bulk trade is export agricultural 
products and coal. These commodities are neither captive to Louisiana 
nor the United States if they can be shipped from competing countries 
at a consistently lower cost.
    The deeper the channel, the more important channel stabilization 
is. Adequate channel stabilization work minimizes the maintenance cost 
of the deeper channel--a cost effective investment. The faster the 
project is stabilized, the faster and greater the benefits of reduced 
O&M costs will be realized. Also, we recommend that the Corps conduct 
research on prototype dredging techniques. Experimental dredging would 
not replace routine dredging, but would permit, for example, testing 
dustpan dredges in Southwest Pass and Water Injection Dredge at the 
crossings above New Orleans.
    Funds are also needed for dustpan dredges to work the crossings 
above New Orleans. These crossings control the draft to eight of our 
ten major grain elevators, plus many mid-stream loading facilities. 
This area caters to the bulk trade and must have a stable channel depth 
consistent with the depth at Southwest Pass. Only two dredges in the 
world are available to maintain the deep-draft crossings between New 
Orleans and Baton Rouge. (One to two more may be needed to reliably 
maintain the new 45-foot channel above New Orleans.)
    The Corps is studying the makeup of their ``minimum fleet''--the 
number of dredges the Corps owns and operates. Corps-owned dredges 
working the lower Mississippi River are the hopper dredges WHEELER, 
MACFARLAND, and ESSAYONS, and the dustpan dredge JADWIN. The WHEELER 
and MACFARLAND, and from time to time the ESSAYONS, provide much-needed 
capacity and immediate response to keep Southwest Pass opened, 
especially when the river is abnormally high. Last year's action to 
reduce the government hopper fleet will drastically diminish the Corps' 
ability to maintain reliable project dimensions and adversely affect 
our country's standing in world bulk markets. We urge Congress to 
reconsider its decision to place the WHEELER on stand-by status. Even 
when the WHEELER is available, the combined Corps/private fleet does 
not have enough Mississippi River-qualified hopper dredges to meet peak 
dredging requirement. The Corps' Minimum Dredge Fleet Study, due out 
later this year, should confirm the lack of needed capacity. A 
Congressional decision to reduce the Corps' dredge fleet by eliminating 
the JADWIN, one of two dustpan dredges in the world capable of working 
the crossings between New Orleans and Baton Rouge, could close the 
upper river to deep-draft ships, causing serious economic 
repercussions.
    For all of the above reasons, we request full funding for the 
mitigation features of the 45-foot project and for O&M General.
    In December 1994, the Corps completed the 45-foot deep channel to 
Baton Rouge. Proper maintenance now provides uniform drafts for all the 
ports on the lower Mississippi River. This makes U.S. exports through 
Louisiana more competitive, and adequate federal maintenance funds to 
keep the channel open must be available. In addition, the Corps needs 
authorization to construct and maintain anchorages to improve safety. 
Over the years, revetment work and changes in the river itself have 
caused serious negative impacts on our anchorages. Therefore, we 
encourage full funding capability in fiscal year 1998 to complete the 
reconnaissance study of navigation needs on the Mississippi River and 
its outlets between Baton Rouge and the Gulf.
    The growth of the Port of New Orleans depends, in large measure, on 
the Port's container and other facilities on the Mississippi River-Gulf 
Outlet (MR-GO). The funds you provided in past fiscal years have 
allowed the Corps to improve the channel considerably. However, the 
channel width has remained limited primarily because of erosion. This 
seaway has a project depth of 36 feet. For safety reasons in this 
narrow channel, restrictions apply to vessels with a draft of 30 feet 
or more, causing delays to the tightly scheduled container traffic 
using the MR-GO. These specialty vessels serving the Port's facilities 
are becoming larger. This channel, with less than stable full project 
dimensions, causes problems for larger vessels, reducing our ability to 
grow with the trade. Early last October, Tropical Storm Josephine 
caused severe shoaling throughout the channel. Depths were reduced 
below 30 feet in many areas, requiring the Pilots to restrict drafts. 
Despite the Corps' best efforts, the channel width remains seriously 
reduced in many areas, and the depth is deteriorating rapidly. This is 
not conducive to safety, nor does it enhance the Port of New Orleans' 
ability to compete in the lucrative container trade. The highest wages 
under the International Longshoreman's Association's contract ($23 per 
straight-time hour) is paid for work at the MR-GO container facilities. 
Anything that threatens the MR-GO jeopardizes these high-paying jobs, 
which are held mostly by minority workers.
    To improve safety on the MR-GO and protect Louisiana's container 
trade (and the well-paying, minority employment it produces), we 
request that the Corps be funded to an increased capability for the MR-
GO in fiscal year 1998. This will allow annual maintenance dredging, 
north and south bank stabilization, north jetty maintenance, removal of 
all shoaling caused by the October storm, and reinstatement of all 
structural repairs to channel banks that were not done because of 
funding difficulties resulting from the storm's aftermath.
    With facilities located on both the MR-GO and the Mississippi 
River, an adequate route between the two is essential for efficient 
transit between these facilities. The shortest route is an inadequate, 
antiquated lock built in the 1920's with a width of 75 feet and limited 
depth of 30 feet. Its maximum capacity has long been exceeded. The 
average waiting time for passage through the lock has increased from 
8\1/2\ hours in 1985 to about 12 hours at present; however, we 
understand that waiting time can be more than a day in some instances.
    A much larger ship lock is necessary to accommodate today's 
traffic. We urge Congress to provide the Corps' full fiscal year 1998 
capability for this important project to insure its completion. Delays 
are unthinkable since the new lock is long overdue.
    The Red River Waterway, Mississippi River to Shreveport, Louisiana, 
Project is directly related to our ports. The continuation and 
completion of this work will stimulate the economy all along the Red 
River Basin with jobs and additional international trade. This 
stimulated trade will service the Port of Shreveport and the ports on 
the lower Mississippi River, providing needed growth and benefitting 
the states of Louisiana, Texas, Oklahoma, and Arkansas, which are 
served through the Shreveport distribution center. Therefore, we 
strongly recommend that the Corps be funded to full capability for 
fiscal year 1998.
    The shoaling difficulty and funding issue relating to the MR-GO 
because of the Tropical Storm Josephine, as explained in earlier 
paragraphs, has caused an even greater problem. It will affect the 
Corps' ability to properly address shoaling at Southwest Pass. The 
high-water season began early and is projected to continue for some 
time. This is based on the melting of the heavier than usual snows in 
the areas that feed into the Mississippi River. In addition, the high-
water has already filled upriver reservoirs. Some are preparing to 
release water to receive more snow runoff. We understand that early 
melting of the plains snowpack poured record amounts of water into the 
Missouri River reservoirs in February and has produced the second 
highest February runoff on record, more than 300 percent of normal. 
Mountain snow runs-off is normally not until May, June, and early July. 
Flooding in some areas of the country is still expected. This overall 
situation will put an unusual amount of water into the Mississippi 
River and cause considerable shoaling in Southwest Pass and the 
Pilottown area. There is already considerable deterioration of the 
channel's width, and the high-water season is far from over. Also, we 
are concerned that the Mississippi River crossings between New Orleans 
and Baton Rouge will be seriously affected. When the anticipated high 
river does fall, there will be shoaling at the crossings. This has the 
effect of double-jeopardy because as the river's elevation comes down, 
the river's bottom will come up.
    We urge Congress to provide for navigation emergency needs such as 
this. An appropriate solution would be for Congress to take action that 
would provide the mechanics for the immediate release of Harbor 
Maintenance Funds to the Corps of Engineers. Such funding would be 
specifically for emergencies to prevent hazards to navigation and avoid 
impeding the flow of our nation's commerce.
    Thank you for allowing the Association to submit testimony on our 
Corps' funding needs.
                                 ______
                                 
Prepared Statement of Capt. Mark Delesdernier, Jr., President, Crescent 
                     River Port Pilots Association
    I have served as President of the largest pilot association in the 
United States for the past 15 years. The Crescent River Port Pilots 
furnish pilots for ships destined to the Port of Baton Rouge, Port of 
South Louisiana, Port of New Orleans, Port of St. Bernard, and the Port 
of Plaquemines.
    The Crescent River Port Pilots piloted and shifted over 17,000 
ships during 1996. We pilot deep draft vessels on more than 100 miles 
on the lower Mississippi River and 35 miles on the Mississippi River 
Gulf Outlet.
    The lower end of our route on the Mississippi River has a shoaling 
problem starting with the high water season each year. The shoaling 
requires daily attention by the United States Army Corps of Engineers 
to maintain project depth.
    Heavy laden vessels call on the lower Mississippi River system as a 
direct result of the completion by the Corps of Engineers of the 
deepening of the channel from 40 feet to 45 feet.
    For several years now, we have had extraordinary success in keeping 
the river dredges to project depth. This success is a direct result of 
an experienced and vigilant Corps of Engineers that, through 
experience, is able to timely bid in dredges to avoid extra dredging 
cost by waiting too long to start maintenance dredging.
    Channel stability sends a positive message to the world's shipping 
community that schedule cargo for deep draft vessels months in advance 
is reliable. This makes the port call on the Mississippi River very 
profitable since the ships can lift greater tonnage.
    Keeping project depth is beneficial to twenty seven states that are 
directly tied to the Mississippi River Port Complex.
    Additionally I would like to comment on the east and west 
navigation channels near Venice, Louisiana. Baptiste Collette and Tiger 
Pass provide a shorter and more direct route to Breton Sound and West 
Delta in the Gulf of Mexico for oil field support vessels.
    The Crescent River Port Pilots also pilot ships in the Mississippi 
River Gulf Outlet. A man-made channel approximately 75 miles long 
starting in Breton Sound in the Gulf of Mexico and ending in New 
Orleans where it intersects with the Intercoastal Waterway.
    The Mississippi River Gulf Outlet feeds the main container 
terminals in the Port of New Orleans. Additional docks such as Bulk 
Terminal and general cargo facilities depend on this channel which 
handled approximately 700 ship calls last year.
    The Mississippi River Gulf Outlet has been a controversial channel 
since its inception, but being an integral part of the Port of New 
Orleans, it would be a disaster if it is not kept at project width and 
depth. The Crescent River Pilots strongly support approval of funding 
for both the maintenance dredging, jetty repair projects.
    Funding of the United States Army Corps of Engineers projects in 
the lower Mississippi River system which includes the Mississippi River 
Gulf Outlet, Tiger Pass, Baptiste Collette and Southwest Pass has 
proven to be money well spent.
    I urge your support of the funding requested to allow the Corps of 
Engineers to continue to maintain and improve the most productive 
waterway system in the world.
    Mr. Chairman, thanks for allowing me the opportunity to submit my 
comments to your subcommittee.
                                 ______
                                 
 Prepared Statement of John Levine, Jr., President, Associated Branch 
                                 Pilots
projects on the lower mississippi river and the mississippi river gulf 
                                 outlet
    The Associated Branch Pilots is an Association of pilots that have 
been guiding oceangoing vessels into the entrances of the Mississippi 
River system for over 125 years. We are called Bar Pilots because we 
guide the ships past the constantly shifting and shoaling sand bars in 
the area.
    Southwest Pass of the Mississippi River is the main entrance for 
deep draft oceangoing vessels entering the Lower Mississippi River 
System. It is the shallowest stretch of the Lower Mississippi River 
System and the area that requires the greatest effort by the Corps of 
Engineers to maintain project depth.
    In 1996, the Associated Branch Pilots made 12,302 transits on 
oceangoing vessels through Southwest Pass. Of these ships, 3,855 were 
of 50,000 deadweight tons or greater and 560 had a draft in excess of 
40 feet.
    This number of heavily laden vessels calling on the Lower 
Mississippi River System is a direct result of the completion by the 
Corps of Engineers of the deepening of the channel from 40 feet to 45 
feet.
    This first phase has proven to be extremely well designed and well 
maintained by the fact that the maximum draft recommended by my 
Association for vessels using Southwest Pass has been 45 feet or 
greater, except a two and a half month period during the high river of 
1994, since May 18, 1989. This is in stark contrast to the late 1970's 
and early 1980's when we often had to recommend drafts less than the 
project depth due to shoaling.
    To the world shipping community, this means that calling at ports 
on the Mississippi River system will be more profitable because larger 
ships can enter and carry greater amounts of cargo.
    This is beneficial to the entire United States because it makes the 
large quantities of petroleum, agricultural, and manufactured products 
shipped from the Mississippi Valley more desirable due to increased 
profitability.
    I would also like to comment briefly on the East-West navigation 
channels near Venice, Louisiana. Tiger Pass and Baptiste Collette 
provide a shorter, more direct route to Breton Sound and the Gulf of 
Mexico for offshore supply boats and small tugs and barges. These 
channels not only represent a savings in time and money for these 
vessels, but reduce the traffic in the main shipping channel, the 
Mississippi River and its passes, which is one of the most congested 
waterways in the country.
    The dredging of Baptiste Collette and South Pass would contribute 
greatly to increased safety on the lower river, especially considering 
the current boom in offshore oil exploration and the ensuing traffic 
that has resulted.
    The Associated Branch Pilots also pilot vessels in the Mississippi 
River Gulf Outlet, a man-made tidewater channel 75 miles long, 
stretching from the Gulf of Mexico to an intersection of the 
Intercoastal Waterway in New Orleans.
    This channel leads to the Main Container Terminals for the Port of 
New Orleans, the Roll On, Roll Off Terminal, the Port of New Orleans 
Bulk Handling Plant, and additional General Cargo Docks. For the Port 
of New Orleans to remain competitive in the ever growing container 
trade, the continued maintenance of this channel is critical. In 1996, 
586 ships called on the port using the Mississippi River Gulf Outlet.
    Much is being said pro and con concerning the Mississippi River 
Gulf Outlet. There is, admittedly, an erosion problem in the 
Mississippi River Gulf Outlet, but any curtailment of shipping traffic 
in the channel without regard to the long term effect upon the Port of 
New Orleans would be disastrous. I strongly support approval of funding 
for both the maintenance dredging/jetty repair project and the erosion/
riprap study for the Mississippi River Gulf outlet.
    I would also like to make a brief statement on behalf of the 
Mississippi Valley Coal Export Council. Over 62 million tons of coal 
have been exported, using the Mississippi River System during the past 
five years. Coal miners, tugboat captains, barge owners, shippers and 
many other coal related workers have benefited by using the consistent 
and efficient Mississippi River System. This also represents 
significant contribution towards the trade balance between the United 
States and other industrialized nations.
    Funding of the Corps of Engineers projects in the Lower Mississippi 
River System has proven to be money well spent. It has increased 
exports and imports that have benefited the entire United States. I 
urge your support of the funding requested to enable the Corps to 
continue to maintain and improve the most efficient and productive 
waterway system in the country.
                                 ______
                                 
 Prepared Statement of J. Ron Brinson, President and CEO, Port Of New 
                        Orleans, New Orleans, LA
    The Port of New Orleans depends upon the Mississippi River and the 
Mississippi River Gulf Outlet in providing the crucial service gateway 
for the 14,500 mile inland waterway system connecting Mid-America to 
world markets.
    We support fully the March 31, 1997 testimony of the Louisiana 
Governor's Task Force on Maritime Industry on behalf of the ports on 
the lower Mississippi River and the related maritime interests of the 
State of Louisiana. There simply can be no miscalculation as to the 
supreme economic importance of these waterways to the national 
interest.
    We thank you and your Subcommittee for outstanding support and 
cooperation over many years.
                                 ______
                                 
Prepared Statement of Clyde A. Giordano, Parish President, Plaquemines 
                  Parish Government, Belle Chasse, LA
    In my official capacity as Parish President of Plaquemines Parish 
Louisiana, I am herein requesting the following appropriation be made 
for fiscal year 1998:
    1. Mississippi River ship channel, gulf to Baton Rouge, LA 
(construction general).--We recommend that the Corps be funded to full 
capability in fiscal year 1998 to perform the fiscal year 1998 required 
work on the saltwater intrusion mitigation plan and to complete design 
studies for a potential phase III fifty-five foot channel.
    2. Mississippi River, Baton Rouge to the gulf, maintenance dredging 
and GI funds for navigation study.--Recognizing that Congress 
appropriated $46,155,000 in fiscal year 1997 under O&M General, and 
$248,000 in GI funds for a navigation improvement study to include ways 
to reduce long term maintenance costs, we recommend that the Corps be 
funded increased capability for these two items in fiscal year 1998.
    3. Mississippi River outlets at Venice, LA.--Recognizing that 
Congress appropriated $2,190,000 in fiscal year 1997 under O&M General, 
we recommend that the Corps be funded an increased capability in fiscal 
year 1998 for continued maintenance of these critical east-west 
navigation channels (Baptiste Collette and Grand and Tiger Pass).
    We would certainly appreciate your consideration and all the 
assistance you can give us in these projects.
                                 ______
                                 
 Prepared Statement of Irwin A. Ruiz, Executive Director, St. Bernard 
           Port, Harbor and Terminal District, Chalmette, LA
    As a deep water port on the Mississippi River located immediately 
below New Orleans, I would like to add our endorsement to George 
Duffy's statement on dredging projects on the lower Mississippi River.
    It is imperative that those projects are funded in order to 
continue stimulating economic growth to this vital area.
    We would appreciate your consideration of this important issue.
                                 ______
                                 
Prepared Statement of Gary K. Pruitt, Executive Director, Greater Baton 
                         Rouge Port Commission
    The Port of Greater Baton Rouge respectfully requests that your 
committee give favorable consideration to the following projects.
    1. Mississippi River ship channel--Gulf to Baton Rouge, LA.--We 
support full funding in fiscal year 1998 to the Corps of Engineers 
General Construction Budget. This is very important as it allows for 
the work on the saltwater intrusion mitigation plan and for completion 
of the design studies for the fifty-five foot channel.
    2. Mississippi River--Baton Rouge to the gulf--maintenance dredging 
and GI funds for navigation study.--We support increased funding for 
maintenance dredging on this stretch of the river and also for the 
navigation improvement study to reduce long-term maintenance cost.
    These two projects are extremely important, not only to the Port of 
Greater Baton Rouge, but to the entire nation. The great Mississippi 
River is the premier national waterway, providing accessibility to and 
from foreign countries for the transportation of goods and services 
used by countless numbers of U.S. companies and individual citizens. It 
must be properly designed and maintained for the benefit of all.
    We also earnestly request your support for funding of the other 
projects included in this testimony as prepared and submitted by Mr. 
George E. Duffy, Chairman of the Governor's Task Force on the Maritime 
Industry. These projects are also extremely important to the overall 
viability of the Mississippi River system and its tributaries. We must 
properly maintain all of the system if we are to continue to have the 
confidence of our trading partners around the world.
    Your cooperation in these matters is greatly appreciated.
                                 ______
                                 
    Prepared Statement of A. Lynn Lowe, President, Red River Valley 
                              Association
                              introduction
    The Red River Valley Association is a voluntary group of citizens 
banded together to advance the economic development and future well-
being of the citizens of the four state Red River Basin area in 
Arkansas, Louisiana, Oklahoma and Texas.
    For the past 72 years, the Association has done notable work in the 
support and advancement of programs to develop the land and water 
resources of the Valley to the beneficial use of all the people. To 
this end, the Red River Valley Association offers its full support and 
assistance to the various Port Authorities, Chambers of Commerce, 
Economic Development Districts and other local governmental entities in 
developing the area along the Red River.
    The Resolutions contained herein were adopted by the Association 
during its 72nd Annual Meeting in Shreveport, Louisiana on February 13, 
1997, and represent the combined concerns of the citizens of the Red 
River Basin area as they pertain to the goals of the Association, 
specifically: Economic and Community Development, Flood Control, Bank 
Stabilization, A Clean Water Supply for Residential, Commercial, 
Industrial and Agriculture Uses, Solar and Hydroelectric Power 
Generation, Recreation, Navigation, and Environmental Balance.
    The Red River Valley Association is aware of the constraints on the 
federal budget, and has kept those restraints in mind as these 
Resolutions were adopted. Therefore, and because of the far-reaching 
regional and national benefits addressed by the various projects 
covered in these Resolutions, we urge the members of Congress to review 
the materials contained herein and give serious consideration to 
funding the projects at the levels requested.
                             rrva statement
    Mr. Chairman and members of the Committee. I am Lynn Lowe, and I am 
pleased to represent the Red River Valley Association as its President. 
Our organization was founded in 1925 with the express purpose of 
uniting the citizens of Arkansas, Louisiana, Oklahoma and Texas to 
develop the land and water resources of the Red River Basin.
    I would like to comment on our concerns we have for the future 
economic well-being of the citizens residing in the four state Red 
River Basin area.
    Navigation.--Thanks to this committee's support, the Red River 
Navigation project to Shreveport-Bossier City, Louisiana--the largest 
metropolitan area in the River Basin--is complete. We have already 
realized benefits this project will bring to the area--and the nation--
and thank you for your support. We now ask for your continued support 
to study the feasibility of extending navigation from Shreveport-
Bossier City, Louisiana into the State of Arkansas. Many areas continue 
to suffer major unemployment, and the navigation project, although not 
the total solution, will help revitalize our economy. We are aware that 
limited analysis, to date, have not had the results we had hoped for. 
When regional economic benefits are considered it would clearly 
demonstrate the great benefits not realized to date. The U.S. Fish and 
Wildlife Service Planning Aid Report indicated minimal impact and most 
probably an enhancement to environmental value. I want to stress that 
the local sponsor, the Red River Commission of Arkansas, has available 
their 50 percent cost share for the complete feasibility study. Very 
few local sponsors have funds `in the bank' and are also willing to 
fund additional studies to insure a complete analysis is made.
    Bank Stabilization.--One of the most important continuing programs 
on the Red River is bank stabilization to stop the loss of valuable 
farmland that washes down streams to form sandbars and interfere with 
the navigation channel. These revetment projects are compatible with 
subsequent navigation and we urge that they be continued in those 
locations designated by the Corps of Engineers to be the areas of the 
worst bank caving.
    It is essential to protect the banks from caving and erosion along 
the Red River below Denison Dam to Index, Arkansas. The Federal 
Government constantly encourages its farmers to protect our lands 
against all forms of erosion, so it only makes sense to be consistent. 
An authorized project exists; `Red River Waterway, Index, AR to Denison 
Dam, TX, Bank Stabilization', so the issue lies with the benefit/cost 
ratio. We believe that the authorized, on going `Sediment Transport 
Study' will identify benefits due to reduced dredging cost to the 
Navigation Waterway in Louisiana. There is a new technique for bank 
stabilization which could be allowed as a demonstration project under 
this authorized project. This new technique, underwater bendway weirs, 
have proven to be less expensive than conventional methods and more 
efficient in controlling the energy of the river. Much prime farmland 
in Oklahoma and Texas is lost each year to river erosion and we must 
investigate all avenues to correct this problem.
    Flood Control.--You will recall that in 1990 major areas of 
northeast Texas, Southwest Arkansas and the entire length of the Red 
River in Louisiana were ravaged by the worst flooding to hit the region 
since 1945 and 1957. More than 700,000 acres were flooded with total 
damages estimated at $20.4 million. However, it could have been much 
worse. The Corps of Engineers estimates that without the flood control 
measure authorized by Congress over the past several decades an 
additional 1.3 million acres would have been flooded with an estimated 
$330 million in additional flood damage to agricultural and urban 
developments. We continue to consider flood control a major objective 
and request you continue funding the levee rehabilitation projects 
ongoing in Arkansas, Texas and Louisiana.
    Clear Water.--Nearly 3,500 tons of natural salts, primarily sodium 
chloride, enter the upper reaches of the Red River each day, rendering 
downstream waters unusable for most purposes. Several years ago, 
Congress authorized funding for the Truscott Brine Lake project, which 
is located on the South Fork of the Wichita River in King and Knox 
Counties, Texas. After the project became operational in 1987, an 
independent panel of experts found that the project not only continues 
to perform beyond design expectations insofar as providing cleaner 
water, but has an exceptionally favorable cost benefit ratio. Sixteen 
million dollars was appropriated in fiscal year 1995, by the 
Administration, to accelerate engineering design, real estate 
acquisition and initiate construction of the Crowell Brine Dam, Area 
VII and Area IX. Due to a conflict over environmental issues raised by 
the U.S. Fish and Wildlife Service, completion of the SFEIS was delayed 
pending further study to determine the extent of possible impacts to 
fish and wildlife, their habitats and biological communities along the 
Red River and Lake Texoma. In an effort to resolve these issues and 
insure that no harmful impact to the environmental or its ecosystems 
will result, from implementing the Chloride Control Project, a 
comprehensive environmental and ecological monitoring program is being 
implemented to evaluate the actual impacts of reducing chloride 
concentrations within the Red River watershed.
    The Supplement to the Final Environmental Impact Statement was 
completed in August 1996; however, has yet to be released. The 
Assistant Secretary of the Army (Civil Works) directed that a 
Supplemental Assessment Report (SAR) be conducted and completed by 
February 1997. It is imperative that the SFEIS and SAR be released for 
public review and comment to insure all the facts and information are 
available for decisions to be made.
    Additionally, one system, the Wichita Fork of the Red River already 
has Truscott Brine Reservoir completed and one pump station operating, 
pumping brine to the reservoir. A second pump station is complete but 
the pipeline not constructed. It would be a waste of taxpayer monies 
not to complete this system, Wichita Fork, and then monitor this 
ecosystem.
    The Association urges Congress to continue supporting the Chloride 
Control Project in order to assure a clean water supply for 
residential, commercial, industrial, and agricultural uses. This truly 
affects multi-states requiring a Federal project; as the benefits 
affect all four states in the Red River region.
    Operation and Maintenance.--We appreciate the support of your 
subcommittee to support the completion of navigation to Shreveport/
Bossier City which is now providing an increase to our industrial base, 
creating jobs and providing economic growth. It is imperative you 
continue to provide funding to complete navigation structures and 
funding to fully develop recreation sites to fully realize the total 
benefits of this project. We understand the importance to reduce costs; 
however, we must not sacrifice safety. Presently the lock and dams on 
the Red River operate with only one person at night. Any proposal to 
reduce manhours at the lock and dams will jeopardize safety, especially 
since water control levels by the dam gates requires 24 hour 
adjustments. In addition, as a new waterway it is imperative we be 
given every opportunity to fully develop our industries and benefits. 
Reduced hours of operation would hinder that. We request that O&M 
funding levels remain at the required full Corps capability.
    Full O&M funding levels is not only important for the Waterway 
Project but for all our Corps projects.
    We are sincerely grateful to you for the past support you have 
given our various projects. We hope that we can count on you again to 
fund our needs and complete the projects that will help us diversify 
our economy and create the jobs so badly needed by our citizens.
    Civil Work Projects are the one most effective jobs program in the 
Federal government. On an average, 80 percent of the cost of these 
projects goes to the private sector for design contracts and all 
construction. Once completed our communities are provided with the 
infrastructure to promote economic development opportunities. What 
other federal program compares to the benefits received for the dollar 
spent?
    Thank you for the opportunity to present this testimony and project 
details of the Red River Valley Association for the industries, 
organizations and citizens we represent throughout the four state Red 
River valley region. We believe that any federal monies spent on civil 
work projects are really investments in our future and will return 
several times the original investment in benefits that will eventually 
accrue back to the federal government.
    I am always available to provide you and your staff additional 
information or clarification on any issue presented.
                  summary of fiscal year 1998 requests
    NOTE: Projects are not in any order of priority. Project number 
correspond to the backup information in Section IV.
    1. Navigation on the Red River in Southwest Arkansas: WRDA 96 
authorized a feasibility study for this project. Funding is requested 
to initiate the study.
    a. Funds are existing in the `Daingerfield Reach', General 
Investigation Account, Red River Waterway Project. ($1.8 million)
    b. Request reprogramming of the `Daingerfield Reach' funds to the 
Southwest Arkansas feasibility study in fiscal year 1997.
    c. If these funds are not reprogrammed then funds are requested in 
the fiscal year 1998 appropriations.
    d. The local sponsor is prepared to cost share the study, 50 
percent, and has funds on hand.
    Three year, Study Cost = $3,000,000
    Federal = $1,500,000
    Local Sponsor = $1,500,000
    2. Red River Chloride Control Project:
    a. The SFEIS was completed in August 1996. The ASA(CW) decided not 
to release it and directed the Tulsa District to complete a Supplement 
Assessment Report by January 31, 1997 to address alternative options.
    b. The SFEIS must be released for public review and comment to 
insure interested parties have all the project information in which to 
make a decision.
    c. The pump station at Area X has been completed; however, 
construction of the pipeline to Truscott Brine Reservoir has not been 
done. Truscott Reservoir has been completed as well as a second pump 
station and both have been operating since 1987. It would be a waste of 
taxpayer monies not to construct the Area X pipeline which completes 
this self contained system.
    Fiscal year 1998 Funds Requested: $12,000,000
    d. Request funding to start the construction of Crowell Brine 
Reservoir; Area VII and Area IX.
    Fiscal year 1998 Funds Requested: $10,000,000
    3. Red River Below Denison Dam, Red River; Arkansas Levees: 
Continue funding levels for fully funded construction and restoration 
of Levee Item # 5 Miller County Levee District) and Levee Item # A (Red 
River Levee District # 1). Design Levee Item # 6 (Garland Levee 
District) and initiate design for Levee Item # 7 (McKinney Bayou 
Drainage District).
    Funds Requested: $4,000,000
    4. Red River Emergency; Bank Protection; AR and LA: Fully Fund 
Construction of Dickson ($6 mil) and Finn Phase II ($5.4 mil) 
revetments. Complete design and fully fund construction on Black Lake 
($3.5 mil), Hunters Island ($7.1 mil) and Pleasant Valley ($4.9 mil) 
revetments. Initiate design for Float realignment ($300,000)
    Funds Requested: $27,200,000
    5. Red River Emergency; Bank Stabilization between Denison Dam and 
Index, AR: We request the following two items:
    a. Complete the `sediment transport study'.
    b. A `demonstration project' at two sites to analyze the 
effectiveness of a new technique, bendway weirs.
    Funds Requested for a and b: $2,200,000
    6. Red River Waterway Project, LA:
    a. We support the $9.99 million included in the President's budget 
and items of work proposed by the Corps.
    b. In addition, we request additional funding, to insure the 
integrity and safety of the Red River navigation channel is maintained 
for reliable barge transportation as well as continuing with recreation 
features. Complete construction on Eagle Bend Capout and initiate 
construction on Campti Capout, Socot Capout and Ile Au Vaches Dikes. 
Hadden/Ft. Derussy, Ben Routh/Dupree, Saline revetments, Powhatan 
Dikes, East Point Dikes and Moss Capout must be reinforced to maintain 
their integrity. Construct Federal recreation sites at L&D 3, 4 and 5.
    Additional fiscal year 1998 Funds Requested: $9,000,000
    c. Design and construct boat launch facilities in Pool 3; one at 
Natchitoches, LA, and one at Colfax, LA. There is no access to the Red 
River in Pool 3 and as commercial traffic increases it is imperative 
that there be access for safety. These sites will be cost shared 50/50 
with the Red River Waterway Commission.
    Total Funds Required: $3,000,000
    Fiscal year 1998 Federal Funds Requested: $1,500,000
    Local Sponsor Costs: $1,500,000
    7. Cypress Valley Watershed, TX: Request a feasibility study for 
North East Texas Caddo Lake spillway Modification. A local sponsor has 
been identified and willing to participate.
    This study will demonstrate the benefits in flood damage reduction, 
environmental restoration, recreation and water supply to the Cypress 
Valley Watershed system. The total feasibility cost is estimated to be 
$1 million; cost shared 50/50 with the local sponsor.
    Fiscal year 1998 Federal Share: $375,000
    Local Sponsor Share: $375,000
    8. Aloha-Rigolette Project, LA: Construction is underway and the 
funding will continue at Full Corps capability.
    9. McKinney Bayou, AR: The reconnaissance study was completed and 
determined to be economically feasible. This project will go directly 
into PED and cost shared with the local sponsor (Federal--75 percent; 
local sponsor 25 percent) over a three year period.
    Total PED Cost is: $600,000
    Fiscal year 1998 Funds Required: $317,000
    Fiscal year 1998 Federal: $250,000
    Fiscal year 1998 Local Sponsor: $67,000
    10. Bowie County Levee, TX: The plans and specifications will be 
completed in fiscal year 1997. We request a fully federal funded 
construction project.
    Fiscal year 1998 Funding Requested: $900,000
    11. McGrath Creek, TX: Continue construction funding at the level 
of Full Corps Capability. This is supported by the Administration.
    12. Ogden Levee, Little River County, AR: This levee system is part 
of the Federal System and in need of rehabilitation. The Secretary of 
the Army acting through the Chief of Engineers is directed to design 
and initiate construction of the Ogden and Walnut Bayou Levees along 
the Red River. These levees were authorized by the Flood Control Act of 
1946. The amount of $1,000,000 to be expended until gone is requested 
in the bill for this work. The Ogden Levee to be designed to the same 
height as the opposite bank levees, Bowie and Miller County.
    Funding Requested: $1,000,000
    13. Grassy Lake, AR: Project Modifications for Improvement of the 
Environment (Section 1135). The Secretary of the Army acting through 
the Chief of Engineers is requested to expend, within the funds 
provided for the section 1135 program; $900,000 for planning, design, 
and construction of modifications to restore the environmental quality 
of Grassy Lake, Hempstead County, Arkansas, degraded by the 
construction of Millwood Lake, Arkansas.
    Funding Requested: $900,000
    14. Caddo Levee System, LA: Under `Red River Below Denison Dam' 
request the Twelve Mile Bayou Revetment be reenforced to provide 
additional protection to the adjacent federal levee.
    Funds Requested: $600,000
    15. Bossier Levee System, LA:
    a. Have the Corps clear and grub the channel of Loggy Bayou from 
its confluence of the Red River for 7.8 miles. This channel has a 
serious impact on flooding in the upstream.
    Funds Requested: $500,000
    b. Rehabilitate the Red Chute Guideline Levee to a 100 year 
protection level.
    Funds Requested: $3,000,000
    16. Red River Waterway Regional Visitor Center, LA: Request that 
design continue on the Red River Regional Visitor Center which includes 
a facility at Shreveport/Bossier and one at Natchitoches, LA. This will 
be fully federally funded as part of the Waterway Navigation Project. 
Funding has been appropriated for this project.
    17. Red River Waterway, O&M:
    a. WRDA 96 authorized the Corps to insure the oxbows remain 
accessible to the Red River for environmental purposes. The oxbow study 
report is completed and work should commence once approved. The O&M 
funding level must be adequate to address this issue.
    b. The President's budget included $7.7 million for the O&M of this 
project which falls short of capability and needs. The Locks and Dams 
are not to be operating on a full time basis in fiscal year 1998; 
however, the Dams must be operated on a 24 hour basis for water 
control. $500,000 must be added to restore operation to full 24 hour 
operation. Additionally, as a new waterway it is important to allow 
commerce to move to encourage industry to develop.
    c. $2 million are required for revetment repairs to maintain the 
integrity and safety of the channel. Again, this new system must be 
given the full opportunity to develop.
    Fiscal year 1998 President's Budget: $7,700,000
    Restore 24 Hour Operation: $500,000
    Revetment Repair: $2,000,000
    Total fiscal year 1998 O&M Funds Requested: $10,200,000
    18. Operations & Maintenance at Corps Projects: Request that all 
O&M funded projects remain at the level of Full Corps Capability.
    19. Project Support: We will testify to strongly support the 
following Mississippi River Tributaries (MRT) project, LA: Bayou 
Rapides Drainage Structure Pump Plant; Lower Red River South Bank 
Levee, to be funded for $400,000.
                     backup information to request
    Following is backup information and a historical perspective on 
each project request. They are numbered to correspond to each numbered 
project in the Summary of Request, Section III.
    1. Navigation on the Red River at Southwest Arkansas.--Twenty-one 
years ago the Arkansas General Assembly created the Red River 
Commission upon the recommendation of Governor Dale Bumpers, now the 
Senior United States Senator for the State of Arkansas. The Commission 
was vested with the authority to furnish the local cooperation 
necessary for the construction and study of projects and to coordinate 
with the Corps of Engineers and the Congress to develop the water 
resources of the Red River in Arkansas. With navigation now a reality 
to Shreveport, Louisiana, we are prepared to extend water 
transportation into Arkansas. Southwest Arkansas and East Texas are 
economic depressed regions. This project would provide multi-purpose 
opportunities for industries and increased employment. A regional 
impact study would clearly demonstrate the great benefits not realized 
to date. The local sponsor, Red River Commission of Arkansas, has their 
cost share for the study, on hand. A project would provide economic 
benefits to this economically depressed area in the form of increased 
employment of our citizens, a local and national benefit not captured 
in the limited economic analysis made by the Corps in the 
reconnaissance study. There is no doubt that this project is feasible 
and only a full feasibility study will prove that. Most importantly, 
the local cost share, 50 percent, is available now for this study.
    2. Red River basin chloride control project.--Natural mineral 
pollutants in the upper reaches of the Red River Basin are rendering 
downstream waters unusable for most purposes. The primary pollutants 
are chlorides and sulfates.
    The U.S. Public Health Service initiated a study in 1957 to locate 
the natural pollution areas and determine the contribution of 
pollutants from the individual areas to the Red River. It was 
determined that 10 natural salt source areas located in the basin 
contribute a daily average of about 3,600 tons of salt (as NaCl) to the 
Red River. The U.S. Army Corps of Engineers, Tulsa District, entered 
the study in 1959 to recommend measures to control the natural 
pollution. Structural measures were recommended for 8 of the 10 salt 
source areas.
    An experimental project at Area V near Estelline, Texas was 
authorized by the Flood Control Act of 1962. The project consists of a 
9-foot-high by 340 foot diameter earthen dike encompassing a brine 
spring and a 4-foot-wide concrete outlet flume with stoplogs to control 
flow. With the project in operation, since January 1964, surface flow 
from the spring has been suppressed, thus preventing over 240 tons of 
chlorides per day from entering Prairie Dog Town Fork of the Red River.
    Structural measures for chloride control at Areas VII, VIII, and X 
in the Wichita River Basin above Lake Kemp were authorized by the Flood 
Control Act of 1966 (Public Law 89-789), and structural measures for 
Areas VI, IX, XIII, and XIV were authorized by the Flood Control Act of 
1970 (Public Law 91-611). Actual construction, however, was not to be 
initiated until approved by the Secretary of the Army and the 
President. The Flood Control Act of 1970 was amended by the Water 
Resources Development Act of 1976 to eliminate the required approval of 
the President to initiate construction.
    The Water Resources Development Act of 1974 (Public Law 93-251), 
specifically authorized construction of chloride control measures at 
Area VIII, located on the South Fork of the Wichita River in King and 
Knox Counties, Texas. The project includes a low-flow dam with a 
deflatable weir to collect brine flows emitting from the area, Truscott 
Brine Reservoir, located near Truscott, Texas, for brine storage, and a 
pump station and pipeline to deliver the brine to the impoundment. 
Construction began in the fall of 1976 and the project was placed in 
operation in May 1987. Area VIII continues to exceed design 
specifications and currently controls over 168 tons of chlorides daily.
    The Water Resources Development Act of 1986 (Public Law 99-662) 
required that a special panel evaluate the improvement in water quality 
downstream of Area VIII to determine its consistency with the water 
quality assumed in the development of project benefits. A favorable 
report was submitted to the Assistance Secretary of the Army (Civil 
Works) and the Committee on Environment and Public Works of the Senate 
and the Committee on Public Works and Transportation of the House of 
Representatives in August of 1988. Public Law 99-662 authorizes 100 
percent federal funding and construction of the remaining control 
features contingent upon the favorable evaluation of the panel.
    Congress appropriated $5 million in fiscal year 1991, $3 million in 
fiscal year 1992, $6 million in fiscal year 1993, $4 million in fiscal 
year 1994 and $16 million in fiscal year 1995 which was in the 
President's Budget for the first time ever. These funds were to 
continue design and construction of Areas VI, VII, IX and X and the 
Crowell Brine Reservoir. Construction of part of the brine collection 
facilities (pump station and low flow dam) at Area X was initiated in 
September 1991 and is complete. Accelerated design of the remaining 
chloride control features was approved in fiscal year 1994 to permit 
construction as additional funds become available.
    Real estate acquisition for Area VI, VII, IX, and the Crowell Brine 
Reservoir was scheduled to begin in fiscal year 1993, but was postponed 
pending the outcome of the economic re-evaluation report ordered by the 
Assistant Secretary of the Army for Civil Works which was subsequently 
approved in November 1993 and further instructed the Corps of Engineers 
to complete all remaining areas of the project.
    As part of the process to complete a Supplemental Environmental 
Impact Statement (SEIS) USFWS objected to the project in August 1994. 
This was a surprise to the Corps or Engineers since they had been 
coordinating with USFWS since 1991 and there was no indication they 
would deliver a negative opinion. This has stopped all construction 
work and effectively delayed the project by one year even though the 
Corps is continuing with design and land acquisition.
    The SFEIS was completed in August 1996; however, the ASA(CW) 
directed that a Supplement Assessment Report (SAR) be completed by 
February 1997. Presently, we are waiting for the release of the SFEIS 
and SAR for public review and comment.
    3. Red River below Denison Dam.--Red River Levees and Bank 
Stabilization Below Denison Dam is the authorization for constructing 
levees, flood control structures and bank stabilization below Denison 
Dam. The facilities constructed under this authorization are the first 
lines of flood protection for the Red River Valley and its citizens. 
Accelerated and new caving of the river banks of the Red River continue 
to endanger existing flood control structures and levees as well as 
valuable agricultural lands, highways, railroads, utilities, home and 
other valuable resources and improvements within the Red River Valley.
    A systematic program of bank stabilization and other flood control 
measures can prevent these disastrous losses that are presently 
occurring.
    Because of the construction of the Red River Waterway Project, a 
dangerous tendency has developed to de-emphasize construction of flood 
control and bank stabilization works under the Red River Levees and 
Bank Stabilization program. This tendency should be halted and reversed 
least the impression be created that the program is no longer needed or 
has been completed. Following the disastrous flood of May 1990, there 
can be no doubt of the importance of properly maintained levees and of 
bank stabilization. All areas not protected by properly maintained 
levees were flooded and the only protection from enormous bank caving 
was where revetment projects have been constructed by the Corps.
    The Red River Levees and Bank Stabilization Below Denison Dam 
Project is the only comprehensive flood control program on the Red 
River containing authorization for construction of a variety of flood 
control measures, levees and other flood control works. Some of the 
projects planned in the original authorization project have not been 
completed and these must be constructed in order for the citizens of 
the Red River to derive necessary flood protection.
    Only minimal funds have been appropriated by Congress for the Red 
River Levees and Stabilization Below Denison Dam in recent years. Bank 
caving on Red River has progressed in several locations to a critical 
state. Railroads, major public highways, levees and other flood control 
works are threatened, and unless action is taken in the near future, 
these facilities will be destroyed, endangering lives and property of 
the citizens of the Red River Valley.
    Another example of flood control work needed is levee reshaping 
along the main stem of Red River in the state of Arkansas. Many of 
these levee sections were severely tested by the May 1990 flood, and it 
is apparent that reshaping is needed to increase their integrity, 
substantially reduce maintenance costs, and provide additional 
structural strength at appropriate elevations needed to protect 
citizens, agricultural land and transportation systems. The Corps has 
completed an engineering study of the Levees on the Red River from 
Index, AR to the Louisiana State Line to establish and prioritize levee 
locations that have deficient grades, slopes and crown. This report 
included the recommendations with construction costs for all identified 
areas. Any funds not expended for the engineering study should be 
applied to the highest priority area to develop contracts and 
construction plans and drawings. The first phase of construction at the 
Miller County Levee System was completed in 1995.
    In summary, it is imperative that Red River Levees and Bank 
Stabilization Below Denison Dam continue as authorized by Congress and 
that adequate funding be appropriated to accomplish the construction of 
this needed protection.
    4. Emergency bank protection.--Although Federal projects have been 
authorized for flood control and navigation, many active caving banks 
cannot be stabilized because they are not yet sufficiently advanced or 
not included in earlier authorizations. The result is continuing, 
rampant destruction of valuable lands, threatening vital flood control 
facilities and endangering high-cost improvements such as bridges, 
pipelines, highways, railroads, utilities, cities and towns.
    It is urgent that adequate funding of the item ``Emergency Bank 
Protection'' be continued to construct bank stabilization work as early 
as possible in the most critical locations instead of waiting several 
more years and experiencing the loss of millions of dollars due to 
damages. Further, continued neglect of these caving banks will 
substantially worsen alignment of the River, making future navigation 
realignment and stabilization much more costly and difficult. Many 
presently caving banks have an existing alignment that is usable for 
the navigation channel and should be preserved now.
    5. Bank stabilization--Index, Arkansas to Denison Dam.--Widely 
fluctuating stages and high flows during the past several years have 
caused sharp increases in bank caving along the Red River from Index, 
AR to Denison Dam. This accelerated bank caving has caused the loss of 
valuable, vital improvements and non-replaceable prime agricultural 
lands. Flood control structures and levees which protect the Valley 
from disastrous floods are also endangered. These disastrous losses can 
be stopped by a systematic program of bank stabilization. Progressive 
construction of such a program is absolutely essential to the safety 
growth and well-being of the Red River Valley. To further delay this 
vitally needed protection would be short-sighted.
    In view of the fact that construction of bank stabilization is so 
important to the citizens along the Red River boundary of Oklahoma and 
Texas we strongly recommend allowing the Corps of Engineers to proceed 
with a ``demonstration project.'' There are new techniques which we 
believe are less expensive with better results than the traditional 
methods. One new technique is the underwater bendway weir. This 
demonstration project will be evaluated along with the ongoing 
`sediment transport' study to determine the potential for a large scale 
bank stabilization project.
    6. Red River waterway project navigation to Shreveport-Bossier 
City.--The Red River Valley Association and Louisiana delegation are 
appreciative for the completion of Locks and Dams 4 and 5. Navigation 
to Shreveport-Bossier City will significantly boost the economy 
throughout the river basin.
    There is still work ahead of us to maintain and develop the 
navigation channel. It is also imperative that funds be appropriated to 
continue construction on navigation structures for this waterway to 
insure reliable, safe commercial navigation.
    The Red River Valley Association encourages and supports the 
continuation of the Loggy Bayou mitigation project and initiation of 
the Bayou Bodcaw mitigation. These are important environmental projects 
for the overall system of the Red River.
    Recognizing that recreation is an integral component of the Red 
River Waterway Project, the Red River Valley Association supports the 
development of recreational facilities as a part of the overall project 
construction. The Master Plan for Recreation is being re-evaluated by 
the Red River Waterway Commission of Louisiana and the Corps of 
Engineers. We support a quick completion of this re-evaluation, public 
comment, and then funding to construct the recommended sites.
    7. No additional information.
    8. Aloha-Rigolette project.--This project, initially authorized in 
1941 and constructed during the 1948-54 period, provides for the 
protection during high stages of the Red River of some 58,000 acres of 
alluvial land. Drainage from 340,000 acres that must flow through 
protected areas during lower river stages is disposed of by gravity 
flow through two 10 foot by 10 foot gated concrete drainage structures 
in the levee at the lower end of the project. This protected area has 
continued to develop agriculturally since construction of the project 
and now additional gates are needed to allow adequate gravity drainage 
during low river stages. As a result, local interests requested that 
additional studies be made of the project, paying particular attention 
to the adequacy of the flood gate which has now been determined to be 
significantly inadequate for current conditions.
    A feasibility study was completed by the New Orleans District, 
Corps of Engineers in June 1989. The Red River Valley Association urges 
that Congress appropriate the full capability of the Corps fiscal year 
1998 budget to continue construction activities for the project on the 
Bayou Darrow flood gate, clearing and snagging of channels, the low 
flow structure and continued mitigation.
    9. McKinney Bayou project, AR.--The Corps of Engineers completed a 
reconnaissance study of drainage in Miller County, Arkansas. The 
project is known as the McKinney Bayou Project as it is the principal 
drainage ditch in the County. Due to the thousands of acres of land 
cleared in Miller County during the past 25 years, the ditch is grossly 
inadequate to handle the drainage after heavy rains. The Reconnaissance 
study had a high B/C ratio and, therefore, was recommended to go 
directly to Planning, engineering and design, (PED). A local sponsor 
has been identified to cost share PED; Federal 75 percent/local sponsor 
25 percent.
    10. Bowie County levee, TX.--Major flooding along the Red River in 
May 1990 severely tested the integrity of the Bowie County levee 
located along the right bank of the Red River north of Texarkana, 
Texas. Had it not been for emergency measures taken by the U.S. Army 
Corps of Engineers and local interests, the levee would have been 
destroyed during the flood. It is the opinion of the Corps that the 
levee would fail if subjected to another flood of the magnitude 
encountered in May 1990. Replacement or restoration of the levee is 
necessary to protect approximately 7,000 acres of prime agricultural 
land as well as residential and farm structures.
    Additionally, this levee system protects the land side of the 
Miller County levees in Arkansas. The Arkansas levees are being 
rehabilitated at full federal expense; therefore, a case has been made 
that the Bonnie County levee should be funded the same as these levees. 
Again, the Arkansas levees would not be of any value should the Bowie 
County levee fail.
    In fiscal year 1997, Congress directed the Corps to complete 
designs and specifications for two options; federally preferred and 
locally preferred options. It is our intention to have a fully funded 
federal project for the locally preferred option.
    11. McGrath Creek project.--McGrath Creek is a tributary stream to 
Holliday Creek, and has a highly urbanized 5.6 square mile drainage 
area located in the heart of the City of Wichita Falls. On May 12 and 
13 of 1982, a flood occurred which resulted in flood damage in the 
amount of 21.5 million dollars. Floods have reoccurred on the average 
of twice per year with annualized damage of approximately 1.6 million 
dollars each and every year. In 1986, floods in the Wichita Falls 
region resulted in two fatalities, one being at the juncture of 
Holliday Creek and McGrath Creek.
    The City of Wichita Falls supports the construction of the 
$12,100,000 McGrath Creek Flood Control facility, and entered into a 
cost-sharing agreement with the federal government for the local match 
of 25 percent. Final plans and specifications have been completed by 
the Corps of Engineers. Construction has commenced and is a project 
supported by the Administration.
    12. Little River County, Ogen levee, AR.--The Congress appropriated 
$150,000 in fiscal year 1992 and $237,000 and $400,000 in the ensuring 
fiscal years to conduct in Little River County a feasibility study. The 
feasibility study is to explore the modification of existing levees and 
the construction of new levees to avoid a possible repeat of the 
devastating flood in May of 1990. The PED cost will be 100 percent 
federally funded. We request funding and direction for the Corps to 
initiate and complete plans, engineering and design (PED).
    13. No additional information.
    14. Twelve Mile Bayou Revetment.--The Twelve Mile Bayou Revetment 
on the mainstem Red River, is not functioning properly and the Red 
River is eroding the bank behind the revetment. A federal levee, along 
this bank is dangerously close to being threatened. The revetment must 
be reinforced in order to insure the integrity of the federal levee 
system.
    15. Bossier levee district, Bossier Parish, LA.--There is a 
drainage channel issue which should be the responsibility of the Corps 
of Engineers to maintain. This is Loggy Bayou with its confluence on 
the Red River, river mile 194.1, with the channel in question extending 
approximately 8 miles upstream into Loggy Bayou.
    Loggy Bayou is the final and only channel that drains a vast area 
of Northwest Louisiana and part of Arkansas water into the Red River. 
The headwaters start in Columbia County, Arkansas and the drainage area 
includes large parts of Webster, Beinville and Bossier Parishes in 
Louisiana. There are no other diversions for these waters to the Red 
River except through Loggy Bayou.
    In 1943 the Bossier Levee District agreed to maintain the last 7.8 
miles of Loggy Bayou before it enters the Red River. Conditions have 
changed drastically since 1943, to include: the diversion of Coushatta 
Bayou into the Loggy Bayou; the channel is now approximately 20 feet 
deeper due to increased drainage flows and the Red River Waterway 
Project has pooled the water into this section of Loggy Bayou 
permanently raising the water level. The Bossier Levee District does 
not have the equipment, expertise or funding to keep the channel 
maintained so there is now a real threat for increased flooding 
upstream. Since there have been considerable changes to the Loggy Bayou 
Watershed, beyond the control of the Bossier Levee District, and the 
waters drained are multi-state it is requested that the Corps of 
Engineers be directed to maintain the channel in Loggy Bayou, under the 
`Red River Waterway Project', Operations and Maintenance, from its 
confluence with the Red River upstream for approximately 8 miles.
    16. No additional information.
    17. No additional information.
    18. No additional information.
    19. No additional information.
   support resolution: shreveport chamber of commerce, shreveport, la
               transportation-water--red river navigation
    Issue.--The Red River Waterway Project has been completed from the 
Mississippi River to Shreveport/Bossier City, Louisiana. Over the next 
few years the navigation structures (Dykes & Revetments) need to be 
adjusted and some may be added. In addition, it will take approximately 
$11 million per year to operate the system.
    Why important.--For economic development to be fully realized we 
must operate the Red River in a reliable manner for industry to use it 
as a major transportation system. The navigation channel must be 
maintained at a 9-foot draft for safe use. If the channel is not 
properly maintained, industry will be reluctant to use the Red River. 
The Oxbows created by the project must be kept open to the river and 
allowed to become lakes. Funding must be appropriated to ensure this 
environmental initiative is maintained.
    In fiscal year 1997 Congress authorized funding for a Regional 
Visitor Center for the Red River Waterway Project. It will be for dual 
sites within the visitation corridor with one site at Natchitoches,, LA 
and a second site at Shreveport/Bossier, LA. The fiscal year 1997 
funding was to initiate design and construction. We request funding in 
fiscal year 1998 to continue this effort.
    The project Recreational Master Plan has been completed and it is 
important to execute the plan as soon as possible. There is limited 
access to the Red River and these sites are necessary for safety as 
well as the economic benefits of recreation.
    Our position.--We thank you for the funds which completed the Red 
River Waterway Project and we request funding to continue on projects 
for navigation and recreation.
    It is imperative that $11 million be appropriated for Operation & 
Maintenance functions for a safe, reliable waterway.
    We support the dual site Visitor Center for the Red River Waterway 
and request continued funding for the design and construction 
activities.
     transportation-water--red river basin chloride control project
    Issue.--The first comprehensive study of the water quality of the 
Red River basin was initiated in 1957 by the U.S. Public Health Service 
under the authorization of the Federal Water Pollution Control Act. It 
was determined that ten natural salt source areas contribute a daily 
average of 3,600 tons of salt per day to the river. This renders 
downstream waters unusable for most purposes. Structural measures to 
help control the chloride pollution at 8 of the 10 sites were developed 
by the Tulsa District, Corps of Engineers. These plans led to 
Congressional authorization in the Flood Control Acts of 1962, 1966 and 
1970. The first structure was completed in January 1964 and the second 
in May 1987. The Water Resources Development Act of 1986 authorized the 
construction of the remaining sites.
    Approximately one-third of the project cost has been expended. The 
total project is expected to cost $303 million.
    The Tulsa District Corps of Engineers has completed the Supplement 
to the Environmental Impact Statement (SEIS). The Assistant Secretary 
of the Army (CW) directed the District to submit a Supplemental 
Assessment Report on alternatives by January 31, 1997.
    Why important.--Natural mineral pollutants (primarily chlorides and 
sulfates) in the upper reaches of the Red River Basin are rendering 
downstream waters unusable for most purposes; therefore, the Red River 
Chloride Project is imperative in order to realize full utilization of 
the surface water supplies in Louisiana (as well as Texas, Oklahoma and 
Arkansas). More than 1,000 miles of streams in the river system are 
severely contaminated by naturally occurring brine and is not suitable 
for municipal, industrial or agricultural purposes.
    The benefits of the Red River Basin Chloride Control Project will 
be improvements in water quality that will allow use for municipal, 
industrial, agricultural and recreational purposes. The added benefit 
will be the jobs created resulting from the implementation of the 
Chloride project.
    Our position.--We support this project in its present form and 
request the release of the SEIS for public review and comment. We 
support and encourage funding at the levels necessary to complete the 
remaining costs of the project by the year 2003. Construction must 
resume in 1998. It is imperative that the pipeline from Area VIII 
pumpstation to Truscott Brine Reservoir be constructed, as well as the 
initiation of Crowell Brine Reservoir.
      transportation-water--caddo-bossier parishes port commission
    Issue.--Development of the Caddo-Bossier Port Complex to access 
usage of the $1.8 billion Red River Waterway Project and to take 
advantage of the $68,000,000 annual transportation savings projected by 
the U.S. Army Corps of Engineers. Local investment through December 
1996 is $55,000,000 with private investment projected at $55,200,000 by 
five (5) companies. The first ground breaking by Red River Terminals 
(Atlas Processing/Pennzoil Products Company and Hollywood Marine), was 
held January 25, 1996 for a petroleum distribution complex to be 
operational by March 1997.
    Why important.--Create 5,000 direct jobs, coupled with up to 15,000 
indirect jobs in our communities over a 20 year period.
    To compete in a global economy.
    Lower transportation costs (annual savings $68,831,000).
    Private investment potential. More than $55,000,000 in private 
investment is today projected at the Port complex site.
    A multi-transportation network is now in place with I-49, I-20, 
proposed I-69, Shreveport Regional Airport, three railroads and Red 
River water transportation.
    Our position.--Support the continuation of funding for Red River 
Waterway maintenance as presented in the fiscal year 1997 Federal 
budget request in order to insure navigation to the Port of Shreveport 
Bossier and to have the Red River working for each area business and 
citizen.
        Prepared Statement of the Caddo/Bossier Port Commission
    On behalf of the citizens of Northwest Louisiana, the Caddo-Bossier 
Parishes Port Commission strongly urges the Congress of the United 
States to allocate the necessary monies for the Red River Waterway 
Project for fiscal year 1998 so the Red River can be operated in a 
reliable manner for industry to use it and in order to ensure the 
viability of the $1.8 billion investment made over the last twenty 
years by the taxpayers of this country.
    The Port of Shreveport-Bossier is beginning regular operations at 
the Port complex site this year. It stands today as a longtime dream 
with a potential proving to exceed even the most optimistic 
projections. With local taxpayer investment guaranteed by a 1993 
property tax, the Port's infrastructure is growing to meet the demands 
of a rapidly expanding customer base. Public investment in the Port 
complex today stands at more than $58,000,000. Projected investment by 
private business announced at this time is more than $55,000,000.
    Progress toward our goal of becoming a premier multi-modal 
transportation system is excellent. Attached for your information is 
Port background information, highlights of 1996 accomplishments and the 
Board of Commissioner's 1997 program of work.
    Results of these efforts should provide a sense of pride to all 
members of Congress who believed in the Red River Navigation Project. 
You recognized the possible benefits, the job-generating capabilities, 
the advantageous cost benefit ratios. And these are becoming reality at 
The Port of Shreveport-Bossier.
                                mission
     To be a public stimulus for economic development in the region by 
providing multi-modal transportation service and infrastructure for 
domestic and international commerce and trade which will foster job 
creation, coupled with dollar investment, in and for Caddo and Bossier 
Parishes.
                          governance/operation
    The Port of Shreveport-Bossier is governed by the nine member 
Caddo-Bossier Port Commission. The Commission sets policies and 
regulates waterborne traffic and commerce through Caddo and Bossier 
parishes. An eight member staff manages the Port's daily operations. 
Logistic Services, Inc./SSA is the Port Operator.
                       location/size of the port
    The Port of Shreveport-Bossier owns (1) 2,000 acres located just 
south of Shreveport's city limits on the west side of Red River and 
bordered by Louisiana Highway 1 and the Union Pacific main line and (2) 
a 10-acre site in southwest Shreveport, the Ark-La-Tex Intermodal 
Center.
                    river port site characteristics
    Shallowdraft navigation channel 9 feet deep by 200 feet wide.
    2,000 acre complex with heavy and light industrial zoning.
    125 acres devoted to river usage infrastructure.
    Full utilities, 3.5 million gallon above ground water storage.
    Union Pacific main line rail, connection with KCS.
    22,500 linear feet rail track within facility.
    Rapid access to I-20 and I-49.
    Two 24 foot wide access roads off of LA Highway 1, both of which 
exceed state highway load limits.
    General cargo and liquid wharves.
    Security on site.
    Land available for lease; suitable for industrial development.
                           an intermodal port
    Committed to intermodalism from the beginning, the Port of 
Shreveport-Bossier gives shippers a complete range of transportation 
options--rail, truck and barge. Intermodal Container Handling Freight 
facility has COFC/TOFC handling capabilities for container freight.
                     highlights 1996 accomplishment
    1. Red River Terminals held a groundbreaking press conference in 
January on their liquid bulk storage terminal property at the Port 
complex and construction continued throughout the year.
    2. Progress on Port complex operational status continued.
    A. Cargo began moving at the end of the year even though Port 
infrastructure was not yet complete. The first export product was 
shipped October 17 by Beaird Industries. A 331,000 pound pressure 
vessel was followed by three others, bound for Nigeria through Morgan 
City. In November, six barges of rock arrived as a joint venture 
between CTS&D and Vulcan Materials.
    B. The Board of Commissioners approved the purchase of the fleet/
switch boat M/V Colville in November. The 800 hp boat is being 
reconditioned in Orange, TX for delivery in 1997.
    C. Security service was initiated.
    D. Began acquisition process for two rail switch engines.
    E. Proposals were accepted for gas distribution network system.
    3. Progress on Port complex infrastructure and facilities 
continued.
    A. Construction essentially completed in 1996: (1) water service--
extension of lines, 2.5 million gallon elevated storage tank, and 
booster stations (water and fire); (2) sewer service; (3) second liquid 
wharf (Red River Terminals); and (4) 15,000 if on-dock heavy rail with 
side track and truck/rail certified weigh scales.
    B. Under construction: (1) 7,500 if rail track extension south; (2) 
30,000 sf general cargo transit warehouse with traversing 50 ton 
overhead cantilevered bridge crane; and (3) 2.5 acres open storage.
    C. In design: (1) additional liquid dock; (2) road and rail north 
extension; and (3) Reyncor access road.
    4. Acquired 7 acres for location of City of Shreveport fire station 
which will serve Port complex and southeast Shreveport. Temporary 
facilities put in place.
    5. Received fiscal year 1996-97 Capital Outlay Priority Two 
approval for $1 million for land acquisition and fiscal year 1996-97 
Port Priority Program funding approval of $1.5 million for road and 
rail extensions. Capital Outlay money not allocated by the end of the 
year.
    6. Applications turned in for further funding to (1) Capital 
Outlay, resubmitted $1 land acquisition in case the money is not funded 
in fiscal year 1996-97 funds; (2) Port Priority (a) $3 million for road 
and rail extension and (b) $360,000 for fleeting dolphins; and (3) EDA 
Preapplication for $25,000 for Strategic Master Plan assistance.
    7. Strategic Master Plan process initiated and consultant selected.
    8. Foreign Trade Zone # 145 expansion application approved.
    9. The second annual Port Night, jointly sponsored by our Port, the 
Port of New Orleans and the International Trade Association of Dallas-
Fort Worth, was successfully held in September. Re-edited Port video 
presented during program.
               board of commissioners 1997 plan of action
    1. Continue to develop necessary infrastructure and facilities, 
following the adopted Infrastructure Plan, adapting to the needs of 
customers as they occur. (a) Work to close out major infrastructure 
projects under construction. (b) Facilitate customer-driven 
infrastructure demands. (c) Consider environmental enhancements. (d) 
Expand river fleeting capacity.
    2. Attract (1) users for Port multimodal transportation services, 
expanding tonnages, and (2) businesses and industries for Port complex 
location.
    (a) Begin marketing the Port as an operating multimodal 
transportation facilitator, continuing marketing efforts along the I-20 
and I-30 corridors between Shreveport and Dallas-Fort Worth metroplex.
  --Continue Port Night with the Port of New Orleans in Dallas-Fort 
        Worth.
  --Monitor one-on-one contacts between the Port, Logistic Services, 
        and Port users.
    (b) Continue to work closely with local Port users and area 
businesses.
    (c) Update promotional materials, modifying 1993 marketing brochure 
and printing small pamphlet.
    (d) Continue to work with other economic development agencies.
    (e) Participate in regional/national business promotions of 
Shreveport-Bossier.
    (f) Facilitate foreign investment/international industrial 
recruitment.
    3. Develop/monitor Port operations in concert with Port Operator 
Logistic Services, Inc., emphasizing the transfer from construction 
activities to full operation.
    (a) Fill operating equipment needs, specifically fleet boat, 
locomotives, safety boat, tractor/bushhog, POL spill equipment and fire 
station rolling stock.
    (b) Make appropriate staffing arrangements.
    (c) Establish operating SOP's, parameters, tariffs in concert with 
Port Safety Council and Logistic Services.
    4. Work with the selected consultant to develop a longterm 
Strategic Master Plan for the Port of Shreveport-Bossier, ensuring the 
Port's development and best use of resources to the Year 2010.
    5. Maximize available financial resources, continuing to leverage 
local tax dollars to maximize taxpayer investment.
    6. Continue to pursue additional Port land expansion as needs 
transpire.
    7. Communicate activities to all citizens of Caddo and Bossier 
Parishes, continuing minutes mail-out and speaking engagements.
    8. Continue interaction with city, parish, state, and federal 
authorities/agencies on legislative issues of importance.
                                 ______
                                 
    Prepared Statement of Ted M. Falgout, Executive Director, Port 
                              Fourchon, LA
    The 1996 WRDA authorized Port Fourchon, LA as a new start project. 
Unfortunately, the Clinton Administration Budget does not propose 
funding this project in fiscal year 1998.
    Few people recognized the tremendous importance of Port Fourchon to 
this Nation's energy supply. Mainly because its significance has 
suddenly skyrocketed with the passage of the Deepwater Royalty Relief 
Act by Congress and the resulting boom in deepwater drilling activity 
this country is experiencing.
    Port Fourchon, geographically, economically, and environmentally is 
unquestionably the most advantageous land base facility to support the 
record discoveries being drilled in deep waters of the Central Gulf of 
Mexico. An astounding 75 percent of the 82 deepwater prospects 
identified in the Gulf are in the Port Fourchon service area.
    This has resulted in unprecedented growth of the port and tripling 
of cargo tonnage in just three years. Currently over 30 million tons 
are being shipped intermodally through Port Fourchon and this number is 
expected to continue to dramatically increase.
    The new generation deepwater supply and service vessels are 
dependent on the deeper drafts authorized by Congress. Companies are 
currently investing hundreds of millions of dollars in these new 
generation vessels with plans to operate them out of Port Fourchon. It 
is essential that this channel be dredged this fall before the winter 
low tides cause serious navigation problems.
    None of the justification I have just provided was included in the 
benefits of the Corps of Engineer Study which led to project inclusion 
in WRDA 96. This is new business directly associated with deepwater 
drilling and is critical to this country's energy needs. This same 
activity is generating the U. S. Treasury over $2 billion annually in 
federal lease sales and royalties. The last two quarterly lease sales 
have generated a record $1.3 billion.I11In addition, Port Fourchon is 
the land base facility for the Louisiana Offshore Oil Port (LOOP), this 
nation's only offshore oil port. In 1996, LOOP handled 13 percent of 
the entire nation's imported oil. It is connected by pipeline to 30 
percent of the U. S. refining capacity. It also generates the U. S. 
Treasury millions of dollars in imported duties.
    Considering the aforementioned National Energy significance and 
substantial revenue base, it is almost unbelievable that the Port 
Fourchon, LA new start project is not included in the Administration 
budget. Adding to this injustice is the minimal amount of money needed 
to construct this project.
    It is estimated that the total Port Fourchon Navigation Project 
cost would be approximately $5.7 million. There currently exists a 
tremendous window of opportunity in that the West Belle Pass Coastal 
Wetlands Protection and Restoration Act (CWPRA) project is scheduled 
for construction this fall. This project, although not a navigation 
project, is being constructed by the Corps and will result in much of 
the channel being dredged as a borrow area for fill needed in marsh 
restoration. It is estimated, for an additional million dollars in 
federal appropriation, the congressionally authorized navigation 
project could be constructed. This would result in the savings of 
millions in first costs construction of the Port Fourchon navigation 
improvements and render the channel deep before the winter low tides 
cause severe impact.
    This Commission respectfully requests you seek to include in the 
Energy and Water Appropriations Bill, language that would direct the 
Secretary of the Army through the Chief of Engineers, to begin 
construction on the Port Fourchon, Louisiana Channel in the amount of 
$1,000,000.
    Please do not hesitate to call if any further information is needed 
or this Commission can be of any assistance. We strongly feel that a 
visit by you or your committee to this unique area would be extremely 
beneficial and we offer to make all necessary arrangements.
                                 ______
                                 
     Prepared Statement of Ronnie A. Riley, Vice President, Lower 
              Mississippi Valley Flood Control Association
    Mr. Chairman and Members of the committee, I am Ronnie Riley, 
County Executive of Gibson County, Tennessee and serve as the Tennessee 
Vice-President of Lower Mississippi Valley Flood Control Association. I 
appreciate the opportunity to make this presentation a part of the 
official congressional record relative to funding for Mississippi River 
and Tributaries Projects.
    Mr. Chairman, the infrastructure is vital to the economic, social 
and cultural well being of this nation. The Mississippi River and 
Tributaries Project deals with all the aspects of the nation's water 
resources infrastructure. The policies being proposed for upfront 
funding at this time would in effect lock up funds unnecessarily at the 
expense of completing projects already authorized and begun.
    This action needs the full debate out in the open by the Congress. 
It does not need to be determined by some appointed bureaucrats. I can 
personally testify to the devastating losses our citizens in the lower 
Mississippi Valley are continuing to suffer as a result of the 
Mississippi River and Tributaries Project not yet being completed. In 
1982 I saw our County Courthouse surrounded on three sides by water 
less than 100 yards away. The same event resulted in the loss of two 
(2) lives. This scenario is repeated and will continue to be repeated 
in the valley until the Mississippi River and Tributaries Project is 
completed. The Corps has capabilities to properly expend approximately 
$350,000,000. We urge you to seriously consider restoring funding to 
that level which will assure an orderly and timely completion of this 
much needed project.
    Thank you very much for allowing me to make this statement a part 
of the record.
                                 ______
                                 
  Prepared Statement of James E. Wanamaker, Chief Engineer, Board of 
                    Mississippi Levee Commissioners
    Mr. Chairman and Members of the Committee: I am James E. Wanamaker, 
Chief Engineer for the Board of Mississippi Levee Commissioners, 
Greenville, Mississippi, and I have the privilege of presenting this 
statement on behalf of this Board and the citizens of this Levee 
District. This District consists of the counties of Bolivar, Issaquena, 
Sharkey, Washington, and parts of Humphreys and Warren in the Lower 
Yazoo Basin in Mississippi.
    The Lower Mississippi Valley Flood Control Association will present 
a general statement in support of the appropriation of $350,000,000 for 
fiscal year 1998 for the construction, surveys, advanced engineering 
and the operation and maintenance of the Mississippi River and 
Tributaries Project. The need for the timely completion of this Project 
is currently emphasized by the flooding taking place in the Valley. The 
Lower Mississippi River receives flood water from 41 percent of the 
continental United States. Our section of the Mississippi River has 
experienced water levels above flood stage for the past 5 years.
    The proposal by the administration to initiate full funding of 
flood control projects must be rejected by the Congress. This policy if 
adopted will hold back millions of dollars for the construction of many 
flood control, navigation, and environmental restoration projects that 
could be utilized to benefit the economy of the Nation. The current 
policy of continuing authority has worked for decades to assure that 
the country's economic and environmental status is the envy of the 
world. This change will ignore the needs of the people in the 
Mississippi Valley.
    It is imperative that the work on the Mainline Mississippi River 
Levee Enlargement Project move forward as fast as funding will allow. 
For many years the ability of the local sponsor to furnish rights of 
way controlled the construction schedule for this work. Projected 
outyear funding for these much needed projects is now the controlling 
factor. Alternative construction schedules being considered by the 
administration will extend the completion date and could increase the 
overall project cost by as much as 300 percent. We are requesting that 
funding for the Mississippi River Levee Item be increased by $3,000,000 
to provide the Vicksburg District with the $11,000,000 needed to insure 
timely completion of the enlargement work in Mississippi, Louisiana and 
Arkansas.
    As we have discussed for the past several years the Reformulation 
of all remaining work in the Yazoo Basin has delayed construction for 
as much as 5 years on some items. Now that construction has been 
restarted on the Upper Steele Bayou and Upper Yazoo portions of this 
Project, additional funding to allow the Corps of Engineers to proceed 
at maximum capability is critical.
    We request that the Congress provide $6,000,000 for the Yazoo 
Basin, Big Sunflower River and Tributaries Item to insure that work 
protecting the City of Greenville is completed before another storm 
event similar to 1991 is experienced. This money will allow Item 2 on 
Black Bayou to continue and the award of Item 2 on Main Canal that 
extends into the City of Greenville.
    Work on the Upper Yazoo River is continuing northward toward 
Greenwood, Lambert, Marks and Tutwiler. Again, we request that funding 
be sufficient to allow the Corps of Engineers to proceed at maximum 
capabilities completing as much of this project as possible before 
another storm similar to 1991 is experienced in the Delta. We ask the 
Congress to provide $15,000,000 for the Yazoo Basin, Upper Yazoo 
Project.
    With the funding that you have so generously provided to complete 
the Engineering Report and Supplemental Environmental Impact Statement, 
the Levee Boards are ready to initiate construction of the Big 
Sunflower River-Bogue Phalia Operation and Maintenance Project at the 
earliest possible date. The residents of south Washington county have 
just last week been on the brink of another flood disaster, and 
continue to watch spring storms pass through wondering if their homes 
will flood again this year. We request that the Operations and 
Maintenance budget include sufficient funds to initiate construction of 
this Project. The Corps will require $3,000,000 to initiate 
construction.
    The completion of the Yazoo Basin, Demonstration Erosion Control 
Project, will reduce the need for maintenance funds in future years. 
The removal of sediment from the waters exiting the hill area of 
Mississippi into the Delta's streams will help reduce the frequency of 
maintenance dredging. This will also help The Corps of Engineers in the 
operation of the flood control reservoirs by allowing the design 
discharges to take place, reducing the threat of flooding to the 
eastern portions of the Delta. We request that the appropriation of 
$17,000,000 be included for fiscal year 1998.
    We are grateful for the consideration given to us each year by the 
Committee and appreciate the opportunity to present our requests to you 
at this time.
                                 ______
                                 
    Prepared Statement of M.V. Williams, President, West Tennessee 
                        Tributaries Association
    Mr. Chairman and distinguished members of the Committee, my name is 
M.V. Williams and my home is in Friendship, Tennessee between the 
Middle and South Forks of the Forked Deer River. I am the President of 
the West Tennessee Tributaries Association. It is also my pleasure to 
serve as Chairman of the Executive Committee of the Lower Mississippi 
Valley Flood Control Association with headquarters in Memphis, 
Tennessee. This statement on behalf of the Association presents their 
views on the fiscal year 1998 Budget for the Mississippi River and 
Tributaries Project. I will present several items of general interest 
to all our Membership. Other Members of the Association will present 
statements that will concern specific items of interest.
    Since there are new members of the Sub-Committee I will briefly 
discuss the Lower Mississippi Valley Flood Control Association which is 
an Agency composed almost entirely of public bodies having local 
responsibility for flood control, drainage, bank stabilization and 
navigation improvements in parts of Illinois, Kentucky, Mississippi, 
Tennessee, Arkansas, Missouri and Louisiana. Our members are public 
officials who for the most part are elected by the people. The 
Association represents practically all of the levee and drainage 
districts, municipalities, port and harbor commissions and other state 
agencies in the Lower Mississippi Valley, extending from Cape 
Girardeau, Missouri to the Gulf of Mexico. These organizations and 
agencies are political subdivisions of the various states in which they 
are organized and function. We provide an agency through which the 
people of the Lower Mississippi Valley may speak and act jointly on all 
flood control, navigation, bank stabilization and major drainage 
problems. We have appeared before the Sub-Committee and served the 
people in the Lower Mississippi Valley for well over sixty years.
    In the past the principal reason for our appearance before the Sub-
Committee was to provide data to justify adequate appropriations to 
complete the Mississippi River and Tributaries project as quickly as 
possible. That has not changed even though this is a unique year and 
the first time in those 60 plus years that we have not been granted the 
opportunity to present oral testimony. We are disappointed that this 
long-standing experience has been terminated this year and we express 
the hope that this is a temporary condition that will only last for 
this one year. To extend this restriction to future years will, we 
believe, be detrimental to the well being of our Country.
    We have closely examined the President's Budget Request for fiscal 
year 1998 and find that it is completely inadequate for the Mississippi 
River and Tributaries Project. The $266,000,000 that the President has 
requested is the first time since fiscal year 1982 that the budget 
request for the MR&T Project has fallen below $300,000,000.
    This Association has long held the firm conviction that an Annual 
Appropriation of $400,000,000 is required to complete the Mississippi 
River and Tributaries Project in the most economically feasible time. 
We request that this Committee strongly consider a minimum 
appropriation for fiscal year 1998 for the Mississippi River and 
Tributaries project of $350,000,000.
    In requesting that such moneys be appropriated for flood control 
and navigation works of the Lower Mississippi Valley, we are not 
unmindful of the fact that in these critical times our Nation is being 
called upon to rectify an economic condition that needs immediate 
attention. We feel that we are justified in urging appropriations for 
our project for the reason that the assets and resources of this great 
Nation must not be neglected during these times. We know of no other 
appropriation which contributes as much to national wealth and 
resources as flood control and navigation for the major rivers of this 
country. Millions of acres which were overflow lands decades ago are 
now highly productive and contributing to our national wealth. These 
lands by reason of their geographic location are the most fertile of 
the nation. They produce an abundance of food and fiber for the general 
welfare and prosperity of the country. The inland waterways of the 
nation provide the cheapest and in some cases the only method to move 
bulk commodities that are also absolutely essential to the general 
welfare and prosperity of the country. Moneys appropriated by Congress 
for flood control and navigation has and will augment our natural 
resources and improve our economic well-being. The appropriations made 
by Congress for the Mississippi River and Tributaries project are 
investments in this nation's future.
    The Mississippi River and Tributaries project more than paid for 
itself in reduced monetary losses in only one flood, but this is not 
the complete story. The real benefit of this project are the reduction 
in human suffering, the improved health and the well being of the 
citizens. All of the approved methods known to us for making economic 
and environmental project analysis fall far short of fully evaluating 
these human needs. Since the productivity of the millions of acres of 
low lying lands adjacent to the main stem of the Lower Mississippi 
River are totally dependent upon the integrity of the flood control 
works, any major slow down in the completion of this project will 
represent economic strangulation to this productive portion of our 
nation. We are aware of the ever increasing demand on the federal 
dollar and the many complex problems that the Congress is confronted 
with, but we believe that this project is economically sound, 
environmentally necessary, and we urge its completion with all 
deliberate haste.
    In addition to our problems with the inadequate funding in the 
President's Budget request, we also have a tremendous problem with the 
purposed policy change contained in the fiscal year 1998 Budget.
    For the third time in recent years, the last significant effort was 
made during the Carter Administration, the Executive Department has 
proposed in the Budget Request that full funding of Corps of Engineers 
Construction projects be provided when the project is initiated. This 
policy, if approved by the Congress, would be a major change in funding 
of water resources projects. This policy would eliminate many projects 
for funding and extend the schedule for many projects which are funded. 
If adopted by the Congress it would preobligate the Appropriation of 
funds for a few projects over the next 5 years and would not allow for 
funding of large projects and would force priorities on smaller 
projects.
    The greatest damage from this policy change would be to take the 
Congress out of its historical role of legislating policy for the flood 
control and navigation programs that have played a large part in making 
the United States the greatest Industrial and Commercial nation on the 
globe--with its resources, its wealth and productive capability that 
has saved the world in war and sustained it through many years of 
troubled peace.
    The Executive Department is again attempting to supplant this 
historic Congressional role and assume these police making functions. 
In past attempts to convert civil works programs to full funding, the 
Congress in its wisdom has soundly rejected these attempts. We would 
urge this Congress to do the same, the alternative will be that policy 
for water resources development will rest with civil servants desk-
bound in Washington, ignorant of our needs and unaccountable to our 
people.
    In closing let me reemphasize that federal works projects with 
proven merit such as the Mississippi River and Tributaries Project 
represent a sound federal investment which will return to the taxpayers 
of this country generous dividends. Such federal investments contribute 
to the economic well being of the Nation by reducing unemployment; 
adding to the stability and economic growth of agriculture and 
industry; and providing a flood free environment for the welfare of the 
people of the Mississippi Valley.
    We reaffirm the position we have always held that the physical 
geography of the Mississippi River is such that flood control interests 
do not stop at the main river but extend upstream along the adjacent 
tributary streams and valleys. The Flood Control plan on the Lower 
Mississippi River therefore cannot be considered adequate or complete 
until the flood control plans for these valleys, authorized as a part 
of the Mississippi River and Tributaries project, are completed.
    Under our Constitutional form of Government the Citizens as the 
final authority and for whose protection and welfare our Government 
exists, are entitled to the best protection from Floods our Nation is 
capable of devising. We would respectfully request that this committee 
consider that during its deliberations of the Corps of Engineer's 
fiscal year 1998 Appropriations.
                                 ______
                                 
Prepared Statement of Billy J. Felty, Chief Engineer, St. Francis Levee 
                           District, Arkansas
    Mr. Chairman and Members of the Committee: My name is Bill Felty. I 
am Chief Engineer of the St. Francis Levee District of Arkansas. I live 
in West Memphis, Arkansas which is located at the West side of the 
Mississippi River in the St. Francis Basin. I am filing this statement 
in behalf of the Levee and Drainage Districts in the entire St. Francis 
Basin, Arkansas and Missouri, which depend upon the major drainage 
channels included in the St. Francis Basin Project for outlets to the 
complex drainage system in the Basin.
    Throughout the entire Lower Mississippi Valley we are witnessing a 
great industrial expansion and the economy of the area is improving 
rapidly each year. Agriculture a few years ago was the sole basis for 
the economy along the Mississippi River and within the Basin, is now 
sharing its importance with industry. This growth and prosperity could 
not exist without drainage and flood protection. The first 
authorization for work in the St. Francis Basin Project was in 1936. 
Local interests in Missouri and Arkansas have been working on a 
drainage system along the Mississippi River beginning in 1893 and have 
cooperated fully with each other in seeking funds and attempting to 
expedite the work which is so important to the entire Basin. The Basin 
Projects provide essential flood control and drainage improvements in 
an 8,400 square mile area. The only outlets for the drainage from the 
Missouri part of the Basin are through Arkansas and the complex system 
of levees and channels are of great economic importance to both states. 
There are a large number of individuals present at this hearing to show 
their support for the Project.
    The Civil Works Budget for fiscal year 1998 for Mississippi River 
and Tributaries appropriation includes the sum of $5,000,000 for the 
St. Francis Basin, Missouri and Arkansas. We believe the budgeted 
amounts are sufficient to provide continued progress toward completion 
of the St. Francis Basin Project. We also support the appropriations of 
the budgeted amounts for the other items in the Mississippi River and 
Tributaries Project, a total of $350,000,000. We feel our needs will be 
given fair consideration by this Committee and we appreciate the work 
you do to advance the development of the water resource projects.
                                 ______
                                 
     Prepared Statement of Aubrey J. LaPlace, President, Board of 
              Commissioners, Pontchartrain Levee District
        mississippi river and tributaries flood control project
    Fiscal year 1998 recommendations.--These two items are of 
indispensable importance to the State of Louisiana. There are serious 
project deficiencies in the Pontchartrain Levee District. Federal 
appropriations must continue at adequate levels to move forward.
$29,411,000 for Mississippi River levees
    In the Pontchartrain Levee District several reaches of main line 
levee must be enlarged and slope paved to advance from the current 
status of partial flood protection. Priority is recommended for two 
particular reaches, that is, Marchand to Darrow and Remy to Garyville. 
Both the items, and others, have been delayed from construction due to 
lack of funding.
    Future levee enlargements and slope paving are required in five of 
six parishes of the Levee District. The Board of Commissioners 
Pontchartrain Levee District urges the Subcommittees to appropriate at 
least $29,411,000 in fiscal year 1998 for Mississippi River levees.
$46,790,000 for channel improvement
    Main line levees must be protected from caving banks throughout 
this lower river reach where extremely narrow battures are the last 
line of defense against levee crevasses and failures. If caving banks 
are not controlled the only answer is ``setback''. Simply stated there 
is no room remaining for levee setbacks in the Pontchartrain Levee 
District. Revetment construction must be annually funded to prevent 
levee failures, land losses and unending relocations. This item also 
benefits the 55-foot deep navigation channel. The Pontchartrain Levee 
District recommends at least $46,790,000 be appropriated for fiscal 
year 1998 which concurs with the President's budget.
$343,867,000 for overall MR&T project
                           the levee district
    The Pontchartrain Levee District extends downstream from the City 
of Baton Rouge to the New Orleans area, a distance of 115 river miles, 
includes the east (left descending) bank of the Mississippi River, and 
is comprised of portions of East Baton Rouge, Iberville, Ascension, St. 
James, St. John the Baptist and St. Charles Parishes. The Mississippi 
River east bank levee is continuous throughout the Levee District, 
including the Bonnet Carre Floodway. We serve as the local sponsor for 
the St. Charles Parish Hurricane Protection Levee, now in the fifth 
year of construction, designed to protect the Parish, a portion of New 
Orleans and its International Airport from hurricane tides.
    Extensive development of major industries has taken place in the 
Pontchartrain Levee District and is continuing. Along with industrial 
growth, our Levee District is experiencing dramatic increase in 
residential and urban expansions. Substantial portions of the Levee 
District area are used for agriculture. Three nationally ranked deep-
water ports are companions to the Pontchartrain Levee District--the 
Baton Rouge Port, South Louisiana Port, and New Orleans Port. The New 
Orleans International Airport is also located within the district.
    The District contains numerous pipeline systems which deliver goods 
to nationwide distribution points. Interstate Highways 10 and 55 and a 
number of major U.S. Highways traverse the Levee District, along with 
major railroads. The Mississippi River 55-foot deep ship channel is the 
western Levee District boundary. Four bridges cross the River in our 
District.
    All these features and many other improvements along with more than 
one million residents are protected by the Mississippi River and 
Tributaries Flood Control Project in this Levee District. Only through 
continuous, effective flood control improvements and maintenance can 
this area and the Lower River Valley meet requirements to serve 
national needs for our economy and continued growth.
                                comments
    The Pontchartrain Levee District has full realization of the 
necessity of keeping this Subcommittee advised of current and future 
needs for federal monetary support on vital items of the MR&T Flood 
Control Project. In 1995 and 1996 the Senate Subcommittee refused to 
give audience to the Lower Mississippi Valley Flood Control Association 
seven state delegation. This year we have been advised that oral 
testimony will be heard from governmental agencies only. This is a 
great travesty of justice.
    The House Subcommittee has likewise, for the first time, announced 
no oral testimony from our group. What a tragedy. Such actions 
seriously erode the partnership that has been built between the Corps 
of Engineers and local sponsors. We trust that this pattern will revert 
back to the sixty-three year practice of hearing our delegation. Three 
representatives from the Pontchartrain Levee District are present today 
desiring to present views to the Subcommittees--they are Commissioner 
Joseph Gautreau, Vice President; Mike Babin, Project Manager; and 
Gerald Dyson, Executive Assistant.
              near future is uncertain--its up to congress
    In the search for new ways to accomplish required flood control and 
other water resources projects, Congress must remain mindful not to 
jerk the rug out from under its own feet and our own. Without 
protection there will be few jobs, farms, industries, businesses, 
voters and related activities. Congress should know that we in the 
Lower Mississippi Valley do not have the option to say ``No''. Also it 
stands that Congress should not have the option to reduce, remove or 
stop federal responsibility for controlling national water, whether in 
flood or drought. With respect to Louisiana most of its runoff is 
generated outside the State area for all its main carrier rivers, 
including Mississippi, Red, Ouachita, Black, Atchafalaya Floodway, 
Pearl and Sabine Rivers. In Louisiana we have a comprehensive flood 
control plan sponsored, operated and maintained by some 23 Levee 
Districts to handle and provide for safe passage of almost one half the 
nation's waters. This invokes federal involvement, don't mess up the 
system.
                               conclusion
    The Board of Commissioners, Pontchartrain Levee District, 
compliments the Subcommittee on Energy and Water Development for its 
keen understanding of real needs for the MR&T Flood Control Project and 
efficient, alert actions taken to appropriate funds for its many 
complex requirements. We endorse recommendations presented by the 
Association of Levee Boards of Louisiana, Louisiana Department of 
Transportation and Development, Lower Mississippi Valley Flood Control 
Association and Red River Valley Association.
                                 ______
                                 
     Prepared Statement of Aubrey J. LaPlace, President, Board of 
              Commissioners, Pontchartrain Levee District
                     st. charles parish, louisiana
    The project.--``Lake Pontchartrain and Vicinity Hurricane 
Protection, St. Charles Parish, Louisiana,'' authorized by the Flood 
Control Act of 1965. Construction is now limited to St. Charles Parish, 
and virtually complete in four other Parishes.
    Objective.--An Accelerated Plan has been developed in conjunction 
with the Corps of Engineers whereby the ten mile levee system first 
lift and drainage structures can be completed in a five year period, 
providing protection from hurricane tides to elevation 9.0. Additional 
levee lifts will be added to elevation 13.5 as consolidation will 
allow.
    Funding requirements for accelerated plan.--Local--Now available at 
rate of $2,400,000 annually, Federal--$6,000,000 annually for five year 
period.
    Recommended for fiscal year 1998.--$6,000,000 federal 
appropriation.
                          project description
    The St. Charles Parish Hurricane Protection Levee is ten miles in 
length, has six drainage structures, extends from the Bonnet Carre 
Floodway to New Orleans International Airport and is situated about 
four hundred feet north of U.S. Hwy. 61. Construction cost is estimated 
at $99,000,000 to be financed at 70 percent Federal and 30 percent 
Local (Pontchartrain Levee District). Project is now 20 percent 
complete.
                   the accelerated construction plan
    The Accelerated Construction Plan was developed in cooperation with 
the New Orleans District, Corps of Engineers and provides completion of 
the levee first lift with drainage structures in five years. The pace 
for construction phases is based on physical constraints which allow 
minimal times for required consolidation, work cannot proceed any 
faster. When the first lift and structures are completed, immediate 
protection to elevation 9.0 will be in place, and now there is nothing 
to prevent extensive, devastating flooding in St. Charles Parish, a 
portion of Jefferson Parish and New Orleans International Airport. Then 
additional lifts will be added to raise the levee to elevation 13.5 as 
consolidation will allow.
                      funding the accelerated plan
    The Full Funding Initiative perfectly fits the Accelerated Plan. 
This concept of full up-front funding definitely fits this Project, 
this Accelerated Plan. The Pontchartrain Levee District in the role as 
local sponsor has the required funds and is anxious to proceed. The St. 
Charles Parish Council is completely supportive and provides a portion 
of local funding. Federal funding in the amount of $6,000,000 and local 
funding of $2,400,000 annually for five years is required beginning in 
fiscal year 1998. This Project--the Accelerated Plan--can well serve as 
a demonstration event for the Full Funding Initiative. This opportunity 
should not be missed. We have an emergency project, we have local 
funds, the next move is in the hands of the Appropriations Subcommittee 
on Energy and Water Development. You must act now.
    Representatives of the Pontchartrain Levee District appeared at the 
Subcommittee Staff Office to submit this Statement and answer any 
questions. They are Commissioner Joseph Gautreau, Project Manager Mike 
Babin and Executive Assistant Gerald Dyson. You may call either of them 
or the undersigned at any time for information, (504) 869-9721.
                                 ______
                                 
Prepared Statement of Gov. Murphy J. ``Mike'' Foster, on Behalf of the 
 Louisiana Department of Transportation and Development, Public Works 
                     and Flood Control Directorate
               mississippi river and tributaries project
    The Louisiana Department of Transportation and Development, Public 
Works and Flood Control Directorate, is the agency designated to 
represent the State of Louisiana in the planning and orderly 
development of its water resources. This statement is presented on 
behalf of the State of Louisiana and contains recommendations for 
fiscal year 1998 appropriations for work in Louisiana under the 
Mississippi River and Tributaries Project.
    Louisiana contains the terminus of the Mississippi River, which has 
the third largest drainage basin in the world, exceeded only by the 
watersheds of the Amazon and Congo Rivers. The Mississippi River drains 
41 percent, or 1\1/4\ million square miles, of the contiguous United 
States and parts of two Canadian provinces. All of the runoff from 
major river basins, such as the Missouri and Upper Mississippi, the 
Ohio including the Tennessee and others, and the Arkansas and White, 
flow into the Lower Mississippi, which empties into the Gulf of Mexico 
through Louisiana.
    The jurisdiction of levee boards in Louisiana includes one-third of 
the State's total area. However, the importance of this one-third of 
the State can be seen by the fact that it contains nearly 75 percent of 
the State's population and about 97 percent of the State's disposable 
personal income. Traditionally, the levee district areas are water rich 
and have fallen heir to industrial development that ranks high in the 
nation. It has been estimated that about 60 percent of the State's 
agricultural products come from levee district areas. So you can see 
why Louisiana and its twenty levee districts are so interested in 
seeing the completion of the Mississippi River and Tributaries Project.
    In making the following recommendations regarding construction, 
studies, and some selected operation maintenance items, the State of 
Louisiana understands the Administration's need to reduce the Federal 
deficit, but would hope that Congress and the Administration will honor 
their prior commitments to infrastructure development and fund our 
requests.

 MISSISSIPPI RIVER AND TRIBUTARIES SUMMARY OF RECOMMENDED APPROPRIATIONS
                              [In dollars]                              
------------------------------------------------------------------------
                                                             Louisiana  
           Louisiana projects             Budget request      request   
------------------------------------------------------------------------
Construction:                                                           
    Atchafalaya Basin...................      19,100,000      19,100,000
    Atchafalaya Basin, Floodway System..       3,300,000       3,300,000
    Channel Improvements (LA only)......      14,708,000      18,708,000
    Mississippi Delta Region, Davis Pond      11,500,000      11,500,000
    Mississippi and Louisiana Estuarine                                 
     Area...............................         300,000         300,000
    Mississippi River Levees (LA only)..      12,670,000      14,670,000
    Tensas Basin, Red River Backwater                                   
     Area...............................       7,006,000      11,006,000
General Investigations: Morganza to the                                 
 Gulf...................................       1,070,000       1,070,000
Preconstruction, Engineering and Design:                                
 Louisiana State Penitentiary Levee.....         600,000         600,000
Operation and Maintenance:                                              
    Atchafalaya Basin...................      10,700,000      10,700,000
    Atchafalaya Basin, Floodway System,                                 
     LA.................................         670,000         670,000
    Baton Rouge Harbor--Devil Swamp, LA.         150,000         150,000
    Bayou Cocodrie and Tributaries......          92,000          92,000
    Bonnet Carre Spillway...............       1,000,000       1,000,000
    Channel Improvement (total MR&T)....      56,112,000      56,112,000
    Lower Red River--South Bank Levees,                                 
     Bayou Rapides Drainage Structure                                   
     and Pumping Plant..................         378,000         478,000
    Mississippi Delta Region,                                           
     Caernarvon, LA.....................         377,000         377,000
    Mississippi River Levees (total                                     
     MR&T)..............................       7,252,000       7,252,000
    Old River Control Structure.........       4,390,000       4,390,000
    Tensas Basin:                                                       
        Boeuf and Tensas Rivers, AR, LA.       2,807,000       2,807,000
        Red River Backwater Area........       2,891,000      2,891,000 
------------------------------------------------------------------------
Note: The projects listed above are only those in Louisiana and directly
  affecting the State. We realize that there are others in these areas, 
  we endorse the recommendations of the Lower Mississippi Valley Flood  
  Control Association.                                                  

Atchafalaya basin--Request: $19,100,000
    This project is a main stem component of the flood control plan for 
the Mississippi River and Tributaries Project. The Mississippi River 
can safely carry only one-half of the project flood, or 1,500,000 cubic 
feet per second, below Old River; the other 1,500,000 cubic feet per 
second must be discharged through the Atchafalaya Basin. The levees 
which must confine this flow to the basin are now deficient because 
they have settled below original design grade due to consolidation of 
the underlying soils, and the design has been revised upward. This 
places the lives and welfare of approximately 650,000 people and their 
property and improvements in 13 parishes in the immediate vicinity of 
the Atchafalaya Floodway in jeopardy each flood year. The tax 
assessment records indicate the value of potential flood losses to be 
approximately $8 billion, not including public improvements. Over the 
past half century, we have supported the Mississippi River and 
Tributaries Project and have agreed that construction of flood 
protection works should start upstream and progress downstream. As a 
result, the Mississippi River and Tributaries Project is now more than 
90 percent complete in sites upstream from Louisiana, while the levees 
in the Atchafalaya Basin can contain approximately only 90 percent of 
the project flood. Work on this project has been underway since 1928 
and isn't scheduled for completion until the year 2010. We urge your 
support for funding this effort to the full capability of the Corps.
Channel improvement--Request: $18,708,000
    Channel improvements and stabilization provide protection of the 
levees and the development behind them, as well as preventing 
unsatisfactory alignment where the river's bank is unstable. We are 
requesting an additional $4,000,000 ($2 million each for the Vicksburg 
and New Orleans districts) for fiscal year 1998 to keep the program 
moving forward. The funds we are requesting will provide for the 
dredging and revetment work necessary to accommodate increased flows 
caused by upstream improvements.
Mississippi River levees--Request: $14,670,000
    The Mississippi River and Tributaries Project above Louisiana is 
about 90 percent complete, but in Louisiana to a much lesser extent. 
Because of the improvements upstream, increased flows are a major 
problem in Louisiana where the project is lagging behind the 
construction in the upper valley. We request funds for levee 
enlargement work within the Fifth Louisiana Levee District where there 
is a deficiency of 4 to 7 feet on main-line Mississippi River levee. It 
is also requested that Federal funds be provided to purchase rights-of-
way for this critical work as the Levee District is in an economically 
depressed area and does not have a tax base capable of producing the 
funds necessary for both maintenance and rights-of-way.
Louisiana State Penitentiary levee--Request: $600,000
    The Louisiana State Penitentiary Levee is the only section of 
Mississippi River levee in Louisiana that is not currently constructed 
to Federal standards. It was authorized under the Mississippi River and 
Tributaries Project in 1986 and re-authorized in 1990. We urge your 
support in funding this project and request that specific language be 
included in the appropriations bill to direct the Secretary of the Army 
to construct this project before an emergency situation arises during a 
major river flood.
Morganza, LA to the Gulf of Mexico--Request: $1,070,000
    This study area of approximately 4,000 square miles lies in the 
corridor between the Mississippi and the East Atchafalaya Basin Levees 
and is part of the alluvial floodplain of the Mississippi River. These 
levees intercepted the drainage which now must flow approximately 125 
miles to the Gulf of Mexico. The area is affected by backwater flooding 
from the Atchafalaya Basin and is also affected by tides. This is a 
very important project to the State and we urge your continued support 
for funding.
Mississippi delta region project, Davis Pond--Request: $11,500,000
    Davis Pond Freshwater Diversion Project is necessary to aid in the 
fight against coastal erosion and land loss. The State of Louisiana's 
commitment to this project is demonstrated by our agreement to provide 
25 percent of the cost of construction, operation and maintenance of 
the Davis Pond structure despite Congressional project authorization at 
100 percent Federal cost.
Bayou rapides drainage structure and pumping plant (Lower Red River, 
        South Bank Levees)--Request: $478,000
    The Bayou Rapides Drainage Structure and Pumping Plant is 
authorized under the Lower Red River, South Bank Levees of the 
Mississippi River and Tributaries Project. An additional $100,000 is 
requested to begin plans and specifications. This will enable the Corps 
to begin construction in fiscal year 1999 and keep within the 18 months 
allowed for major maintenance projects. We urge your support for 
funding and request that specific language be included in the 
appropriations bill to direct the Secretary of the Army to construct 
this project.
           local contributions for flood control improvements
    Historically, Louisiana has always done its part in cooperation 
with the Federal agencies concerned with flood control. The Louisiana 
State Board of Engineers, the forerunner of the Department of 
Transportation and Development, Public Works and Flood Control 
Directorate, was created in 1879, the same year as the Mississippi 
River Commission, to coordinate the planning and construction of the 
required flood control facilities to protect the State. Since that 
time, local expenditures for flood control have exceeded $730,000,000. 
This amount adjusted to 1979 dollars represents expenditures in excess 
of $5.3 billion. Nearly one-half of the potential flooded area of the 
Lower Mississippi River Valley lies in Louisiana. Local expenditures 
for flood control have increased with the growth of the valley. This 
record not only meets, but exceeds any National Water Policy local 
participation requirement ever put into practice.
                               conclusion
    The State of Louisiana, Department of Transportation and 
Development, Public Works and Flood Control Directorate, in particular, 
wishes to commend the Appropriations Subcommittees on Energy and Water 
Development, and express our appreciation for the foresight and 
understanding exhibited for water resources projects which are vital to 
the national interest. We solicit your further consideration of the 
recommendations presented herein.
                                 ______
                                 
Prepared Statement of Gov. Murphy J. ``Mike'' Foster, on Behalf of the 
 Louisiana Department of Transportation and Development, Public Works 
                     and Flood Control Directorate
  flood control, navigation, hurricane protection and water resources 
                         projects in louisiana
    The Louisiana Department of Transportation and Development, Public 
Works and Flood Control Directorate, is the agency designated to 
represent the State of Louisiana for the coordinated planning and 
development of water resources, including flood control, navigation, 
drainage, water conservation and irrigation projects; therefore, this 
statement is presented on behalf of the State of Louisiana. We are 
pleased to present the recommendations for fiscal year 1998 
appropriations for Louisiana projects. The projects listed herein are 
in addition to those covered in the statement by the Public Works and 
Flood Control Directorate for the Mississippi River and Tributaries 
Project.
    Louisiana contains the terminus of the Mississippi River, which has 
the third largest drainage basin in the world, exceeded only by the 
watersheds of the Amazon and the Congo Rivers. The Mississippi drains 
41 percent, or 1\1/4\ million square miles, of the contiguous United 
States and parts of two Canadian provinces. In addition to the 
Mississippi River system, Louisiana contends with other interstate 
waters--the Sabine on the western border, the Red River from four other 
states, the Ouachita River in the north central area flowing down from 
Arkansas, the Arnite River in the southeast area flowing down from 
Mississippi, and the Pearl River on its extreme eastern border with the 
State of Mississippi. All of these river systems converge towards 
Louisiana, passing on to the Gulf of Mexico, draining a figure 
approaching 50 percent of these contiguous 48 states.
    Louisiana also plays a strategic part in providing the country with 
access to world markets through an inland navigation system that 
funnels through Louisiana. Approximately 75 percent of all soybeans, 
animal feed, and corn grown in the U.S. are shipped through Louisiana. 
And almost 50 percent of all rice and cereals. Louisiana has the 
highest waterborne traffic by state. The river flood control systems 
work in conjunction with the hurricane and coastal protection systems 
to form a total integrated protection system from floods of all types. 
This integrated system protects the inland navigation system that as 
Senator Bond has said ``is the envy of the world.'' It also protects 
the petrochemical industry in Louisiana which has the second largest 
refining capacity in the country producing approximately 15 billion 
gallons of gasoline at 19 refineries. Louisiana ranks second in 
produced natural gas and third for oil production. The pipeline system 
which supplies much of the country with natural gas and petroleum 
originates in Louisiana. The petrochemical and oil and gas industries 
depend almost totally on Federally constructed levee systems to protect 
them from floods and hurricanes, and depend on the Federally maintained 
navigation system for transportation. This infrastructure development 
which benefits the entire country has contributed to the destruction of 
our marshes and wetlands which produce a commercial fish and shellfish 
harvest worth over $600 million and 40 percent of the Nation's wild fur 
and hides harvest worth over $15 million. This wealth of natural 
resources cannot survive and propagate for the economic benefit of the 
State and Nation without on-shore facilities that require protection 
from major storms and hurricanes. It would be a national loss if these 
facilities and infrastructure were not protected since Louisiana plays 
a strategic part in the national economy. But Louisiana alone cannot 
support the infrastructure on which the country depends. All these 
facilities in Louisiana that support and contribute to the economic 
well-being of the country are protected by flood control measures; 
flood control measures that the Federal Government has appropriately 
committed itself to provide.
    In making the following recommendations regarding construction, 
studies, and some selected operation and maintenance items, the State 
of Louisiana understands the Administration's need to reduce the 
Federal deficit, but would hope that Congress and the Administration 
will honor their prior commitments to infrastructure development and 
fund our requests. We feel that water resources projects are probably 
the most worthwhile and cost effective projects in the Federal budget, 
having to meet stringent economic justification criteria not required 
of other programs. We ask that this be taken into consideration in the 
final decision making process to appropriate the available funds.

                              [In dollars]                              
------------------------------------------------------------------------
                                                             Louisiana  
                 Project                  Budget request      request   
------------------------------------------------------------------------
Authorized Studies:                                                     
    Amite River--Darlington Reservoir,                                  
     LA.................................         300,000         300,000
    Bayou Tigre, LA.....................         350,000  ..............
    Black Bayou Diversion, LA...........         350,000         350,000
    Intracoastal Waterway Locks, LA.....         850,000         850,000
    Jefferson Parish, LA................         138,000         138,000
    Lafayette Parish, LA................         600,000         600,000
    Mississippi River Ship Channel                                      
     Improvements, LA...................         400,000         400,000
    Orleans Parish, LA..................         350,000         350,000
    West Shore--Lake Pontchartrain, LA..         250,000         250,000
Preconstruction Engineering and Design:                                 
    Comite River Diversion, LA..........         265,000         265,000
    East Baton Rouge Parish, LA.........         620,000         620,000
    Port Fourchon, LA...................         129,000         129,000
Construction:                                                           
    Aloha-Rigolette Area, Red River, LA.       1,510,000       3,343,000
    Lake Pontchartrain and Vicinity,                                    
     Hurricane Protection...............       6,448,000      11,248,000
    Lake Pontchartrain Stormwater                                       
     Discharge..........................  ..............       7,400,000
    Larose to Golden Meadow, Hurricane                                  
     Protection.........................         541,000       3,041,000
    Mississippi River, Gulf Outlet......       2,018,000       3,518,000
    Mississippi River Ship Channel, LA..       1,793,000       2,993,000
    New Orleans to Venice, Hurricane                                    
     Protection.........................       1,700,000       2,200,000
    Ouachita River Levees...............  ..............       5,741,000
    Red River Chloride Control..........  ..............      12,000,000
    Red River Waterway, LA..............       9,990,000      18,990,000
    Southeast Louisiana Urban Flood                                     
     Control............................       6,440,000      52,000,000
    West Bank--East of Harvey Canal, LA.       2,385,000       2,385,000
    Westwego to Harvey Canal, LA,                                       
     Hurricane Protection...............       4,300,000       6,300,000
------------------------------------------------------------------------

Operation and maintenance--Request: Full Capability
    Operation and maintenance of completed projects is essential to 
achieving the full benefits of the projects. In times of budget 
constraints it is essential that operation and maintenance not be put 
off which would hamper the effectiveness of the projects and cause more 
expensive maintenance at a later date. We urge you to continue funding 
operation and maintenance to the Corps' full capability. The 
Mississippi River, Baton Rouge to the Gulf Project and the Mississippi 
River Gulf Outlet are major navigation arteries in Louisiana providing 
access to world markets through Louisiana. Maintenance of these vital 
arteries is imperative. Currently, there are not enough funds to 
maintain them, causing major problems for the maritime industry. This 
will impact the nation's economy. We recommend that the Corps be funded 
to its full capability in fiscal year 1998 to keep our economy strong.
Ouachita River levees--Request: $5,741,000
    The culvert replacement in the Ouachita River Levees is complete. 
We thank you for your assistance in funding this desperately needed 
work. What remains is to bring the levees up to standards. We request 
that specific language be added to the appropriations bill to direct 
the Secretary of the Army to accomplish this task. These funds would 
allow for the design and completion of construction for levee 
enlargement and surfacing the crown. We request that $5,741,000 be 
provided in fiscal year 1998 for this work which would complete the 
project.
Mississippi River ship channel. Gulf to Baton Rouge, LA--Request: 
        $2,993,000
    The Mississippi River Ship Channel is now capable of providing a 45 
foot deep channel all the way to Baton Rouge, Louisiana. The Phase I 
mitigation construction is underway and we request an appropriation to 
keep it on schedule, and to continue the design memorandum for the 
remaining Phase III features. We thank you for your continued support 
for infrastructure development which keeps our country competitive in 
the world market.
Lafayette parish, LA--Request: $600,000
    Flooding from the Vermilion River in Lafayette Parish in 1993, and 
since, has caused damages to areas that had never flooded before. The 
funds requested are to continue the feasibility study.
Westwego to Harvey canal, LA--Request: $6,300,000
    Hurricane protection for the West Bank of the New Orleans 
metropolitan area is urgently needed. We urge the Corps to increase its 
capability for an accelerated construction schedule for this project. 
We request a Congressional add of $1,000,000 for a new construction 
start on the Lake Cataouatche Levee which was recently included into 
the overall project. This would extend hurricane protection west to the 
St. Charles Parish line. We urge your support for this addition.
West bank--East of Harvey canal, LA--Request: $2,385,000
    The East of Harvey Hurricane Protection Project will modify the 
Westwego to Harvey Canal Project now under construction and provide 
greater net benefits realized than from the Westwego to Harvey Canal 
Project alone. This project will protect over 80 percent of residential 
structures in the area, which is a potential flood damage reduction of 
over $2.2 million, and has a benefit to cost ratio of 4 to 1. We urge 
your support for this project and its early authorization.
Aloha-Rigolette area, Red River, LA--Request: $3,343,000
    Construction of this project has begun, but at a reduced 
construction schedule due to budget cuts. To put this project back on 
schedule we request an additional $1,833,000 to the Administration's 
request of $1,510,000 for a total of $3,343,000 to complete the 
project. We urge your support.
Red River waterway--Mississippi River to Shreveport, LA--Request: 
        $18,990,000
    Navigation is now possible to Shreveport, however, the project 
still has many additional items to complete. The accelerated 
construction schedule mandated by your funding recommendations in 
previous years has saved taxpayers of the United States millions of 
dollars on the construction of the Red River Waterway Project. We urge 
the continuation of this policy by providing an additional $9 million 
for fiscal year 1998 based on the previously approved schedule.
Southeast Louisiana urban flood control--Request: $52,000,000
    In 1996 Congress authorized all economically justified work 
described in previously completed reports by the New Orleans District 
Corps of Engineers. A five year construction schedule was approved. To 
maintain this five year schedule an additional $45,560,000 is required 
and requested.
Lake Pontchartrain and vicinity, hurricane protection--Request: 
        $11,248,000
    The additional funds of $4,800,000 are requested for work in St. 
Charles Parish. The local sponsor has requested that this portion of 
the project be expedited and has the necessary funds to cost share.
Red River basin chloride control project--Request: $12,000,000
    With the Red River Waterway Project bringing navigation to 
Shreveport, the water supply needs of the area will increase. Reducing 
the chloride content of the Red River, which is technically and 
economically feasible, would make the Red River usable as an economical 
water supply. The construction of the Red River Chloride Control 
Project will enhance further economic development in the Red River 
Valley and make the Navigation Project prove even more economically 
feasible than previously anticipated. We ask that funds continue to be 
provided in future years until this project is completed.
       coastal wetlands planning, protection and restoration act
    The passage of the Coastal Wetlands Planning, Protection and 
Restoration Act has been a positive force for Louisiana. This 
legislation is not only assisting the Nation and Louisiana in 
protecting and restoring precious wetlands of national significance but 
it has also freed up Corps' funds for other much needed flood control 
and navigation projects. The State of Louisiana commends the Corps on 
its cooperation in coordinating the beneficial use of dredged material 
for coastal preservation.
                               conclusion
    We wish to express our thanks to the Appropriations Subcommittees 
on Energy and Water Development of the House and Senate for allowing us 
to present this brief on the needs of Louisiana. Without reservation, 
practically every single project in Louisiana which has been made 
possible through actions of these committees has shown a return in 
benefits many times in excess of that contemplated by the authorizing 
legislation. The projects which you fund affect the economy of not only 
Louisiana, but the nation as a whole. The State of Louisiana 
appreciates the accomplishments of the past and solicits your 
consideration of the appropriations requested for fiscal year 1998.
                                 ______
                                 
     Prepared Statement of Reynold S. Minsky, President, Board of 
             Commissioners, Fifth Louisiana Levee District
    A situation in the State of Louisiana which has the potential to 
cost lives and virtually billions of dollars in damage to private and 
commercial property. To prevent this from happening, it is essential 
that the U.S. Army Corp of Engineers, Vicksburg District be allocated 
funding for proposed levee construction projects on the mainline 
Mississippi River Levee in north Louisiana.
    U.S. Army Corps of Engineers' projects designated State Line-Wilson 
Point. LA. Item 503-R and Wilson Point-Point Lookout LA, Items 480-489-
R, designed to upgrade levee heights in the most deficient areas, will 
require approximately $32 million for construction. Another $68 million 
will be required to bring the remainder of the mainline Mississippi 
River Levee in the Fifth Louisiana Levee District to grade.
    A stretch of the mainline Mississippi River Levee in East Carroll 
Parish, Louisiana, has been determined to be an average of six feet 
deficient in height. In reality, some sections of this area are as much 
as seven to nine feet deficient, making it the lowest stretch of 
mainline Mississippi River Levee in Arkansas or Louisiana, with only 
one location comparable in Mississippi.
    Of this 26-mile stretch, the area of greatest deficiency is located 
directly north of Lake Providence, Louisiana. Should the Mississippi 
River overtop the Levee at this location, it will destroy the town of 
Lake Providence, where flood waters would be seven to ten feet in depth 
within six hours. Tallulah, Newellton and St. Joseph, Louisiana would 
be destroyed within days. Approximately one-half of the State of 
Louisiana will flood as waters push into the Atchafalaya and Ouachita 
rivers. According to information compiled by the Vicksburg District, 
Corp of Engineers and featured in a Louisiana Public Television report 
entitled ``Chocolate Tide'', within seven days of a levee failure at 
Lake Providence, the airport at Monroe, Louisiana will be underwater.
    To eliminate the potential danger the Vicksburg District, Corp of 
Engineers proposed the levee construction projects entitled State Line-
Wilson Point LA, Items 501-506-R, and Wilson Point-Point Lookout LA, 
Items 480-489-R. One project currently under construction will require 
another (unfunded) $2.8 million to complete. Two projects are in the 
planning stage for 1997. The remaining proposed levee enlargement 
projects have virtually been halted by lack of funding and legal action 
designated Mississippi River Basin Alliance vs. Corps of Engineers, a 
lawsuit filed by the Sierra Club Legal Defense Fund. One construction 
item, ``State Line-Wilson Point'', Item 503-R, proposed for the 4.1 
mile stretch of levee that is most deficient in height, is addressed 
directly in the Sierra Club lawsuit and has been ``put on hold'' with 
no projected construction date.
    Demands being made by the Sierra Club suit are cost prohibitive and 
impossible financially to comply with. Without intervention or 
reasonable compromise regarding these demands, the litigation has the 
potential to prolong construction in this vulnerable area until it is 
too date.
    Additionally, budget cuts at the federal level have reduced funding 
for these proposed levee enlargement projects. By letter dated March 
19, 1996, Colonel Gary Wright, District Engineer, Vicksburg District, 
Corp of Engineers advised, `` * * * the District expects to award only 
one contract in the years 1998-2000, and completion date of the (MRC) 
project to be extended * * * to 2029.'' The Mississippi River Levee 
Project was allocated a total of only $33.3 million for the five year 
period 1997-2001.
    The proposed federal budget for fiscal year 1998 includes $266 
million to fund the Mississippi River and Tributaries Project, the 
flood control and navigation program on the Lower Mississippi River, 
and $247.3 million for construction, investigations, and operations and 
maintenance for other work that does not come under the MR&T program. 
One of the main features of President Clinton's proposed budget is to 
fully fund construction work and new starts beginning with the fiscal 
year 1998 budget; however, listings of locations for those projects 
under that provision of the budget do not show any in Mississippi, 
Louisiana, or Arkansas within the Vicksburg Corps of Engineers' 
District.
    Only weeks ago America watched flood waters overtop levees, roads, 
and reservoirs, and rage into homes and businesses in California and 
Washington, leaving death and destruction in the wake. One week ago we 
watched as flood waters raced through Ohio and Kentucky, again leaving 
a trail of death, livelihoods destroyed, and thousands displaced. We 
saw scenes that repeated those witnessed in the northwest in 1995, and 
in Missouri in 1993.
    Even as I speak today, the Mississippi River continues rising and 
is projected to reach record heights along the Levee in north 
Louisiana. All relevant factors taken into consideration, potentially, 
within the next 90 days the Mississippi River could reach levels 
unrecorded since 1927.
    We must also consider that the area of Louisiana targeted for 
greatest danger from a swollen Mississippi River has also been 
recognized nationally as having the lowest income per capita in 
America. Most homes and belongings in this area are not covered by 
insurance of any kind. Even with advance warning, many families would 
not have the means to remove themselves from harm's way.
    You have an obligation to do all you can to prevent further 
catastrophe from the Mississippi River, especially when the cost of 
prevention is so little, yet the potential for destruction so high.
    As members of the Board of Commissioners for the Fifth Louisiana 
Levee District, we represent and speak for the people of northeast 
Louisiana. We are not alarmist, we are realist. In reality a very real, 
and increasingly present, danger exists if this section of the 
Mississippi River Levee is not enlarged to proper height at the 
earliest possible date.
    On behalf of the Fifth Louisiana Levee Board and the people of 
Louisiana, I urge you to make funding and enlarging of the Mississippi 
River Levee in Louisiana a number one priority in future funding. If 
not too late already, we can prevent history from repeating itself. We 
can insure that America will not watch as half of the State of 
Louisiana is washed away. We can protect our people. It will just take 
all of us working together.
    We desperately need your support in this matter and respectfully 
request that construction projects proposed for the Mississippi River 
Levee in Louisiana, as planned for fiscal year 1998, be fully funded.
                                 ______
                                 

              NEW YORK/NEW JERSEY WATER RESOURCE PROJECTS

Prepared Statement of Ralph Cox, Maritime Director, Massachusetts Port 
                               Authority
    Mr. Chairman and members of the Subcommittee, I appreciate the 
opportunity to submit testimony for the Hearing Record for the fiscal 
year 1998 Energy and Water Appropriations Bill. My name is Ralph Cox. I 
am Director of the Maritime Division of the Massachusetts Port 
Authority (Massport). I would like to start out by thanking this 
Subcommittee for its support last year and for the $553,000 that was 
included in last year's Energy and Water Appropriations Bill. The 
purpose of my testimony this year is to request continued federal 
assistance for the Boston Harbor Navigation Improvement Project.
    The Port of Boston is one of the oldest international ports in the 
nation, having served U.S. commerce for over 300 years. The Port's 
primary activities are related to the transport of bulk cargo, 
particularly petroleum and scrap metal, and containerized freight. In 
1995, the Port handled over 1.1 million tons of containerized cargo, 
which represented 87 percent of our business. The Port of Boston is the 
largest port in New England and serves over 13 million residents of the 
six New England states.
    The Boston Harbor Navigation Improvement Project is designed to 
deepen three tributary channels of Boston Harbor to depths of 40, 40 
and 38 feet, respectively. Specifically, the plan calls for deepening 
the Reserved Channel and the Mystic River to 40 feet. This is necessary 
so that larger deep draft vessels, which are currently used in the 
international container business, can be fully accommodated. Currently, 
deep draft vessels may incur several hours of tidal delay in order to 
call on the Port. Without dredging the harbor, shipping lines will be 
forced to continue to wait for the high tide. This will ultimately 
result in a significant reduction of direct vessel calls on the Port. 
As is often the case, weather conditions cause delays in vessel transit 
across the Atlantic Ocean. These delays often result in vessels 
bypassing Boston altogether. This increases freight handling costs, 
which are then passed on to the citizens of New England in the form of 
higher prices for various products.
    In addition, the Chelsea Creek will be deepened to 38 feet so that 
nearby transfer facilities will be able to accommodate the deeper draft 
oil tankers which are used to carry petroleum to locations throughout 
New England. Today, heavily loaded oil tankers must also wait for the 
tidal change, or be ``lightered'' by off-loading petroleum onto barges. 
As you might suspect, this transfer process is highly inefficient and 
substantially more costly. While every precaution is taken to ensure 
safety, lightering does add considerably to the risk of an oil spill 
within Boston's inner harbor.
    To remedy the aforementioned problems, the Boston Harbor Navigation 
Improvement Project was conceived in 1968 and provided for by 
Congressional resolution. The necessity of deepening Boston's 
navigation channels received further support from Congress in the form 
of an authorization within the Water Resources Development Act of 1990. 
In its report, the House recognized that the timely completion of the 
project was critical to the maintenance and growth of the Port. By 
extension, increased efficiency at the Port will also contribute 
significant economic growth to the Commonwealth of Massachusetts and 
the entire New England region.
    The Boston Harbor navigation project has approached the final 
approval stage after many years of effort and time consuming 
environmental reviews. There has been close cooperation between 
environmental advocates, dredging proponents, and regulatory agencies. 
An innovative and environmentally sound solution to the disposal of 
contaminated dredge material has been achieved through anticipated use 
of in-harbor containment cells. Rather than being dumped at sea or 
placed in local landfills, contaminated sediments will be placed in 
deep cells below the existing navigation channels and capped with clean 
material. Clean sediments will be disposed of at sea or beneficially 
used onshore.
    Special precautions will be taken during both dredging and disposal 
to minimize the impact of the project on water quality and marine life. 
The project will employ a closed ``environmental bucket'' to remove the 
dredged material and will utilize various environmental protection 
measures during dredging and disposal, as appropriate. The project will 
also hire an independent contractor, in addition to the Corp's resident 
engineer, to monitor all dredging and disposal sites for their impact 
on migratory fish. Dredging work at Conley Terminal, representing the 
first phase of the project, will begin in May. Dredging for the rest of 
the project will begin in August or September.
    Mr. Chairman, we were pleased to learn that $3.92 million was 
included for Boston Harbor within President Clinton's fiscal year 1998 
budget submission. However, while we are sensitive to the budget 
constraints with which this Subcommittee is faced, Massport and the 
Army Corps of Engineers are prepared to complete this project in 
eighteen months. Therefore, we are requesting that this Subcommittee 
continue a history of strong congressional support for this project by 
providing $8.687 million in fiscal year 1998 funding. This level of 
funding will enable us to complete the majority of the dredging work 
during fiscal year 1998, and will also enable us to keep the project on 
schedule and budget.
    In addition, Massport is also requesting that the Subcommittee 
support the Corps' request for $16.5 million in operation and 
maintenance funding to begin the maintenance work in Boston Harbor. It 
is necessary for the maintenance and dredging work to be conducted 
simultaneously, and we would therefore urge your support for both the 
improvement and maintenance dredging requests.
    In closing Mr. Chairman, I would like to state that both Massport 
and the Commonwealth of Massachusetts are fully committed to this 
project. Specifically, the Commonwealth has committed $15 million 
through a Seaport Bond Bill and Massport has committed $5 million, $2 
million of which has already been spent on permitting and environmental 
studies.
    Mr. Chairman, thank you again for the opportunity to submit 
testimony for the Hearing Record. Massport is very grateful for this 
Subcommittee's past support for this project, and we are looking 
forward to continuing our work together.
                                 ______
                                 
     Prepared Statement of John P. Cahill, New York Department of 
                       Environmental Conservation
    I'd like to take this opportunity to share New York State's 
interests in Congressional appropriations under the Water Resources 
Development Act, in particular focusing here on meeting needs 
associated with the Port of New York and New Jersey.
    As you know, the Port of New York and New Jersey is important to 
the local and regional economy. In 1995, the Port handled 120 million 
tons of cargo, valued at $93 billion. It is responsible for 193,000 
jobs, 90,000 of which are located in New York or are filled by New York 
residents. New York State is the third largest exporter state in the 
country--$34 billion to 200 countries.
    According to the Port Authority of New York and New Jersey, 
significant amounts of container cargo are already being diverted to 
other ports on the east coast, such as Halifax and Norfolk, due largely 
to the fact that the Port channels in New York harbor are not deep 
enough to handle modern container vessels. In order to accommodate 
these vessels, the Army Corps of Engineers estimates that 60 million 
cubic yards of material must be removed from the harbor between now and 
the year 2001. It is estimated that 75 percent of that material to be 
dredged is contaminated, unsuitable for ocean disposal.
    The State of New York is working diligently to develop viable 
disposal options for both the short term and the long term. On October 
7, 1996, the States of New York and New Jersey released a ``Bi-State 
Dredging Plan'' which, among other things, committed a total of $130 
million directly to the search for disposal alternatives for the 
Harbor's dredged material. Nevertheless, at this time no viable 
alternatives to ocean disposal are available, and New York needs 
assistance from the federal government to develop realistic and 
environmentally compatible disposal alternatives.
    The needs outlined below reflect an emphasis on environmentally 
sound management of dredged material from the Harbor. I leave it to our 
partners in the Port Authority of New York and New Jersey, the U.S. 
Army Corps of Engineers, the U.S. EPA, the City of New York, and the 
many other stakeholders of the dredging forum to articulate further the 
capital program needs for dredging, channel deepening, and Port 
development. To the degree these efforts will continue and increase 
demands for dredged material disposal capacity, we look for funding 
support to address these needs under an environmentally sound strategy.
    In this regard, the Governors of the States of New York and New 
Jersey have committed to the pursuit of multiple options to enable a 
comprehensive approach to meeting our disposal and management needs for 
dredged materials. This includes:
  --identification and reduction of the sources of contamination that 
        constrain the options for beneficial use and environmentally 
        benign disposal of dredged material;
  --initiatives to develop sediment decontamination of technologies 
        that will enhance the prospects for beneficial use of Harbor 
        sediments;
  --development of both inwater and upland disposal capacity with 
        responsible siting and phased development linked directly to 
        progress in the cleanup of contaminated sediments;
  --research and development to continuously improve technologies and 
        methods for management of sediments; and
  --initiatives to restore habitat in the New York Harbor ecosystem, as 
        well as enhance habitat from the impacts of ongoing and future 
        projects.
    All of these activities directly relate to enabling the successful 
maintenance and development of New York Harbor to maintain its premier 
status as a major shipping port in the world while providing for the 
future environmental health of the Harbor. None of these activities 
should be narrowly viewed as only water quality improvement initiatives 
that should be otherwise funded under the Clean Water Act. Instead, 
water resources development, and the economic benefits that accrue from 
it, are directly dependent on the success of all of these initiatives.
sediment characterization, contaminant source identification trackdown 
                              and cleanup
    New York State is committing $14 million of its $65 million 
funding, associated with the joint dredging plan signed by the 
Governors of New York and New Jersey, toward a 5-year technical program 
to identify and track down the sources of contaminants of concern in 
the Harbor and to control those sources. Measurable progress toward 
annual contaminant reduction goals will allow effective planning for 
the most appropriate disposal capacity needs in the future. We request 
matching funds from the federal government to provide a comparable 
federal commitment toward these objectives. This will allow us to 
expand and accelerate our cooperative efforts to achieve the earliest 
possible benefits of a restored Harbor.
    Related to these efforts, the USGS has been funded under WRDA to 
conduct sediment transport studies in the Hudson and Mohawk Rivers and 
New York Harbor regions. This effort has produced enlightening results 
regarding sources of sediment loads into the Harbor. This data 
correlated with other sediment contaminant data will ensure that our 
trackdown and source control efforts are successful and appropriately 
targeted. We strongly recommend continued support to USGS to continue 
this important work at full funding.
    The return on investment in these efforts will be substantial in 
reducing the volume of contaminated sediments and their cost for 
disposal. The current disparity in disposal costs between clean and 
contaminated sediments ranging to well over $100 per cubic yard easily 
justifies the investments in contaminant reduction for a Harbor that 
requires 4 to 6 million yards of maintenance dredging annually.
        decontamination and beneficial use of dredged materials
    The beneficial use of dredged materials as a resource rather than 
their disposal as a ``waste'' is unquestionably a priority objective 
for the management of sediments throughout New York State. In order to 
achieve this objective, the appropriate physical and chemical 
properties of these materials must be demonstrated as suitable for 
their intended use. This may require special treatment, handling or 
testing.
    The ongoing decontamination technology demonstration program which 
WRDA has previously funded at $10 million over three years, based on a 
partnership between U.S. EPA, U.S. Army Corps of Engineers, U.S. 
Department of Energy (Brookhaven National Laboratories), the two 
states, and private industry must be expanded. As technologies have 
begun to demonstrate feasibility, funding is critical to full scale 
demonstration and private sector sponsorship.
    The variable characteristics of Harbor sediments and the range of 
contamination they exhibit in the Harbor will likely warrant a 
treatment train that combines a number of technologies to provide an 
effective suite of processing and decontamination to ensure optimum 
beneficial use opportunities.
    We support EPA's estimated need of $30 million to provide seed 
money for design plan and specifications to attract private sector 
investment on the range of technologies now showing best promise from 
the pilot study work being conducted. Several technologies have 
demonstrated some level of promise towards this end. This would also 
address meeting testing and costs for state regulatory approvals of 
upland beneficial use of sediments.
    New York State is willing to provide $5 million local share towards 
these efforts, in accordance with the Bi-State Dredging Plan.
                         containment facilities
    Significant time, effort, money and experience will be required to 
optimize the benefits of sediment decontamination and beneficial use. 
These efforts and those to reduce contaminant sources will not 
completely eliminate the need for significant disposal capacity for 
sediments, particularly over the near term. Inwater containment 
facilities have the potential for both significant environmental 
impacts as well as benefits. For this reason, rigorous siting studies 
must be conducted to support appropriate placement of these facilities. 
This applies to both nearshore and offshore containment.
    Similarly, New York State shares the conviction of other 
stakeholders in the Harbor that any development of containment facility 
capacity should be linked to progress in reducing the contamination in 
the Harbor. This demands phased development of such facilities. Such 
phasing, however, can add substantially to both design complexity and 
costs in lost economies of scale. We support full funding to the Army 
Corps of Engineers to complete appropriate siting studies, design and 
construct containment facilities, and offset the cost differential 
attributable to phased facility development.
    Nearshore containment facilities, i.e., interpier fills, also 
require seed money for plans, specifications, and application 
development to attract private sector investment and beneficial use 
development of filled areas. This same need for private sector 
incentive also applies to the development of upland disposal capacity 
facilities. This concept of public/private partnerships to attract 
private sector investment for near shore containment facilities is not 
unlike the CDF partnerships provided last year under the Water 
Resources Development Act for Great Lakes dredging activities.
    Technologies for both upland and inwater management of sediments 
continue to evolve. Research and development (R&D) funds are needed to 
continue to ``push the envelope'' on best management practices for such 
facilities. Upland disposal of dredged material on any large scale 
requires significant research on the required monitoring of the 
physical and chemical behavior of contaminants placed in such 
facilities. Funding to support these monitoring programs should be 
available as an incentive to private sector sponsors of such 
facilities. Similarly, R&D funds to further the work of the Corps of 
Engineers on deployment and placement technologies for subaqueous 
disposal of dredged materials should be continued in order to 
demonstrate that these technologies are both environmentally safe and 
feasible in challenging settings.
                          habitat restoration
    The federal government should provide 100 percent funding for 
habitat restoration projects being developed in partnership between the 
Corps of Engineers, NOAA, and the states for degradation and losses 
from historic dredging and disposal practices, and for habitat 
enhancements that could be made incidental to further containment 
facility development. In addition, the Bi-State Dredging Plan provides 
for up to $20 million for habitat restoration, creation, and other 
dredged material management initiatives for which New York State seeks 
50 percent matching funds in feasibility investigation and 75 percent 
matching share in construction costs. This would be consistent with 
other ongoing habitat restoration initiatives being conducted in 
concert with the Corps of Engineers for the Hudson River, Jamaica Bay 
and Western Long Island Sound.
    On behalf of Governor Pataki and the State of New York, I thank you 
for the opportunity to present our recommendations to the Committee. We 
would be pleased to make staff available to answer any follow-up 
questions the Committee may have in regard to any of the above 
recommendations. Thank you.
                                 ______
                                 
     Prepared Statement of Sharpe James, Mayor, City of Newark, NJ
    Mr. Chairman and Members of the subcommittee, thank you for giving 
me the opportunity to submit testimony about a project under your 
jurisdiction which is very important to the people of Newark, New 
Jersey and the surrounding region. The Passiac River Streambank 
Restoration Project, known as the Joseph G. Minish Passaic River 
Waterfront Park and Historic Area, is an important part of the overall 
economic and transportation development plan of the City of Newark.
    The project was authorized at a level of $75 million in last year's 
Water Resources Development Act, and has been fully planned by the Army 
Corps of Engineers with last year's appropriation of $900,000. The 
streambank restoration and bulkhead replacement, which is the first 
phase of the overall project, is now ready to begin construction. An 
appropriation of $10 million is requested so that this integral element 
in Newark's revitalization can move from detailed plan to construction.
    This investment in Newark's future will help us to improve the 
economic status of our nation's third oldest major city. The 
development of the riverfront now is a critical element in the overall 
plan for Newark's downtown revitalization. This linear park will serve 
as a visual and physical linkage among several key and exciting 
development projects. It is adjacent to one of the oldest highways in 
the nation, Route 21, which is undergoing a multi-million dollar 
realignment. The planned Newark-Elizabeth Rail Link, which will connect 
Newark's two train stations, and ultimately, Newark International 
Airport and the neighboring City of Elizabeth, will provide users with 
access to mass transportation. The riverfront development will 
complement and provide a visual and physical connection with the new, 
$170 million New Jersey Performing Arts Center, which will open in the 
Fall of 1997. Further east along the riverfront, the City of Newark and 
Essex County are moving ahead with plans to construct a minor league 
baseball and soccer facility at Riverbank Park, along with an enhanced 
replacement playground facility, also accessible from the riverfront 
walkway.
    The riverfront will be the nexus of these activities, creating a 
vibrant downtown center that will provide economic development 
opportunities for the citizens of Newark and our region. Visitors from 
throughout the nation are expected to come to visit our revitalized 
city, and participate in the exciting growth and development taking 
place. There is tremendous potential for Newark's riverfront to mirror 
the success of other riverfront developments throughout the country, 
and Newark stands ready to accept the challenges such developments 
present.
    We have a once in a lifetime opportunity to coordinate several 
major development activities into a virtually seamless development 
plan. The appropriation of $10 million which I am requesting will serve 
to incorporate the Army Corps of Engineers' construction into our 
overall economic development plan to reinvigorate Newark. I urge you to 
support this appropriation request.
    In closing, I would like to extend my thanks to the entire New 
Jersey Delegation for its ongoing support, especially to subcommittee 
Member Rodney Frelinghuysen for his advocacy of this critical project. 
The time and attention of this subcommittee are deeply appreciated.
                                 ______
                                 
Prepared Statement of Hon. Charles A. Gargano, Chairman and CEO, State 
    of New York, Empire State Development Corporation and Frank M. 
     McDonough, Director, Maritime Resources, State of New Jersey, 
Department of Commerce and Economic Development and Lillian C. Borrone, 
Director, Port Commerce Department, Port Authority of New York and New 
                                 Jersey
    As representatives for the States of New Jersey and New York, and 
the Port Authority of New York and New Jersey we support the U.S. Army 
Corps of Engineers (Corps) fiscal year 1998 budget request, believing 
that in most cases it provides the appropriation of sufficient funds 
for projects related to the Port of New York and New Jersey. We 
particularly note our support for the budget request of $1.25 million 
for the New York & New Jersey Harbor, NY & NJ feasibility study. This 
study, authorized in WRDA 1996 and strongly supported by the 
administration will determine the feasibility of dredging federal 
channels to depths as great as 50 feet in order to ensure an efficient, 
world-class navigation infrastructure for international and domestic 
commerce that is projected into the next century. In addition to our 
above endorsement we have identified nine additional sums for essential 
projects that we respectfully ask you to consider.
    The amounts requested below are what we believe necessary to 
continue and advance existing construction and maintenance navigation 
projects and provide for much needed studies, based on our ongoing 
partnership with the Corps. Where applicable, we and other sponsors are 
prepared to provide the local share of funds as required. All told, we 
recommend an additional federal appropriation of $3,300,000 in funds 
for Federal Navigation Projects in fiscal year 1998. Listed below are 
the projects requested for the State of New York and the State of New 
Jersey:

Construction:
    Kill van Kull and Newark Bay Channel, NY&NJ...............  $500,000
    NY Harbor and Collection of Drift Project, NY&NJ..........   600,000
Studies:
    NY & NJ Channels Arthur Kill, Howland Hook................   500,000
    NY Harbor Anchorages Red Hook Flats Anchorage.............   100,000
    Port Series.........................................................
    National Dredging Study.............................................

    Listed below are projects requested for the State of New Jersey:

Construction: NY Harbor and Adjacent Channels--Port Jersey, NJ   600,000
Studies: NY Harbor and Adjacent Channels--Claremont Channel, 
    NJ........................................................   400,000
O & M: Ward Point Bend........................................   600,000

Construction
    Kill van Kull, Phase II & Newark Bay Channels, NY & NJ.--Kill van 
Kull, Phase II & Newark Bay Channels, NY & NJ is a harbor deepening 
project authorized for construction on the Fiscal Year 1985 
Supplemental Appropriations Act (Public Law 99-88) and WRDA 1986. The 
channels at issue serve the busiest and largest container facilities on 
the Atlantic Seaboard and we have heard a consistent message from the 
steamship lines that service the Port Newark and Elizabeth Marine 
Terminals on Newark Bay and from the harbor pilots that the completion 
of the project to 45 feet is an absolute necessity. The full benefits 
of the authorized 45 feet navigation project have been postponed due to 
construction delays. We believe it is imperative that Phase II 
engineering and design be completed as soon as possible so that 
construction can commence immediately. The project sponsor will be 
prepared to provide local share subject to a Project Cooperation 
Agreement being negotiated. We are requesting an appropriation of 
$500,000, over the budget request, to initiate construction in the last 
quarter fiscal year 1998.
    New York Harbor and Collection of Drift Project, NY & NJ.--The New 
York Harbor and Collection of Drift Project, NY & NJ (Waterfront Clean-
up)removes sunken hulls and decaying shore structures that are the 
sources of dangerous and costly harbor drift which also runs afoul of 
our beaches. The project provides the economic benefit of safe 
navigation. The Corps of Engineers has estimated that nearly 18,000 
commercial, public and recreation vessels collide annually with drift 
in our port causing damage to propellers, shafts and hulls. The annual 
associated repair costs and other economic losses average greater than 
$53,000,000. This project was authorized most recently under WRDA 1988 
with an annual authorization of $6,000,000. We are requesting an 
appropriation of $600,000 for this critical project and that the 
Secretary be directed: to continue construction of the Brooklyn 2A and 
Passaic River Barge reaches; and to complete Limited Re-evaluation 
Reports for the Brooklyn 2B, Arthur Kill (NJ), Shooters Island, 
Bayonne, and Kill van Kull (NY) reaches.
Studies
    New York & New Jersey Channels, Arthur Kill Channel, Howland Hook 
Marine Terminal, NY.--The Arthur Kill Channel, Howland Hook Marine 
Terminal project was authorized by WRDA 1986, WRDA 1992 and WRDA 1996. 
The channel improvement includes deepening the existing 35 foot channel 
to 41 feet from its confluence with the Kill van Kull Channel to the 
Howland Hook Marine Terminal, and selected widenings and realignments 
of the channel for safety. The Port Authority has invested $35 million 
to modernize this terminal and, with New York City, approximately $18 
million was spent for the berth dredging required to put this terminal 
in service. The marine terminal currently employs 275 people on peak 
days and is expected to grow to 650 to 800 by 2000. In addition the 
States of New York and New Jersey, the City of New York and the Port 
Authority are working to reestablish rail service to the terminal in 
the next year. The $500,000 additional appropriation request that we 
make for the Arthur Kill Channelcovers the initiation of pre-
construction engineering and design for a 45 foot channel as authorized 
in WRDA 1996.
    New York Harbor Anchorages, Red Hook Flats Anchorage, NY.--The Red 
Hook Flats Anchorage is part of the New York Harbor and Adjacent 
Channels project. It was constructed to accommodate ocean going cargo 
ships and tankers. The capacity within this anchorage is inadequate to 
accommodate today's vessels. The anchorage was designed by the Corps of 
Engineers in the early 1960's for a vessel averaging 525 feet in 
overall length and with a draft of 30 feet. Today's ships are almost 
1,000 feet long with drafts of 40 feet or greater, therefore requiring 
additional space and depth beyond that allowed for in the original 
anchorage design. In order to provide safe navigation and maintain our 
bi-state port's capability to accommodate current and future vessel 
needs we request that $100,000 be appropriated to commence a 
feasibility study for the deepening of Red Hook Flats. The Corps has 
the authority to undertake this study under a Congressional resolution 
adopted by the Senate Committee on Environment and Public Works on 
December 5, 1980. The States of New York and New Jersey support this 
project, have expressed an interest to fund the non-federal share.
Port Series
    We request that the Secretary be directed to accelerate the survey 
of the NY/NJ port facilities, Port Series (Number 5), under the 
national Port Series report program into fiscal year 1998 instead of 
the currently programmed time frame for fiscal year 1999. Out of 
seventy-two ports for which there are port series, only seven ports 
pre-date 1988, the year in which the NY/NJ Port Series was last 
published. Among the largest ports in the nation the NY/NJ Port Series 
is by far the oldest. The data collected in the Port Series is critical 
to the Corps' work on the New York & New Jersey Harbor, NY & NJ 
Navigation Study.
    National Dredging Study.--The National Dredging Study, which we 
hope will be concluded in two years, is an important, but uncompleted, 
resource to forecast national dredging needs and to assess regional 
infrastructure investment. The results of the study are critical to 
decisions sought from the New York and New Jersey Harbor, NY & NJ 
Navigation study regarding channel deepening requirements in the Port 
of New York and New Jersey. We request that the Secretary be directed 
to complete work initiated under Section 402, Water Resources 
Development Act (WRDA) 1992.
                               new jersey
Construction
    New York Harbor and Adjacent Channels (Port Jersey), NJ.--The Port 
Jersey Channel in Bayonne, New Jersey presently serves 8 shipping lines 
at Global Terminal. This facility handles over 300 vessel arrivals 
annually with approximately 280,000 twenty-foot unit containers. More 
than 600 terminal employees with an annual payroll of $25 million, and 
3,000 indirect jobs depend on this facility for their livelihood. As a 
privately owned terminal, Global pays approximately $10,000,000 in 
federal, state, and local taxes annually. In addition the channel also 
provides access for the U.S. Military Ocean Terminal and the Port 
Authority Auto Marine Terminal. The U.S. Military Ocean Terminal, which 
will remain in service under Army control until 1999 and then be turned 
over to the City of Bayonne, is being evaluated for a number of 
maritime and commercial re-use options. Because of the importance of 
the facilities, the State of New Jersey has designated disposal sites 
and is prepared to enter into an appropriate project cooperation 
agreement. Therefore, we request that the Secretary be directed to 
complete a Limited Re-evaluation Report, initiate Plans and 
specifications, execute a Project Cooperation Agreement and other 
related activities in order to initiate physical construction in fiscal 
year 1998. This channel was authorized for construction by WRDA 1986. 
Since the Mud Dump was the anticipated disposal location and that site 
will be closed September 1, 1997, we request that Congress stipulate 
that any increase in project cost due to the unavailability of the Mud 
Dump Site not be subject to the cost limitations provided by Section 
902, WRDA 1986. We request $600,000 in appropriations for this project, 
which was authorized for construction in 1986.
Studies
    New York Harbor and Adjacent Channels (Claremont Channel), NJ.--
Located on the Hudson River in New Jersey, Claremont Channel has an 
average depth of 27 feet mean low water. A project to deepen Claremont 
Channel to 42 feet mean low water was authorized for construction in 
WRDA 1986. Although authorized to 42 feet, the Phase I modified project 
will provide shipping economies with a 34 foot channel, which would be 
sufficient for vessels already having adjusted their operations to meet 
current conditions through lightering and use of tidal flows. Two scrap 
metal exporting companies and a crushed stone aggregate terminal are 
the major users of this channel. Scrap metal exports have averaged over 
1.5 million longtons per year and are our region's number one export. 
Meanwhile, the crushed stone transshipments approach 4 million tons 
annually. Combined, these three firms employ 300 persons directly and 
provide nearly 3,000 indirect jobs through suppliers, and support to 
longshore services. We request a $400,000 appropriation to conclude the 
Limited Re-evaluation Report, initiate Plans and Specifications, and 
execute a preconstruction engineering and design work for improvements 
to the Claremont Channel. The State of New Jersey has expressed an 
intent to fund the non-federal share and is prepared to identify an 
upland disposal site for the dredged material.
Operations & Maintenance
    Ward Point Bend.--Ward Point Bend, at the southernmost point on 
Staten Island is shoaling such that the depth is currently 32 feet. The 
channel at this location needs a depth of 35 feet. Ward Point Bend 
serves the petroleum industry and acts as a secondary route both to and 
from Howland Hook in Staten Island and Port Newark/Elizabeth Marine 
Terminals in New Jersey. We have discussed this need with the New York 
District and the Sandy Hook Pilots who agree that this is a critical 
navigation safety and access concern. We are requesting an 
appropriation of $600,000.
                               conclusion
    A major feature of the budget request is the administration's full 
funding initiative. The idea that is advanced would fully fund new 
construction projects in the bill with the intent to complete those 
projects within 5 years. While there is some merit to committing up 
front the project funding, as well as precedent in public works 
financing, it presents a major problem for navigation projects. For 
example, large projects such as those planned for the Port of New York/
New Jersey could be disadvantaged due to their size and cost. Budgeting 
for these projects according to the full funding method means that only 
a relatively small number of projects can be started in any given year. 
How would a large project costing several hundreds of millions of 
dollars be handled? First, given the limitations on construction 
spending it likely would crowd out many other projects from being 
included or be crowded out by the understandable need for the Corps to 
fund a variety of projects. It might also cause projects to be 
segmented in order to make a large project fit both budgetary 
constraints and the five-year project schedule requirement.
    In short, it concerns us that such a well-intended approach would 
slow the initiation of projects, cloud the commitment of the federal 
government to valuable projects and result in the completion of 
potentially unusable segments. Rather, Congress and the administration 
should collectively work to ensure that navigational capital 
improvement spending, rather than limited by artificial budget process 
constraints, is increased to support the many construction projects 
that could be initiated and to speed delivery of the economic benefits 
inherent in infrastructure improvements.
    Lastly, we should note our concern about the subcommittee's new 
limits on hearing witnesses. We have long appreciated the willingness 
of the Subcommittee Members to hear our petitions for project funding. 
While it is a long and no doubt tiring process for the Members and 
staff, we value the opportunity it gives the Port and hope that next 
year the Subcommittee will consider returning to holding hearings for 
public witnesses.
                                 ______
                                 
  Prepared Statement of Vernon A. Noble, Chairman, Green Brook Flood 
                           Control Commission
    Mr. Chairman and Members of the Subcommittee: My name is Vernon A. 
Noble, and I am the Chairman of the Green Brook Flood Control 
Commission. I submit this testimony in support of the Raritan River 
Basin--Green Brook Sub-Basin project, which we request be budgeted in 
fiscal year 1998 for $3,700,000 in construction general funds.
    The Commission was established in 1971, pursuant to an Act of the 
New Jersey Legislature, following disastrous flooding which took place 
in the Green Brook Basin in the late Summer of 1971. That flood caused 
$304,000,000 in damages (April 1996 price level) and disrupted the 
lives of thousands of persons.
    In the late Summer of 1973, another very severe storm struck the 
area, and once again thousands of persons were displaced from their 
homes. $482,000,000 damage was done (April 1996 price level) and six 
persons lost their lives.
    Thanks to the efforts of New Jersey's Representatives and Senators 
in Congress, the Corps of Engineers was authorized by Congress in 1986 
to design a solution to this problem of flooding. The floods of 1971 
and 1973 were only the most recent in a long series of severe floods. 
Flooding in this Sub-Basin dates back to the late 1800's when they were 
first recorded, and has become more damaging as the population of the 
area has grown.
    The Green Brook Flood Control Commission is made up of appointed 
representatives from Middlesex, Somerset and Union Counties in New 
Jersey, and from the 13 municipalities within the Basin. This 
represents a combined population of almost one-quarter of a million 
(248,084) people.
    The Members of the Commission are all volunteers, and for 26 years 
have served, without pay, to advance the cause of flood protection for 
the Basin. Throughout this time, the Corps of Engineers, New York 
District, has kept us informed of the progress of the project, and a 
representative from the Corps has been a regular part of our monthly 
public meetings.
    Thanks to the vigorous support of New Jersey's Congressional 
Delegation, the Congress in 1986 authorized a comprehensive flood 
control project for the protection of the entire Green Brook Basin at a 
then established estimated cost, in 1985 dollars, of $203,000,000.
    In 1987, Congress adopted Legislation which included a provision 
making it clear to the Corps of Engineers that protection is to be 
designed for the entire Green Brook Basin, rather than only the lower 
portion of the Basin, as had one time been studied by the Corps of 
Engineers.
    We believe that it is essential that the Green Brook Flood Control 
Project be carried forward, and pursued vigorously to achieve 
protection at the earliest possible date. This project is needed to 
prevent loss of life and property, as well as the trauma caused every 
time there is a heavy storm.
    We urgently request an appropriation for the project in fiscal year 
1998 of $3,700,000.
    New Jersey has strongly reaffirmed its support for the project to 
provide full protection for all of the people of the Basin. In January 
1992, the New Jersey Legislature passed a Bill, which was signed by the 
Governor, establishing a program to plan for the non-Federal share for 
this and other water resources related projects. New Jersey has 
programmed budget money for its share of the project for fiscal year 
1998.
    The more quickly the construction of this project is completed, the 
less will be the total cost, and the sooner the project will provide 
protection.
    Economics and costs are of course important, but personal human 
tragedy, and the loss of life, is more important.
    During the past 12 months the New York District of the Corps of 
Engineers has released their Draft General Reevaluation Report and 
Supplemental Environmental Impact Statement, dated December 1996. This 
GRR/SEIS has been endorsed by the New Jersey Department of 
Environmental Protection. It has also been supported by a Resolution 
adopted February 5, 1997 by the Green Brook Flood Control Commission, 
and by a Resolution adopted February 4, 1997 by the Freeholders of 
Somerset County, New Jersey, where the construction is scheduled to 
begin in 1998.
    We urgently request that the Congress provide an appropriation of 
$3,700,000 in construction general funds for the Green Brook Flood 
Control Project in fiscal year 1998.
    Thank you, Mr. Chairman, and Members of the Subcommittee, for the 
opportunity to submit this testimony to you.
                                 ______
                                 
             Prepared Statement of the World Wildlife Fund
    On behalf of World Wildlife Fund's (WWF) 1.2 million members, we 
appreciate the opportunity to submit testimony on the fiscal year 1998 
Energy and Water Appropriations bill. We believe that this bill 
provides an opportunity to accelerate a bipartisan effort to better 
integrate environmental and economic objectives in water resources 
planning.
    In this age of deficit reduction and broad public support for 
natural resources conservation, the Army Corps of Engineers must 
develop more cost effective and environmentally sensitive strategies 
for achieving both its traditional missions, such as flood control and 
navigation maintenance, and its more recent environmental protection 
mission. In reaching out for innovative approaches to its work, the 
Corps will rely increasingly on relationships with both public and 
private sector partners. Calling on the skills of agencies such as the 
Natural Resources Conservation Service, Fish and Wildlife Service and 
National Park Service to help design water resource management projects 
that encompass a wide range of objectives and which are environmentally 
and economically sustainable, the Corps can greatly increase the 
efficiency and effectiveness with which it accomplishes its missions. 
By incorporating input from a range of non-federal partners into these 
projects, the Corps can build a broader base of support and perhaps 
avoid the need for costly environmental mitigation and restoration 
requirements in future years.
    Several projects authorized in the Water Resources Development Act 
of 1996 provide the Corps with opportunities to achieve this vision of 
public/private partnership and multiple objective planning. These 
include the Redwood River basin in Minnesota, the Upper Susquehanna 
River basin in New York and Pennsylvania, and the Everglades and South 
Florida Ecosystem Restoration project in Florida.
Redwood River Basin, Minnesota (WRDA 96, Sec. 543)
    WWF requests that the Subcommittee include an additional $750,000 
in fiscal year 1998 for the U.S. Army Corps of Engineers to participate 
in the Redwood River basin project.
    Flooding in the Redwood River basin has resulted in agricultural, 
urban, and residential damages, particularly in the town of Marshall, 
Minnesota. Wetland drainage could be a major contributing factor to 
increased flood peaks and flood damages in the basin. Prior to 
agricultural drainage, roughly 43 percent of the basin was wetland. 
Approximately 19 percent of these former wetland acres are depressional 
and have potential value for stormwater storage. Over 82 percent of the 
watershed is in agricultural use, indicating extensive wetland drainage 
for agriculture. Prior to drainage for agriculture, many of the 
wetlands in the Redwood River watershed were closed basins that stored 
water during rainfall events and did not contribute directly to flows 
in the Redwood River.
    Two flood control projects that were planned for the basin have not 
yet been constructed because of public opposition and environmental 
impacts. One of these, which would be constructed by the Corps, would 
divert water from the Redwood River to an adjacent river basin during 
periods of heavy flows. The residents of the other basin do not want to 
accept the water. The other project is a dam which was originally 
contemplated by the Corps, but which lacked sufficient economic 
benefits to justify federal funding. This dam would periodically flood 
both farmland and a wildlife preserve.
    The Redwood and Minnesota Rivers also are heavily polluted by 
suspended sediments, fertilizers and pesticides that largely run off of 
agricultural land. The State of Minnesota has initiated a ``Clean Water 
Action Partnership'' to involve communities in the clean up of the 
Minnesota River basin. The Redwood-Cottonwood Rivers Control Area 
(RCRCA), a county level joint powers board, is currently conducting a 
project to improve water quality in the Redwood River basin. This 
project involves landowners in the installation of soil and water 
conservation practices and the restoration of wetlands.
    Wetland restoration and the installation of soil and water 
conservation practices could significantly reduce flood damages and 
generate other benefits including enhanced water quality in the Redwood 
basin. The Redwood watershed is also in the prairie pothole region of 
the upper Midwest, one of the most important waterfowl breeding areas 
in the United States, and therefore a high priority for wetland 
restoration. Other potential benefits of a restoration approach to 
flood damage reduction include reduced soil erosion and increased 
groundwater recharge and water supply.
    The Natural Resources Conservation Service and RCRCA are building 
on the RCRCA's clean water project by developing a water management 
plan for the Redwood River watershed that would use wetland restoration 
and soil and water conservation practices to reduce flooding, improve 
water quality, increase wildlife habitat, and provide other benefits. 
WWF is helping to coordinate the Redwood River Water Management Project 
and is providing technical assistance. Other partners in the project 
include the Minnesota Board of Water and Soil Resources, the Minnesota 
Pollution Control Agency, the Minnesota Department of Natural 
Resources, and The Wetlands Initiative, a non-profit wetland 
restoration organization.
    The agencies are currently developing a hydrologic model for a 
small sub-basin within the Redwood River watershed. This model will be 
used to estimate the potential reductions in peak flood flows that 
would result from small retention projects, such as wetland 
restorations and soil and water conservation practices. They will then 
extrapolate the results of the model to other portions of the Redwood 
basin above Marshall, Minnesota using a Geographic Information System. 
Based on the extrapolation, we will develop guidelines and 
recommendations for installation of these practices. We will then seek 
sources of funding through existing local, state, and federal programs 
to install the recommended practices and monitor the effect on flood 
peaks and water quality. Once the Redwood project has been well 
established, the project results can be used in planning and 
implementing watershed management strategies for the Minnesota River 
basin and areas with similar landscape features in the upper 
Mississippi River basin.
    The success of this project is dependent on the participation and 
leadership of local landowners. In order to provide opportunities for 
direct landowner participation, RCRCA, the Caddo Lake Institute in 
Texas, and WWF are undertaking a project that will train landowners in 
monitoring water quality and hydrology in the Redwood River basin. The 
monitoring activities will be only one component of community 
participation in the Redwood project. It is our intent that local 
landowners will play a major role in developing and implementing the 
water management plan, as well.
    The Corps of Engineers' St. Paul District has expressed interest in 
the Redwood project, but their participation has been extremely limited 
due to lack of funds. The project would benefit greatly from the 
involvement of the U.S. Army Corps of Engineers. In particular, the 
Corps' modeling and GIS expertise would improve the technical team's 
ability to model the demonstration watershed and extrapolate the 
results to other parts of the Redwood and Minnesota River basins.
Upper Susquehanna River, New York and Pennsylvania (WRDA 96, Sec. 567)
    WWF urges the Subcommittee to provide an additional $500,000 for 
the Juniata Watershed in Pennsylvania and $500,000 for the Susquehanna 
River upstream of the Chemung River New York for flood damage 
reduction, water quality improvement, and wildlife habitat creation in 
the Upper Susquehanna River Basin in Pennsylvania and New York.
    The Susquehanna River is the largest river in the U.S. east of the 
Mississippi. It contributes over half of the freshwater flow to the 
Chesapeake Bay and is therefore considered the ``lifeblood'' of this 
important estuarine system. The Susquehanna basin is suffering from a 
number of environmental problems that can be addressed through 
strategic watershed restoration and management, including non-point 
source pollution, flood damages, and declines in biodiversity.
    The Corps' Baltimore District would use the requested funding for 
the first year of the project to accomplish a series of coordination 
and data collection activities with federal, state, regional and local 
agencies and the public. This data collection would be accomplished 
through individual meetings and public workshops with emphasis placed 
on coordination with local and regional conservation districts, 
planning agencies, and environmental organizations. The information 
collected would be used to define specific problem areas and potential 
solutions that have regional and local interest and support.
    Following the assessment of problems and potential solutions, the 
Corps and partner organizations would identify the costs and outputs of 
a full range of non-structural solutions required to achieve the 
project objectives. The result of this analysis will be a comprehensive 
strategy that outlines projects and actions needed to address water 
resource issues in the Upper Susquehanna River basin and identifies 
non-federal partners. Funding under this authority in future years will 
be used to implement pilot projects to test the cost and effectiveness 
of various approaches for application in a basin-wide program.
Everglades and South Florida Ecosystem Restoration (WRDA 96, Sec. 528)
    The South Florida ecosystem restoration project is of major 
importance to the environmental community because of its unique role in 
preserving the biodiversity of North America and because of the example 
that it sets for the world. While touted primarily as an environmental 
restoration project, the benefits of this project to Florida's economy 
are enormous. The hydrologic processes of the South Florida ecosystem 
must be restored to provide water flows of sufficient quantity and 
quality to support the Everglade's abundant wildlife, the water supply 
of the burgeoning lower east coast, and the aquatic life of Florida 
Bay. These functions, in turn, are essential to support the tourism, 
fishing and diving industries of South Florida.
    WWF supports the Administration's request for full funding of the 
$75 million Critical Restoration Projects authority [sec. 528 (b)(3)]. 
Projects funded under this section could reduce total federal 
expenditures on restoration by addressing ecological and hydrologic 
issues as they are identified, rather than waiting for the completion 
of a feasibility study and for authorization and funding of a preferred 
alternative. Delays in implementation of critical projects could lead 
to further encroachment of exotic plant species and declines of 
endangered native species, resulting in costlier, future eradication 
and recovery costs.
    WWF enthusiastically supports continued funding for the restoration 
of the Kississimme River. The Administration requested $3 million for 
this effort in fiscal year 1998. The Jacksonville District actually 
needs approximately $11.5 million over the next fiscal year for 
Kissimmee River restoration, however. We urge the subcommittee to add 
the difference of $8.5 million to the Kississimee project budget. This 
funding is crucial to the initiation of contracts, performance of 
design and monitoring work, and continuation of construction activities 
such as degrading existing levees and modifying the outlet structure to 
Lake Kissimee.
    We also are concerned about the outstanding federal obligation to 
fund Stormwater Treatment Area 1 East. It is our understanding that the 
South Florida Water Management District has provided $15 million for 
land acquisition for this project, and may provide as much as $10 
million in additional funding to complete the land purchase. This 
project was authorized in Section 315 of WRDA 96, which explicitly 
states that STA 1 East is to be constructed entirely at federal 
expense. We also are aware that it has been suggested that some of the 
money provided by the 1996 Farm Bill be used to fund construction of 
STA 1 East. We oppose this use of Farm Bill money for two reasons: 
first, acquisition of lands in the Everglades Agricultural Area and the 
East Coast buffer zone constitute our top priorities for this money; 
and, second, because construction of STA 1 East was included in 
legislation authorizing activities within the Corps of Engineers. For 
that reason, we believe that it is appropriate for the funding to come 
through the Corps' budget. We encourage Congress to provide up to $25 
million to reimburse the South Florida Water Management District for 
its outlays for STA 1 East.
    World Wildlife Fund appreciates the opportunity to submit our views 
on the energy and water budget for fiscal year 1998. We look forward to 
working with the Subcommittee on the Energy and Water Appropriations 
bill. Thank you.
                                 ______
                                 

         OHIO RIVER VALLEY WATER RESOURCE DEVELOPMENT PROJECTS

Prepared Statement of R. Barry Palmer, Executive Director, Association 
   for the Development of Inland Navigation in America's Ohio Valley
    Mr. Chairman and Members of the Subcommittee: I am R. Barry Palmer, 
Executive Director of DINAMO, the Association for the Development of 
Inland Navigation in America's Ohio Valley. DINAMO is a multi-state, 
membership based association of business and industry, labor, and state 
government leaders from throughout the Ohio Valley, whose singular 
purpose is to expedite the modernization of the lock and dam 
infrastructure on the Ohio River Navigation System. Our organization 
receives no money from the Federal Government. Largely through the 
leadership of this subcommittee and the professional efforts of the US 
Army Corps of Engineers, we in the Ohio Valley are beginning to see the 
results of 15 years of continuously hard work in improving our river 
infrastructure. However, the efforts in moving towards expeditious 
construction of improvements of lock and dam replacement projects in 
the Ohio Valley and the nation must not be sidetracked by the proposed 
policies for full funding and advance appropriations as set forth in 
the President's fiscal year 1998 Civil Works Budget for the US Army 
Corps of Engineers. We urge the Appropriations Committee to reject 
these proposed policies and restore the millions of dollars deleted 
from the President's budget in this and future years for lock and dam 
modernization on the Ohio River Navigation System. Lock and dam 
modernization projects already authorized for construction in the Ohio 
Valley would now take at least forty years or more to complete under 
these proposed policies and budget projections. In fact it is 
questionable whether some of the projects authorized but not yet funded 
for construction would ever be built.
    We ask this distinguished subcommittee today for funding of lock 
and dam modernization objectives in the Ohio Valley in accordance with 
the full capability of the US Army Corps of Engineers. Attached is a 
letter from Colonel Alexander Jansen, Ohio River Division Commander, US 
Army Corps of Engineers, stating the Corps of Engineers capabilities. 
For fiscal year 1997 DINAMO is requesting funding for each project as 
follows:
Recommendations for fiscal year 1997:
    For the Robert C. Byrd Locks and Dam modification project, formerly 
the Gallipolis Locks and Dam on the Ohio River, OH/WV, about 
$14,800,000 for continued construction.
    For the Winfield Lock Replacement on the Kanawha River, WV, 
$11,200,000, for continued construction.
    For the Olmsted Locks and Dam, replacing Locks and Dams 52 and 53 
on the Lower Ohio River, IL/KY, $105,500,000, for continued 
construction. The lock contract was awarded last year for about $224 
million and is scheduled to be completed in three more years. Continued 
design and engineering of the remaining elements of the project will 
also be required.
    For improvements to Monongahela River Locks and Dams 2, 3 & 4, PA, 
$20,300,000, for continued construction. The Ohio River Division 
Commander reports that about $5,500,000 can be carried over from fiscal 
year 1997, reducing the appropriation request to $14,800,000.
    For the McAlpine Lock Project on the Ohio River, IN/KY, about 
$10,400,000 to continue construction, but notably for initiation of 
site preparation and wharf improvements that will lead to construction 
of the new 110 feet by 1,200 feet lock addition.
    For the Marmet Lock Replacement on the Kanawha River, WV, 
authorized for construction in the Water Resources Development Act of 
1996, a total of $8,000,000 and a ``new construction Start'', in order 
to initiate real estate acquisition and complete Design Memorandums, 
initiating Plans and Specifications on the main construction contracts 
and initiating archeological field work.
    For the Kentucky Lock Addition on the Tennessee River, KY, 
$6,100,000 to continue Pre-Construction Engineering and Design and 
provide for a ``new construction start'' by initiating two construction 
contracts. This project was authorized for construction in the Water 
Resources Development Act of 1996. About $4.7 million would spent to 
continue design work, including completion of the tower relocation and 
boat ramp relocation plans and specifications; continued lock, railroad 
relocation, and powerhouse access road relocation design memoranda 
work; and initiation of work on the structural properties and 
environmental design memoranda. About $1.4 million would be dedicated 
for construction of the relocation of the TVA transmission towers and 
relocation of a boat ramp.
    For the Ohio River Mainstem Study, including studies related to 
modifications of Uniontown, Newburgh, and Cannelton Locks and Dams, 
$8,800,000. This level of funding is needed to complete the feasibility 
studies leading to an authorization report enabling construction of 
additional capacity for the Uniontown, Newburgh, and Cannelton Locks 
and Dams, Ohio River, IN/KY. Also the Corps of Engineers needs to 
initiate studies to determine where additional improvements may be 
needed in future years along the Ohio River Navigation System.
    It is essential, given the manner in which inland navigation 
infrastructure is viewed in the budget, that this Committee fund major 
components of the Monongahela River Locks and Dam 2, 3, and 4 and the 
McAlpine Lock Addition and provide new starts for the Marmet 
replacement and the Kentucky Lock Addition.
    Currently the Administration has taken large sums of money out of 
the inland navigation construction program in the next five fiscal 
years and allocated these monies for other purposes. For example, in 
the next five fiscal years, $258 million has been taken away from the 
Lower Monongahela project. The allocation for fiscal year 1998 is $2.7 
million, while the capability of the Corps of Engineers is $20.3 
million. At McAlpine, nearly $170 million has been reallocated for 
other purposes. The Administration recommends $1.7 million, while the 
Corps of Engineers capability is $10.4 million. Simply put it is 
essential that the Congress keep these projects funded on an optimal 
level.
    You will note, Mr. Chairman, that we are requesting $8,000,000, and 
a ``new start'' for construction funding for the Marmet Lock 
Replacement. Also we urge your support for a ``new start'' for the 
Kentucky Lock Addition and $6.1 million or prepare for construction of 
major components of the new facility. Both the Kentucky Lock Addition 
and the Marmet project were authorized for construction by the Water 
Resources Development Act of 1996 and are at the point in their 
development where the Corps of Engineers could initiate acquisition of 
real estate and complete initial construction contracts.
    The existing Marmet Locks and Dam is located in a highly populated 
area, and the proposed Marmet Lock has significant social impacts. An 
estimated 129 acres of real estate would be acquired in West Belle, 
including 71 acres of vacant land. Included would be 234 residential 
and 10 commercial units. Although alternative lock plans which would 
reduce the impact on the nearby residential communities were studied by 
the Corps, all other alternatives either do not provide satisfactory 
navigation conditions or have a much higher cost. Hence, design of the 
new lock plan has focused on limiting real estate acquisitions to the 
minimum necessary for construction.
    A community advisory committee, led by Congressman Bob Wise, has 
been keeping the community informed of developments in the Marmet 
study. It is our understanding that there is a general consensus among 
the residents that the new lock is essential to the local industrial 
base and to insure jobs in the region. Most affected residents plan to 
relocate within a few miles of their present location, and most of the 
businesses expressed a desire to reopen in the general area. Many 
affected residents are concerned about further delays and are anxious 
for land acquisition to begin. DINAMO is sympathetic and appreciative 
of the concern of affected residents and comes to the committee today 
to ask for help in expediting the necessary real estate plans related 
to the project.
    Presently, the future funding of lock and dam modernization for the 
nation could not be worse. Nearly $4.8 billion of lock and dam 
modernization projects on the Ohio River Navigation System alone has 
been authorized for construction by the Congress. About $800 million 
has already been invested in the region's waterways. It appears, 
however, that the Administration plans to spend no more than $100 
million annually for future lock and dam modernization. The nation 
presently requires a $250 million annual level of investment on our 
nation's inland navigation infrastructure. At the projected level 
presently about $1 billion will be spent on upgrading our nation's 
navigable waterways in the next decade, when the requirement will be 
$2.5 billion.
    Currently the Inland Waterways Trust Fund has a balance of $270 
million and is receiving about $130 million annually from a 20 cents 
per gallon tax on diesel fuel for towboats operating on America's 
inland navigation system. Monies in the Inland Waterways Trust Fund are 
used to fund 50 per cent of a lock and dam modernization project, to 
include major rehabilitation and replacement. So given the ``users 
taxes'' currently levied on towboat operators to fund half the cost of 
lock and dam modernization projects, the monies flowing into the Trust 
Fund are more than adequate to fund an annual program of improvements 
pegged at $250 million. Under proposed policies and the 
Administration's low priority to major infrastructure improvements on 
America's waterways, present balances in the Inland Waterways Trust 
Fund will continue to grow and be used in large measure to offset the 
nation's budget deficit.
    But the Congress can and should reverse the aforementioned 
scenario. An appropriate way to bring inland navigation construction 
out from behind the moon is to fund major components of projects 
already under construction and to provide new starts for construction 
projects already authorized. The value of these investments has already 
been proven.
    Finally, Mr. Chairman, I would like to conclude by restating the 
importance of the investments made on our nation's waterways, 
investments in people, investments in infrastructure, investments in 
America. The inland waterways are both a model and a methodology for 
what works. It has been this nation's investment in inland navigation 
that has allowed the interior regions to compete with other regions on 
a more level playing field. For instance, the coal in the West Virginia 
mountains has always been there. But without transportation this coal 
is valueless. Transportation to market gives value to coal, ores, and 
raw materials. The less that transport to market costs, the more value 
it adds--an vice-versa.
    Commerce, like water, flows along the lines of least resistance. 
Production and industry have gravitated to the areas and along the 
routes of lowest costs. The industrial and agricultural development 
that has occurred along the inland waterway system of interior America 
has benefited this Nation beyond measure.
    On behalf of the Board of Directors and members of DINAMO, we thank 
you for the opportunity to talk about the importance of expediting 
these urgently needed improvements.
                                 ______
                                 
 Prepared Statement of Penny Ryerson, Port Manager, Port of Toledo, OR
    The Port of Toledo was incorporated May 10, 1910. Toledo, Oregon is 
located six road miles east of Newport, Oregon and fourteen river miles 
up Yaquina River from Newport. Toledo is a timber dependant community 
and as a result of the downfall of the timber industry, is a depressed 
area.
    All ports are aware of the budgetary pressures under which the 
appropriations' subcommittee and your colleagues must operate in 
considering the spending need of the nation. Claims competing for a 
fair share of the fiscal year 1998 budget far exceeds what reasonably 
can be provided.
    Port, large or small, are a valuable asset to any community. They 
have the capability to diversify from water related projects, promote 
and develop new businesses to their communities. Also, they can 
contribute toward national and international trade.
    In addition, once the proposed projects are completed and ports 
become self-sufficient, ports would be in the position to help relieve 
the government from the continued request for funding.
    Ports are able to create jobs, enhance the economic base for their 
community, put displaced workers back into the work force with higher 
paying jobs and with health benefits. Also, they are instrumental in 
strengthening the family unit.
    Oregon ports have voiced concerns on the importance of maintenance 
dredging for Coastal ports as well as for the Columbia River. The Port 
of Toledo continues to support the federal operations and maintenance 
dredging program for Oregon Ports.
    A continued O & M program ensures further economic growth of the 
coastal communities. The port values the subcommittee's ongoing 
commitment to enhance local economies.
    Port manager Ryerson has been aware from her journey's to 
Washington, D.C. for the past two years that the Corp. Of Engineers 
have been talking about eliminating the shallow draft ports from the 
Corps. Dredging budget.
    The Port of Toledo comes before this subcommittee to request 
support for the continued maintenance dredging of shallow draft ports. 
Attached to this written statement are the home-based vessels that 
utilize the Port of Toledo facility to have much needed repairs and 
maintenance. This does not include the local fishermen that use the 
boat repair facility. These vessels generate approximately $15,000 or 
more per week per vessel in our small community. Having repairs done in 
our community by these vessels takes sometime three to four months. 
Each vessel that stays in our community for repairs generated 
approximately $60,000 per month to our community and surrounding 
communities.
    Toledo at one time had six mills. With the downsizing of the timber 
industry the community has only one mill which is Georgia Pacific. 
Without dredging our Yaquina River these vessels will be unable to use 
our repair facilities.
    Without Congressional support for continued maintenance dredging 
for shallow draft ports this community already depressed will be unable 
to move forward. Not counting the amount of people that will be out of 
work as the timber workers.
    The State of Oregon is trying to contend with funding for all 
ports, but is unable to accommodate all ports because of the passage of 
Measure 47. The larger ports being prioritized are Port of Portland, 
Port of Coos Bay and Port of Newport.
    The Port of Toledo receives its funding from the tax payers. We are 
trying hard to diversify to generate our own income. With a port budget 
of $197,010 it would be impossible for our port to do a cost sharing 
with the state for dredging.
    Shallow draft ports are aware of the importance of the deep draft 
ports, but feel that we are as important in our own small way for our 
community.
    I would like to thank the subcommittee for allowing me to address 
my concerns.
                                 ______
                                 
           Prepared Statement of the Lake Superior Authority
    Testimony to the Energy and Water subcommittee in support of an 
appropriation for $9 million ($4.5 million per year over two years) for 
Lake Superior Center.
    The Water Resources Development Act, passed by Congress in 1996, 
authorizes the U.S. Army Corps of Engineers to assist in the 
construction of Lake Superior Center--A Center for freshwater education 
and a forum for scientific communication and cooperation to impact 
future treatment of all freshwater bodies.
    The focus of Lake Superior Center is to increase the awareness of 
the public to one of our nation's truly great natural treasures--the 
Great Lakes. The Center will play an important role in our state, 
region and nation in several ways: as the world's only facility 
dedicated to showcasing our nation's freshwater resources; in educating 
the public, policy-makers, researchers, and students on their use and 
preservation; and, in ensuring these resources are available for future 
generations. It will integrate freshwater science, economics, and 
social education to provide as total an understanding as is possible 
about the functions and factors affecting the future of America's most 
precious resource. There is no other facility in the country 
duplicating this goal.
    There are only three places in the world with major concentrations 
of the earth's available freshwater resources, the United States Great 
Lakes, Lake Baikal, and the African rift lakes. The Great Lakes contain 
approximately 20 percent of these resources (one-half are located in 
Lake Superior alone). Because they are in the U.S., the Great Lakes 
with their large volume of freshwater provides an opportunity that 
others cannot for study, protection, and understanding of the systems 
and processes that affect these resources and the necessary stewardship 
they require.
    The health of our nation's freshwater resources are a matter of 
national importance. A ready supply of clean drinking water is 
necessary to our survival. It is important that we take care to keep 
water a renewable resource to the extent that drinkable, usable water 
does not become a scarce commodity. Of all the water on the planet only 
2.8 percent of the earth's water is freshwater. We can ill afford to 
have our freshwater become a scarce commodity.
    The American public ranks water quality as their number one 
environmental concern. Nearly 40 million people live in the Great Lakes 
region. The commerce, economics, public health and recreation in these 
cities, towns, and rural areas are dependent on this great inland 
freshwater system. 73 percent of the nation's steel is produced in the 
Great Lakes basin. Grain, iron ore and other commodities are 
transported to nearly every state in the nation via the nation's 
largest freshwater port in Duluth, Minnesota. Great Lakes carriers 
deliver the coal that powers most of Minnesota, Wisconsin, Michigan and 
other Great Lakes states. Many U.S. communities rely on water directly 
from the Great Lakes for their agricultural and manufacturing 
processes.
    Surface water is a finite resource, continually cycling through the 
processes of precipitation, transportation, storage, and evaporation.
    The same water we use today has been used by others for centuries. 
While filtration can aid in maintaining clean water, it cannot remove 
all contaminates.
    In some cases, such as with Lake Erie, the systems retention rate 
is approximately 3 years. In the case of Lake Superior, located 
upstream of the entire Great Lakes chain, it is over 200 years. The 
results of a contaminated Lake Superior would be devastating. Where 
contamination has previously occurred in our freshwater systems, 
Congress is forced to react to these problems at great costs. 
Oftentimes, the result is additional federal regulation and mitigation.
    Regulation and enforcement agency leaders realize that an informed 
public can be helpful to their mandate to develop and implement 
policies to protect natural resources and likewise, business leaders 
realize that promoting voluntary protection results in decreased costly 
regulations. With so much dependence on this highly concentrated, 
finite resource, we need a Center capable of educating the public and 
students of all ages about the ongoing stewardship of these resources. 
Lake Superior Center will stand as a national beacon for the protection 
of freshwater resources for future generations. It will provide the 
vehicle by which private citizens, businesses, scientists, students, 
and environmentalists can come together and become the caretakers for 
this resource and will serve as an intermediary to translate basic 
scientific research to the public.
    Lake Superior Center offers the preventative medicine rather than 
the surgical solution. The ultimate result will be a reduction of 
costly environmental mitigation and a reduction in the need for 
restrictive legislation that encumbers expensive monitoring and 
enforcement components.
    Concern over availability of freshwater resources continues to rise 
across the U.S. Last March, in the agricultural communities in our 
western states the nation's largest water agency began trading water 
rights electronically--creating the first true market for the buying 
and selling of freshwater in Central Valley, California. Understanding 
basic water processes are paramount to dealing with issues of scarcity, 
contamination, flowage and proper management.
    Lake Superior Center will provide the scientific education needed 
for our nation's youth and public to have a positive impact on these 
resources and the knowledge base to promote the development of 
sustainable uses and business practices. Currently, over 150 citizens 
from Minnesota, Wisconsin, Michigan, and Ontario participate in Lake 
Superior Center's voluntary stewardship program monitoring water 
clarity.
    The lack of scientific education opportunities for our nation's 
youth provides even more reason for an institution such as Lake 
Superior Center. The Center augments the public school system as a 
place where students can learn from hands on lab work and field study 
programs. In addition to providing programming concerning the science 
of freshwater, the Center will also focus on the physical and human 
geography of the Great Lakes.
    Already educators from around the Great Lakes have designated Lake 
Superior Center the official clearinghouse and regional subcenter for 
freshwater education. The Center is able to bring an important 
educational component to schools and communities around the Great Lakes 
through a number of vehicles developed by trained educators and staff. 
As an informational clearinghouse, students will learn from renowned 
scientists associated with organizations engaged in the study of 
freshwater. The Center currently offers K-12 education programs, 
lectures, colloquiums and seminars, teacher training, and has produced 
the first-of-its-kind lesson and resource guidebook for K-12 teachers 
throughout the Lake Superior region. Broadcast capability from the 
Center will allow an even greater number of people ready access to the 
in-house programs and information.
    Lake Superior Center will provide the final link in the chain to 
maximize federal investment currently existing in the area by providing 
the place for scientists and organizations to interpret their research 
information to the general public and students. Some examples of these 
federal investments include: the nation's only Freshwater Quality EPA 
Laboratory (located on Lake Superior), the Sea Grant programs of 
Minnesota, Wisconsin, and Michigan, the National Parks of Pictured 
Rocks, Apostle Islands and Isle Royale, The Great Lakes Indian 
Fisheries Commission, and programs of the U.S. Fish and Wildlife 
Service, the National Oceanographic and Atmospheric Administration, the 
National Forest Service and the Army Corps of Engineers. All are 
current or potential partners with Lake Superior Center.
    Researchers increasingly stress the importance of this technology 
transfer to the general public so that the knowledge gained in 
laboratory and in the field can provide a basis for critical thinking 
and improved decision-making. Lake Superior Center provides for the 
interpretation of the highly technical work produced by those agencies 
in an understandable form. The Center's people friendly and engaging 
programs will attract a broad audience and bring an opportunity for 
national attention to focus on the positive work the government 
agencies focusing on freshwater issues.
Funding Request
    Lake Superior Center was incorporated in 1989 as a 501(c)3 not-for-
profit entity. In 1990, the State of Minnesota established the Lake 
Superior Authority to develop, own, operate (through mutual agreement 
with the not-for-profit entity), and maintain the Lake Superior Center. 
The Lake Superior Center Authority is a five-member body appointed by 
the Governor of Minnesota. It has a $16 million appropriation from the 
Minnesota legislature, which is contingent on private match and on 
being recognized for its national significance and contribution by a 
financial commitment from the federal government.
    Lake Superior Center needs to complete construction of its 62,000 
sq. ft. facility by 1999. Timing for the project is critical to lever 
commitments from the State of Minnesota, City of Duluth and private 
individuals, and to complete the project within its $33.8 million 
budget.
    When the Center originally approached the federal government for 
funding seven years ago (in 1990), members of Congress requested the 
Center develop public and private matching sources.
    The Center is proud to report that it has now raised over 70 
percent of the $33.8 million goal from the State of Minnesota, the 
community in which it is located, and private sources. We now ask the 
federal government to provide the final $9 million needed to complete 
the project. These funds would cap the government commitment to the 
project. Once completed, the Center will be self-supporting and will 
not require ongoing operating funds from Congress or the Corps of 
Engineers.
    The Center is requesting this one-time investment to release the 
following commitments:

                        [In millions of dollars]

State of Minnesota................................................    16
City of Duluth....................................................     5
Private funding sources \1\.......................................   3.8
                        -----------------------------------------------------------------
                        ________________________________________________
      Total.......................................................  24.8

\1\ $3.7 pledged-to-date; $100,000 anticipated by end of Congress. 
(Additional private support for the Center has been raised for 
operations and programs totally $2,500,000 from 1990 to present not 
included in the $33.8 million project total bringing total private 
investment in the Center to date to $6.2 million.)

    The Center has received broad support from private business, 
individual donors, and community and private foundations at various 
gift levels from major gifts to memberships. Private contributors 
include: First Bank System, John S. and James L. Knight Foundation, 
Burlington Northern Santa Fe, the USS Great Lakes Fleet, Lakehead 
Pipeline, Merrill Lynch, Minnesota Power, the Blandin Foundation, 
Northwest Area Foundation, Norwest Bank, Piper Jaffray Inc., 
Environment Canada, National Environmental Education and Training 
Foundation, I Hubbard Foundation, Minnesota Education Association, and 
many others.
    The timing is critical. The Center must break ground as soon as 
possible to meet its completion date of June, 1999, and ensure the 
timely release of state funds and private pledge payments. A positive 
response from Congress at this time will not only leverage its current 
investment in programs and agencies located on the Great Lakes but will 
lever matching funds of over $24 million. The final funding 
distribution for the $33.8 million will be: 47 percent state, 15 
percent city, 11 percent private, and 27 percent federal.
International Connections
    Lake Superior Center will be an important link internationally to 
other bodies of freshwater and illuminates the value of the United 
States as they relate to these worldwide resources. Since its inception 
Lake Superior Center has been working with Canadian organizations and 
agencies to bring about mutual partnerships. Such as joint programming 
with Environment Canada and the International Joint Commission. Teacher 
training and in-school programs have been presented in Canadian schools 
and volunteers from Canada participate in the Center's water quality 
monitoring activities.
    The Center has initiated other international connections in Russia. 
Lake Baikal, located in eastern Siberia, is the largest freshwater lake 
by volume and depth. Lake Superior is the largest freshwater lake by 
surface area.
    The vastly different physical configurations' historical 
development and political systems give rise to fascinating contrasts 
that provide additional study opportunities toward the understanding 
Lake Baikal and the Great Lakes.
    Our scientific community has long-term associations with the 
Russians that are being elevated in importance and our foundation 
community is now demonstrating interest. Russian leaders at various 
levels firmly believe in the power of public awareness in shaping their 
new nation. Lake Superior Center has already been helpful in connecting 
Russian leaders with their counterparts in the U.S. and in Canada to 
address topics such as models for management of a watershed that 
contain many governmental units; creation and management of national 
parks; and tourism and recreational uses that preserve the integrity of 
the resource. We look forward to continuing involvement, helping where 
we can within our capacity.
    A future opportunity awaits us with the great rift lakes of Africa. 
They are a major part of the surface freshwater story of earth with 
large freshwater resources concentrated in a compact region of eight 
lakes. A new University of Minnesota initiative, the Large Lakes 
Observatory headed by Dr. Tom Johnson will bring new levels of research 
capacity to these and other large lakes. Dr. Johnson has extensive 
knowledge of the African lakes, and as Lake Superior Center board 
member is ideally suited to help develop these international 
connections with African Rift Lakes research. Eventually the Center 
plans to be a connecting point for scientists and engineers from around 
the world coming to workshops and seminars showcasing the national 
vision and commitment to the preservation of Earth's most precious 
natural resource.
Summation
    The worlds only Center focusing on awareness and understanding of 
our valuable freshwater resources will be an important resource for 
future generations and will ultimately reduce the cost of federal 
mitigation and regulation.
    The timing is now--all of the pieces are in place and ready to go--
it is a one-time investment without ongoing fiscal commitments.
    Lake Superior Center has developed the partners, raised the money, 
and begun implementing important education programs. Now it just 
requires a portion the federal appropriation of which we are 
authorized, to complete it.
    Everyone benefits: educators, students, business, conservationists, 
researchers, and the general public.
    It is rare that one organization is able to bring these diverse 
groups together under one banner.
    Lake Superior Center offers the federal government an opportunity 
to help the nation better understand freshwater. What better time than 
now? What better place than at the headwaters of the Great Lakes 
system?
    Thank you for considering this important investment in our nation's 
future.
                                 ______
                                 

         PACIFIC NORTHWEST WATER RESOURCE DEVELOPMENT PROJECTS

Prepared Statement of John Etchart, Chairman, Northwest Power Planning 
                                Council
    Mr. Chairman and members of the subcommittee, my name is John 
Etchart, and I am chairman of the Northwest Power Planning Council. I 
appreciate the opportunity to submit written testimony in support of 
the Clinton Administration's fiscal year 1998 budget request for 
several programs under the jurisdiction of the Energy and Water 
Development Subcommittee. The Council was established by Congress in 
1980, and created as an interstate compact by the states of Idaho, 
Montana, Oregon and Washington. Its purpose is to develop a 20-year 
regional electric power plan to ensure for the Pacific Northwest an 
adequate supply of power at the lowest possible cost. The plan is 
designed to ensure that the region only acquires resources it needs and 
that it acquires the lowest-cost resources first. The Council also was 
directed to develop a major program to rebuild fish and wildlife 
resources that have been harmed by hydroelectric development in the 
Columbia River Basin. The Council carries out its responsibilities 
under the Pacific Northwest Electric Power Planning and Conservation 
Act of 1980 (Northwest Power Act), Public Law 96-501.
    Congress recognized in the Northwest Power Act that the resources 
of the Columbia River Basin are important to the region and the nation. 
Both the Council's power plan and its fish and wildlife program were 
developed under the mandates of the Act, in which Congress provided 
direction and the framework for the Council as a policy and planning 
body. Three federal agencies under the jurisdiction of the 
Subcommittee, the U.S. Army Corps of Engineers, the Bureau of 
Reclamation, and the Bonneville Power Administration, all administer 
programs that are critical to the Columbia River Basin. The Council 
works closely with all three agencies in fulfilling its statutory 
responsibilities to develop its regional power plan and implement its 
Columbia River Basin Fish and Wildlife Program. The relationship among 
the Council and the agencies is unique and reflects Congress' desire to 
provide an effective management structure for the resources in the 
basin. Through this arrangement, the federal agencies and the four 
Northwest states share funding, implementation and regulatory 
responsibilities in the management of the basin's power and fish and 
wildlife resources.
    Because of these shared and sometimes overlapping responsibilities, 
the Council has a continuing interest in the budgets of the three 
federal agencies. The Council's fish and wildlife program is funded by 
a combination of revenues from electricity sales and federal 
appropriations. While a significant portion of the fish and wildlife 
program is funded by Bonneville, the other federal agencies also are 
requesting to commit appropriated funds well in excess of $150 million 
in the basin in fiscal year 1998. A large portion of these funds, 
especially those appropriated to the Corps and Bureau of Reclamation 
for construction, operations and maintenance, will be repaid by the 
region's electric ratepayers through Bonneville.
Electricity Restructuring and the Fourth Northwest Conservation and 
        Electric Power Plan
    In accordance with the Northwest Power Act, the Council is in the 
process of reviewing and updating its power plan. The Northwest Power 
Act requires the Council to review the power plan at least every five 
years. The purpose of the plan, as required by the Northwest Power Act, 
is to assure the region of an adequate, efficient, economical and 
reliable power supply. Historically, the plan has incorporated a broad 
and detailed review of electrical resources that balance sometimes 
competing attributes. Actions derived from this careful review have 
charted the least expensive (both in economic and environmental terms), 
yet most flexible course the region can take down the uncertain path of 
resource acquisition to meet demand for electricity in the future. The 
fast-approaching changes in the electricity industry require the 
Council to take a new approach in the development of its latest power 
plan.
    The draft version of the Council's most recent, and fourth, power 
plan was adopted by the Council on March 13, 1996, and was made 
available to the public for review and comment. Because of the 
Comprehensive Review of the Northwest Energy System, initiated by our 
four governors in January 1996, the draft contains few recommended 
actions or policy decisions. It is instead a reference tool, containing 
background on the industry and its current restructuring, as well as 
analysis of some of the major issues that must be addressed as the 
Northwest advances toward its new energy future. Because of the need to 
be consistent with the recommendations of the Comprehensive Review, 
progress in completing the new plan was delayed for several months 
while the Review's steering committee completed its work. A revised 
draft plan, incorporating elements from the final report of the 
Comprehensive Review, will be released for another round of public 
comment this spring before the final plan is adopted this summer.
Columbia River Basin Fish and Wildlife Program
    The Council's fish and wildlife program complements its power plan 
and is designed to protect, mitigate and enhance fish and wildlife, and 
related spawning and rearing grounds of the Columbia River Basin that 
have been adversely affected by the construction and operation of 
hydropower facilities. Unlike the National Marine Fisheries Service, 
which has specific statutory authority to recover Endangered Species 
Act-listed salmon runs in the Snake River, the Council's focus is much 
broader. The Council's mandate under the Northwest Power Act is to 
protect, mitigate and enhance all populations of fish and wildlife that 
are affected by the operation of hydroelectric facilities in the 
Columbia River Basin.
    The Council last amended the program in December 1994. As required 
by the Northwest Power Act, measures in our program are based on the 
best available scientific knowledge and were developed with broad 
public involvement.
    Currently, the Council is considering amending its fish and 
wildlife program. One primary impetus for this is a scientific report 
on the program that was released last year. In March 1995, the Council 
asked the Independent Scientific Group (recently reconfigured and 
renamed the Independent Scientific Advisory Board) to review the 
science underlying the Columbia River Basin Fish and Wildlife Program 
and to propose a conceptual foundation for that program. The scientists 
spent more than a year and analyzed more than 4,000 pieces of 
literature before drawing the conclusions contained in the 
prepublication report that was issued last September. The report 
describes an approach to fish recovery that would emphasize the 
ecosystem inhabited by the fish at every stage in their life cycles. 
This approach, deemed ``the normative ecosystem,'' would shift recovery 
efforts toward restoring the kind of conditions that nurture salmon and 
steelhead and other fish and wildlife in less-developed habitat. At the 
same time, the report acknowledges that development has occurred and 
will continue, and fish and wildlife recovery measures will require 
policy calls on the trade-offs among ecological needs and the cultural 
and economic needs of society. The report stresses the importance of a 
continuum of habitats from freshwater streams, through the estuary and 
out into the ocean. It also suggests that core populations of salmon in 
particularly healthy habitat, such as the Hanford Reach in Washington 
state, can be used to recolonize adjacent habitat areas where salmon 
are in decline. The report is out for public comment, after which it 
will be finalized by its authors.
    Concurrent with the public review of the Independent Scientific 
Group's report, the Council is preparing a draft paper that will 
explore questions about the framework and conceptual foundation of the 
Council's fish and wildlife program. Finalizing the scientists' review 
and developing a framework will help prepare the way for the formal 
amendment process, which may begin later in the year.
    The Northwest Power Act imposed responsibilities on federal river, 
land and power agencies to act in a manner consistent with the 
Council's power plan and fish and wildlife program or to consider the 
plan and program in their decision-making ``to the fullest extent 
practicable.'' The ability of federal agencies to meet their objectives 
under the Act is tied directly to their funding levels and budget 
priorities.
                      u.s. army corps of engineers
    The Council continues to support the Corps' Columbia River Fish 
Mitigation Program. The primary focus of the program is to reduce the 
mortality of juvenile salmon and steelhead as they migrate down the 
Snake and Columbia rivers to the ocean from their spawning grounds. 
While significant sums of money have been appropriated for the program 
over the past decade, and many improvements have been made, much work 
still remains. The Corps' fiscal year 1998 budget proposal for the 
program is $127 million, and includes funding for several critical 
studies and activities that are crucial to recovering, rebuilding and 
maintaining the anadromous fish runs in the Columbia River Basin. The 
budget includes adequate funding for continued testing and installation 
of new or improved juvenile bypass and related transportation 
facilities at the mainstem dams: Lower Granite, Little Goose, Lower 
Monumental and Ice Harbor dams on the Snake River, and McNary, John 
Day, The Dalles and Bonneville dams on the Columbia. The Council 
supports the Corps' full budget request of $127 million.
Juvenile Fish Passage Improvements
    In 1987, the Council helped develop a consensus among private and 
public utility interests, Indian tribes, fish and wildlife interests 
and the Bonneville Power Administration on the need for expedited 
completion of new and improved fish bypass facilities at all the 
mainstem dams. This regional consensus resulted in an original schedule 
for completing these facilities by 1994. Unfortunately, several 
unforeseen factors have made the original schedule impossible to keep. 
Escalating costs and unexpected, dramatic declines in the population of 
several of the basin's anadromous fish runs have contributed to a 
longer implementation schedule for the program. This has led to new 
demands on the Corps to develop, test and install facilities not 
envisioned initially, such as extended-length bypass screens, surface 
bypass facilities, structural improvements in the projects to reduce 
dissolved gas levels when water is spilled at the projects to assist 
the migrating fish, and installation of passive integrated transponder 
(PIT) tag detectors (electronic devices being installed at some 
hydroelectric projects that can identify tiny electronic transmitters 
implanted in the bodies of some of the passing salmon).
    The Corps is requesting a total of $58.641 million in fiscal year 
1998 for juvenile fish passage improvements. This includes $7.85 
million for the completion, maintenance and improvements to extended-
length screen bypass systems at Lower Granite, Little Goose and McNary 
dams. In addition, it includes $10.2 million to complete engineering 
design and begin construction of extended-length screens at John Day 
Dam. The Corps also is requesting $24.39 million for work at Bonneville 
pertaining to the relocation of the juvenile outfall facility and a PIT 
tag detector. In addition, the Council supports the Corps' request for 
$2.1 million for completing work on the John Day PIT tag detector 
facility. The Council believes that making the federal projects safer 
for juvenile and adult migrating continues to be of the highest 
priority, and encourages the Subcommittee to continue funding the 
program at the highest possible level to ensure the planned facilities 
are in place at the earliest possible date.
Surface Bypass Facilities
    The Council supports continued testing, and if beneficial, the 
development and installation of surface bypass facilities at the 
mainstem hydroelectric dams. These new systems direct juvenile fish 
over spillways and may help salmon pass the dams more quickly and avoid 
the pressure changes that occur when the salmon go through conventional 
bypass systems. The Corps has included $36.43 million in the fiscal 
year 1998 budget to design, test and develop surface collection and 
bypass systems at Lower Granite, The Dalles, John Day and Bonneville 
dams. The Council supports moving forward at these projects, as 
proposed by the Corps, and believes that surface collection facilities 
may offer a more efficient solution to passage difficulties at the 
dams.
Dissolved Gas Abatement During Spill
    The Council continues its support of the development of a full-
scale program to ensure that spill is carefully monitored and its 
effects on dissolved gas levels and fish health are evaluated fully. It 
is essential that dissolved gas abatement technologies, such as 
spillway flip lips, be installed expeditiously so that intentional and 
unintentional spills do not produce excessive dissolved gas levels. 
These structural improvements also will help keep the gas levels within 
prevailing state limits. The Council is pleased that the Corps is 
budgeting $10.3 million for gas abatement studies and $8.97 million for 
the installation of spillway flip lips at Ice Harbor and John Day dams 
in fiscal year 1998. The timely installation of gas abatement 
facilities and the implementation of a comprehensive, science-based 
monitoring program may help alleviate much of the uncertainty currently 
surrounding the spill program.
John Day, McNary and Lower Snake River Drawdown Studies
    For fiscal year 1998, the Corps is requesting $4.1 million and $3.2 
million, respectively, for reservoir drawdown studies on the Lower 
Snake River and at John Day Dam. The funds requested for the Lower 
Snake River will be used to gather additional biological information 
and to continue detailed engineering and economic studies on natural 
river drawdown alternatives. The activities associated with the John 
Day study likely will include scoping work and biological studies, 
although the actual scope, schedule and cost estimate for the study 
have not been determined. The Council is aware of a considerable amount 
of controversy surrounding these proposed activities, especially with 
regard to the John Day study. The Council believes, however, that it is 
in the public's best interest to proceed with some specific studies so 
that valuable scientific and economic information particularly 
regarding the regional regional effects on fish and wildlife, 
agriculture, local commerce, community stability, irrigation, 
navigation, and system reliability can be compiled. This will provide a 
more sound basis for future decisions on whether to proceed with 
reservoir drawdowns.
    With regard to the John Day project, the Council specifically 
recommends that the Corps focus on the effects of drawdowns deeper than 
minimum operating pool. According to a letter from Will Stelle, 
Regional Director of the National Marine Fisheries Service, to the 
Corps of Engineers dated December 23, 1996, recent science points to 
deeper drawdown of John Day as having potentially far greater benefits 
to anadromous fish, and considers drawdown of John Day to minimum 
operating pool to provide little or marginal benefits. In light of the 
Corps' having completed a reconnaissance level study on the drawdown of 
the John Day reservoir to minimum operating pool (Appendix B to the 
System Configuration Study, Phase I, April 1994), the Council 
recommends that no additional funding be allocated for further review 
of this alternative. The Council's current fish and wildlife program, 
as well as the NMFS Biological Opinion, both call for drawdown of John 
Day to minimum operating pool after mitigation for the impacts is in 
place. NMFS has moved away from the minimum operating pool alternative 
already; the Council may consider amending its program on this point 
during its next fish and wildlife program amendment process.
    The Council also recommends that a portion of the money requested 
by the Corps for John Day drawdown studies be used to investigate the 
feasibility of modestly lowering the reservoir behind McNary Dam. 
Insufficient information exists to determine whether the benefits for 
salmon from a minimal pool lowering at McNary Dam, which could increase 
spawning habitat upriver in the Hanford Reach, would be more or less 
than from a deeper drawdown at John Day. Accordingly, the Council 
believes that both should be examined by the Corps.
                         bureau of reclamation
    The Council continues its support of the Umatilla Basin Project in 
Oregon. This is a water exchange project whereby water is pumped from 
the Columbia River to supply irrigation districts, which then leave 
water in the Umatilla River to help rebuild salmon populations. The 
Bureau has included $9.254 million in its fiscal year 1998 budget for 
continued construction of phase II of the project.
    The Bureau is proposing to spend $8.76 million in fiscal year 1998 
on the Yakima River Basin Water Enhancement Project. The Council also 
supports this project, which will employ structural and non-structural 
water conservation measures to increase the reliability of the 
irrigation supply and enhance streamflows in the Yakima River. In 
addition, tribal water supply facilities will be improved and tribal 
economic development, fish and wildlife, and cultural programs will be 
enhanced.
    The Council also supports the Columbia and Snake River Salmon 
Recovery Project, which the Bureau is proposing to fund at $13.062 
million for fiscal year 1998. The majority of the funds will be used 
for water conservation and water acquisition (in accordance with state 
water law) projects in the Columbia and Snake river basins
                    bonneville power administration
    The Bonneville Power Administration provides electric power (about 
half of the power consumed in the Pacific Northwest), transmission 
(about 80 percent of the region's high voltage capacity), and energy 
services throughout the Pacific Northwest, a 300,000 square mile 
service area. Bonneville markets the power produced at 30 federal 
hydroelectric dams in the region, which are operated by the Army Corps 
of Engineers and the Bureau of Reclamation, and acquires non-federal 
power and electric energy conservation resources to meet the needs of 
its customer utilities. Bonneville receives no annual appropriations 
from Congress, funding the expense portions of its budget and repaying 
the federal investment in the Federal Columbia River Power System with 
revenues from electricity sales. During fiscal year 1998, Bonneville 
plans to pay the Treasury its total annual scheduled payment, which is 
estimated to be $805 million.
    Bonneville is the primary implementor of the Council's power plan 
and fish and wildlife program. The budget proposed by Bonneville for 
fiscal year 1998, which includes operating expenses, capital 
investments and capital transfers, totals $3.467 billion. This is 
nearly identical with Bonneville's revised estimate of its fiscal year 
1997 budget, and is consistent with its 1996 Final Rate Proposal.
Fish and Wildlife
    In the fall of 1995, the Administration and Congress agreed on a 
fixed budget for Bonneville's fish and wildlife recovery efforts in the 
Columbia River Basin. Under the terms of that agreement, which was 
further defined and formalized last September in a memorandum of 
agreement signed by the secretaries of the Army, the Interior, Commerce 
and Energy, Bonneville will incur costs, on average, of $435 million 
per year for five years on fish and wildlife activities. These funds 
fall under a number of different categories, including direct 
expenditures on fish and wildlife projects, power purchases, 
reimbursements of appropriated funds to the Corps of Engineers and the 
Bureau of Reclamation, capital repayment and foregone revenues. For 
fiscal year 1998, Bonneville estimates that its total fish and wildlife 
budget will be $421.1 million.
    Under the agreement, the portion of the budget related to direct 
expenditures, reimbursements and repayments is set at $252 million per 
year. The hydropower portion, however, will vary from year to year 
depending on winter precipitation. Based on historic water records, the 
value of lost hydropower in an average year will be about $183 million, 
bringing the total to $435 million. This is about 12.5 percent of its 
total fiscal year 1998 budget of $3.467 billion. For fiscal year 1996, 
Bonneville reported total fish and wildlife program costs of $215.5 
million, a significant reduction from the expected average of $435 
million. This is largely due to the fact that costs attributed to lost 
hydropower (foregone revenues and power purchases) totaled only $40 
million due to a higher than average snowpack in the basin.
    In the Energy and Water Development Appropriations Act for fiscal 
year 1997, the Committee added a new section, (4)(h)(10)(D), to the 
Northwest Power Act, which requires the Council to appoint an 11-member 
Independent Scientific Review Panel to review fish and wildlife 
projects proposed to be funded through Bonneville's direct program. For 
fiscal year 1998, Bonneville expects to spend $127 million on this part 
of its program.
    Relying on recommendations from the National Research Council, the 
Power Planning Council appointed 11 scientists to the Independent 
Scientific Review Panel earlier this calendar year. Also in accordance 
with the Act, the Council is establishing scientific peer review groups 
that will assist the Panel in its review process. The peer review 
groups and the scientific panel will review proposed projects and make 
recommendations to the Council no later than June 15 of each year. 
Recommendations are to be based on a determination that projects are 
based on sound scientific principles, benefit fish and wildlife, and 
have clearly defined objectives and outcomes with provisions for 
monitoring and evaluation of results. The Council must make the 
scientific panel's recommendations available to the public for review 
and comment, and also must consider the impact of ocean conditions and 
determine whether the projects employ cost-effective measures, before 
making its final recommendations to Bonneville for project funding. The 
Council is aiming to adopt its final recommendations for Bonneville in 
late August.
    The Council takes seriously the Committee's concern that fish and 
wildlife funds be spent judiciously. Consequently, we are working with 
Bonneville and the region's fish and wildlife managers to implement the 
requirements of section (4)(h)(10)(D), which will help ensure that 
Bonneville's ratepayers' funds are spent on projects that have the 
greatest value in recovering and providing mitigation for the Columbia 
River Basin's fish and wildlife populations.
    Mr. Chairman, thank you for this opportunity to share our views 
with you. We sincerely appreciate the thorough consideration that this 
subcommittee has given to the needs of the Pacific Northwest over the 
years.
                                 ______
                                 
 Prepared Statement of the Columbia River Inter-Tribal Fish Commission
    Thank you for the opportunity to submit written testimony on behalf 
of the members of this Commission regarding the fiscal year 1998 budget 
of the Army Corps of Engineers (Corps) for the Columbia River Fish 
Mitigation Project (Project), a series of separate construction 
activities at the Federal Columbia River Power System (FCRPS). Under 
the umbrella of the President's Budget, the Corps has proposed spending 
$127 million on the Project in fiscal year 1998, ostensibly to meet 
their treaty and statutory obligations to protect and restore naturally 
spawning salmon populations in the Columbia River Basin. The tribes 
support a funding level of $123 million for fiscal year 1998, but with 
significant differences as to which projects should be funded. The 
tribes have prioritized spending for fiscal year 1998 as follows: $37.5 
million for Snake River and John Day drawdown; $12 million for surface 
flow bypass measures at Bonneville and John Day Dams; $29 million on 
necessary adult passage measures (including temperature control); $18 
million for stilling basins as a dissolved gas abatement measure; and 
$26.5 million for fliplips, optimization of turbine efficiencies, other 
surface flow bypass measures, and spill efficiency monitoring. These 
actions are geared towards meeting the tribal objectives of achieving 
80 percent juvenile fish passage efficiency, 95 percent juvenile 
survival per project, and a 50 percent reduction in adult mortality by 
2001. It is the tribes intention that, consistent with the Memorandum 
of Agreement (MOA) completed by several Cabinet members last year (with 
Congressional encouragement and support), a regional consensus should 
form the basis for funding the Corps Project for fiscal year 1998. 
Lacking such consensus, Congress should not fund proposed activities 
that run counter to tribal goals and objectives.
Commission Mission Statement
    The Columbia River Inter-Tribal Fish Commission (CRITFC) was formed 
by resolution of the Nez Perce, Umatilla, Warm Springs and Yakama 
Tribes for the purpose of coordinating fishery management policy and 
providing technical expertise essential for the protection of the 
tribes' treaty-protected fish resources. The CRITFC's primary mission 
is to provide coordination and technical assistance to the member 
tribes to ensure that outstanding treaty fishing rights issues are 
resolved in a way that guarantees the continuation and restoration of 
our tribal fisheries into perpetuity. The tribes' Wy-Kan-Ish-Mi Wa-
Kish-Wit (Spirit of the Salmon), is a framework plan for Columbia Basin 
salmon restoration that documents threats to fisheries, identifies 
hypotheses based upon adaptive management principles for addressing 
these threats, and provides specific recommendations and practices that 
must be adopted by natural resource managers to meet their treaty 
obligations and restore the resource. The tribes' plan, which is in 
many respects similar to plans developed by the Northwest Power 
Planning Council (NPPC) and the National Marine Fisheries Service 
(NMFS), calls for significantly increasing the survival of salmon 
during their juvenile and adult migrations through the basin's 
hydroelectric system (FCRPS). The tribes' ultimate goal is to restore a 
sustainable fishery resource for the benefit of all peoples in the 
Pacific Northwest and Alaska.
Corps Project Budget Proposal Undermines Long Term Goals and Objectives
    The Corps' fiscal year 1998 capital construction budget prioritizes 
projects on a path that runs counter to undertaking critical projects 
that are necessary to meet recovery goals and performance standards. 
The Corps' construction program also risks wasted investments by 
investing in projects that are inconsistent with ecological and 
scientific principles and will not be functional under drawdowns. 
Initiation in fiscal year 1998 of several large projects, such as the 
Bonneville outfall for the screened bypass system, will set the region 
in the direction of more screen systems at the same time that more and 
more serious questions continue to arise about these technologies. If 
these fiscal year 1998 projects are funded, it will be very difficult 
to reclaim the tribal direction, and the path recommended in the 
Independent Scientific Group's report (``Return to the River''), and 
plan for expenditure of the remaining capital construction funds under 
the MOA.
    The capital construction costs of projects under the federal fiscal 
year 1998 budget and future operation and maintenance appropriations to 
support these projects will be borne by the tribes, the Pacific 
Northwest and Alaska for many years to come, both in terms of increased 
impacts to the salmon resource and fisheries and in terms of lost 
opportunities to fund tribally supported projects such as drawdown, 
spill efficiency improvements, and adult salmon passage measures. Also, 
the inappropriate commitment of scarce capital will ultimately impact 
funding available for watershed restoration measures, tribal hatcheries 
and on-reservation salmon and resident fish enhancement programs. The 
fiscal year 1998 Corps' capital construction budget (and the remainder 
of capital construction budgets through the end of the Memorandum of 
Agreement (MOA)) should ascribe to the following tribal priorities:
  --The tribal objective is to meet juvenile passage performance 
        standards of 80 percent fish passage efficiency and 95 percent 
        survival per project by 2001 and to reduce adult salmon delays 
        and interdam mortality by 50 percent by 2001. The Corps plan 
        does not commit to these performance standards.
  --The tribal approach calls for about $350 million over the term of 
        the MOA to implement Snake River and John Day drawdown; the 
        Corps approach calls for about $362 million to be allocated to 
        screened bypass systems and transportation.
  --The tribal approach emphasizes adult passage, spill efficiency and 
        meeting dissolved gas and temperature water quality standards. 
        The Corps fails to allocate funds to these critical mainstem 
        passage measures.
Capital Construction Priorities: 1997 through 2001
    The tribal approach is founded on hydrosystem objectives and 
measures in the Spirit of the Salmon and is consistent with the 
ecological and scientific principles expressed in the Independent 
Scientific Group's Return to the River. The tribal plan prioritizes 
funds to (1) drawdowns, (2) actions to meet water quality standards, 
(3) measures to increase spill efficiency and surface bypass at lower 
Columbia dams, and (4) measures to assure juvenile and adult passage 
performance standards are met. Conversely, the Corps has prioritized 
development of more screen bypass systems and transportation, 
prioritized additional development of bypass systems at the lower Snake 
River dams and placed little emphasis on adult passage or water quality 
improvements.
    The Commission's member tribes are seriously concerned that the 
federal approach will, in effect, ``gold plate'' the lower Snake River 
dams, resulting in wasted investment and less incentive to implement 
recommended drawdowns at these projects. The Tribes are also concerned 
that the Corps approach at the lower Columbia River dams, which focuses 
almost entirely on more screen bypass development, will preclude 
development of spill bypass and adult passage improvements that are 
necessary to reach the tribal plan performance standards and 
restoration goals by 2001. The Corps has not committed to any 
performance goals that their capital construction priorities are 
intended to meet. At stake is the wise use of about $600 million in 
federal expenditures toward recovery of Columbia River salmon.
    The tribal plan calls for major expenditures to realize drawdown of 
three of the Lower Snake dams to natural river levels by 2001. Other 
areas of tribal priority include emphasis on dam structures to improve 
water quality conditions, such as raised stilling basins to control 
dissolved gas, and significant adult fishway improvements. The tribal 
plan also calls for emphasis on increasing spill efficiency and turbine 
efficiency to reduce salmon mortality.
Specific Project Concerns with the Corps fiscal year 1998 Capital 
        Construction Budget
    Three major items in that budget are representative of seriously 
misplaced capital construction priorities. The following describes the 
three capital construction projects in dispute between the tribes and 
the Corps.
    Bonneville Screen System Outfall Relocation and Screen System 
Development.--This Corps proposal would commit $28 million or 22 
percent of the fiscal year 1998 budget. The total cost of outfall and 
screen system development at Bonneville is estimated at $150 million 
over the MOA term or about 25 percent of the total MOA capital budget 
for the Corps. The CRITFC filed comments to the Corps' environmental 
assessment on this project, recommending that other alternatives, such 
as spill efficiency improvements, dissolved gas abatement, and adult 
passage improvements be considered in a full environmental impact 
analysis. The Corps has refused to conduct an EIS and has refused to 
review spill and surface bypass as alternatives to more screen system 
development, despite evidence that reach survival and smolt-to-adult 
returns are much greater for juveniles passed in spill at Bonneville 
than through screen bypass system or turbines (Gilbreath et al. 1993; 
Ledgerwood et al. 1989; Dawley et al. 1993). In fact, research 
indicates that juvenile survival to adults was greater for juveniles 
that passed through turbines than through the Bonneville screen system 
(Gilbreath et al. 1993; Ledgerwood et al. 1989; Dawley et al. 1993).
    Instead of outfall relocation and further screen system 
development, the tribal plan would allocate $28 million over this same 
period (contrast with the $150 million cost of the Corps proposal) for 
construction of gas abatement structures in the Bonneville tailrace to 
allow spill passage performance goals to be met and adult passage 
improvements to reduce adult fallback and delay.
    John Day Extended Length Screen Development.--This Corps proposal 
would commit $10 million of the fiscal year 1998 budget and require 
another $10 million in capital construction funds in fiscal year 1999 
to complete the John Day extended length screen development. These 
screens have only undergone one year of testing at John Day Dam. 
Lamprey, which are not only an important food fish for the Tribes but 
have cultural significance, suffer substantial mortalities as shown in 
other tests of these screens. Lamprey numbers are dwindling toward 
extinction in the Columbia Basin. Sockeye descaling and subyearling 
impingement are also identified problems in tests of these screens. No 
empirical observations on impacts to anadromous fish have been made on 
these screens while they were being tested. These screens run counter 
to the science presented in the Independent Science Group's Return to 
the River and the tribes' Spirit of the Salmon. Funds allocated to 
these screens would be wasted under a John Day drawdown, because the 
screens would be inoperative.
    The tribal plan allocates the money proposed for these screens to 
adult passage improvements at the lower Columbia River dams and 
development of spill efficiency and surface bypass systems at John Day 
Dam.
    Lower Granite Surface Collector.--This Corps project would waste 
$14 million of the fiscal year 1998 budget. The Corps is proposing that 
an additional $14 million be spent on the project in fiscal year 1999. 
The prototype system performed very poorly in 1996 and tribal 
biologists do not expect much, if any, improvement in 1997 tests. The 
proposed total cost of $28 million (subject to increases) would be 
wasted investments and could interfere with proceeding with Lower 
Granite natural river drawdown.
    The tribal plan allocates the money proposed for this project 
toward implementation of lower Snake River drawdowns. The tribal plan 
calls for surface bypass development at lower Columbia River projects 
that are not being considered for natural river draw downs.
    Other Tribal fiscal year 1998 Capital Construction Priorities.--
With respect to surface flow bypass measures, the tribal approach calls 
for focusing about $12 million towards Bonneville and John Day Dams. 
These two projects have the worst passage conditions of the Corps dams 
because the current screen systems are inadequate and total dissolved 
gas levels limit spill. The Corps approach calls for the majority of 
surface bypass funding, about $14 million, to be spent at Lower Granite 
Dam. This money will be wasted when the project is drawn down plus the 
dam already has two bypass systems in place (a screen system and 
fliplips for spill).
    In addition, the tribal approach would dedicate about $29.5 million 
to necessary adult passage measures including temperature control; the 
Corps plan only allocates about $2 million for adult passage. In recent 
discussions of the System Configuration Team, the Corps has admitted 
that numerous adult passage problems should be addressed, but no 
funding has been allocated to those identified problems. Instead, the 
Corps is issuing a report that will call for more studies.
    Finally, for gas abatement measures, the tribal approach calls for 
stilling basin design and preparation for construction at Bonneville 
and John Day in 1999-2000; the Corps plan calls for general studies 
leading only to a prototype at Ice Harbor in 2001.
    In conclusion, the Corps must recognize that, under the MOA, it 
committed to ``consult * * * [which means] a significant effort to 
communicate and discuss the relevant issues with Tribes at the policy 
level in an attempt to reach a common viewpoint with the Tribes.'' The 
Corps' development of their fiscal year 1998 capital construction 
budget occurred without fulfilling this obligation. It is apparent from 
their proposed budget that the Corps is not interested in making a 
change in their course, a course of destruction that has already cost 
the region several salmon stocks and that will cost us hundreds of 
millions of dollars more without effectively--or efficiently--providing 
the region any reasonable benefits in our salmon recovery effort. The 
tribes respectfully ask that you provide the Corps with alternative 
budget guidance from their proposal before you, restricting the 
expenditure of any funds until actual consultation has occurred between 
the tribes and the Corps on these critical issues. Thank you for your 
careful consideration of our testimony. Please contact us if you have 
any questions, we can provide additional information at your request.
                                 ______
                                 
  Prepared Statement of Keith Leavitt, Ports Division Manager, Oregon 
                    Economic Development Department
    Mr. Chairman and members of the subcommittee, I am Keith Leavitt, 
Ports Division Manager for the Oregon Economic Development Department. 
I appreciate the opportunity to testify on behalf of the State of 
Oregon about the proposed fiscal year 1998 budget for the United States 
Army Corps of Engineers. My testimony today discusses several aspects 
of Corps activities, including: our support for the Corps of Engineers 
Operations and Maintenance activities; the proposed Columbia River 
Channel Deepening project; and importance to Oregon ports of 
maintaining the Corps of Engineers Hopper Dredge Fleet
Continued Operation and Maintenance Dredging
    Operation and maintenance dredging work on the navigation channels 
of the Columbia River and Oregon coastal channels and harbors is 
critical to our state's waterway infrastructure. Maintenance of the 
navigation channels directly affects our access to regional, national, 
and international markets. If our waterways are not kept at functional 
projects depths at all times, we face substantial negative economic 
impacts--on shippers, manufacturers, producers, and commercial and 
recreational fishing interests. There is also the potential for safety 
issues to arise due to shoaling on coastal bars and in channels.
    While the Administration appears to have retracted its previous 
plans to reduce or terminate the Federal role in maintenance dredging 
of shallow draft ports and harbors, the Corps now advises it will 
``prioritize'' projects and recommend funding levels accordingly. 
Congress must continue to reject proposals that limit the Federal role 
in maintenance dredging of the shallow draft ports and harbors which 
are critical to their local and regional economies.
Columbia River Channel Deepening Study
    The Columbia River is the second largest gateway in the world and 
the nation for grain exports, the largest in the nation for wheat 
exports, and the second largest export port on the West Coast. In order 
to maintain the flow of goods on the lower Columbia River (worth $14 
billion in 1995), channel depth must be increased to serve the larger 
ships which now call in Portland and other Columbia River ports. 
Currently, ships requiring 42 feet or greater draft do call at these 
ports but not at full operating efficiency because they have to time 
their sailings only to high tides and/or sail with less than full 
loads.
    The proposed channel deepening project is an important piece to our 
region's economic future. The project feasibility study formally began 
on July 1, 1994 and is scheduled for completion in 1999. We believe the 
study will show that the project has clear economic benefit while 
meeting high standards for environmental protection. We hope Congress 
will ensure that adequate funds are provided and that the Corps will 
have the tools to move this study through the environmental and 
economic review process as expeditiously as possible. This year's 
funding request is $724,000.
Corps Hopper Dredge Fleet
    Columbia River and Oregon coastal ports rely heavily on the 
regional placement, responsiveness, and capacity of the Federal hopper 
dredge fleet. The two Army Corps of Engineers hopper dredges stationed 
in the Pacific Northwest, the Essayons and the Yaquina, as well as the 
McFarland out of Philadelphia, serve critical roles beyond their 
ability to carry out the actual functions of channel and harbor 
dredging. The public fleet provides emergency response capability which 
has been critical in such natural disasters as the Mount St. Helens 
volcanic eruption in 1980 and the floods on the Mississippi in 1993 and 
1996. Even without natural disasters, emergency dredging is often 
needed to restore federal navigation channels to allow commerce to 
pass. Shoaling can occur rapidly and can impact import/export shipping 
and commercial fishing activities. Quick response to emergency 
situations is key to upholding trade commitments and to vessel safety. 
In addition, the dredge fleet serves an important role in cost 
containment by providing competition in the contract bidding process. 
While a significant amount of dredging work is contracted out to the 
private sector, port officials believe that without the public fleet, 
dredging costs would escalate due to the lack of private sector 
competition.
    During the last Congress, as a result of the mandates in the Water 
Resources Development Act of 1996, the hopper dredge Wheeler (out of 
New Orleans) was put on stand-by status leaving the nation's ports with 
only three public dredges. In addition, the cubic yard set-aside for 
private dredges was increased by 1 million cubic yards per year. We 
urge Congress to hold firm in support of the remaining hopper dredge 
fleet.
Ports are Critical to U.S. Infrastructure
    As members of this subcommittee, you are acutely aware that ports 
are an integral link in our nation's transportation system. Low cost 
water transportation is an important ingredient in keeping U.S. 
products competitive in world markets. Funds to upgrade the nation's 
transportation network should be spent with an understanding that an 
inefficient port system can create a bottleneck to moving goods to 
markets. We must make sure that an efficient transportation system 
starts with the key intermodal transfer--our nation's ports. We want 
the cost competitive advantage provided when our waterways and ports 
operate at the same efficiencies as do our highways, rail and ocean 
carriage of goods.
Conclusion
    On behalf of the Oregon Economic Development Department and 
Oregon's 23 port districts, I thank you for this opportunity to submit 
comments on issues that impact us greatly.
                                 ______
                                 
   Prepared Statement of Glenn Vanselow, Executive Director, Pacific 
                    Northwest Waterways Association
    Mr. Chairman and members of the Subcommittee: My name is Glenn 
Vanselow. I am Executive Director of the Pacific Northwest Waterways 
Association. We appreciate the opportunity to present our views on 
appropriations issues to the Committee. The PNWA membership includes 
nearly 130 organizations and individuals in Oregon, Washington, and 
Idaho. PNWA represents public port authorities on the Pacific Coast, 
Puget Sound, and Columbia/Snake River System; public utility districts, 
investor-owned utilities, electric cooperatives and direct service 
industries; irrigation districts, grain growers and upriver and export 
elevator companies; major manufacturers in the Pacific Northwest; 
forest products industry manufacturers and shippers; and tug and barge 
operators, steamship operators, consulting engineers, and others 
involved in economic development throughout the Pacific Northwest.
    PNWA has a long history of working with the Committee and the U.S. 
Army Corps of Engineers on projects of regional and national 
importance, sharing the challenge to maintain and develop our 
transportation infrastructure. Our members wish to thank the Committee 
for its support of Pacific Northwest transportation, hydropower and 
salmon enhancement programs and projects.
                   summary of appropriations request
    I will discuss the following issues in my testimony, including:
    Navigation Operations and Maintenance.--We support the President's 
fiscal year 1998 Budget request for operations and maintenance (O & M) 
of the federally authorized navigation channels in the Columbia and 
Snake Rivers, Puget Sound and the Oregon and Washington Coasts, but we 
oppose the downward trend in the civil works budget. We encourage the 
Committee to increase funding to maintain the Chetco River navigation 
project at Brookings, Oregon.
    Navigation Feasibility Studies and Construction.--We are opposed to 
the ``full-project funding'' proposal for new construction and the 
downward trend in funding included in the President's fiscal year 1998 
Budget request for civil works program. We support full funding for the 
feasibility study of the lower Columbia River Navigation Channel 
Deepening, the Blair Waterway Navigation Study at Tacoma and the East 
Waterway Channel Deepening at Seattle, which is proposed to be carried 
out during O & M dredging.
    Minimum Dredge Fleet.--We support maintenance of all four federal 
hopper dredges in active, operational status, operated by the Corps. We 
favor eliminating the set aside for private dredges. We are opposed to 
the placement of the WHEELER on stand-by status. We encourage the 
Committee to reduce the operating cost by eliminating plant increment 
and reducing depreciation charges for defense equipment.
    Operations and Maintenance of the Region's Hydropower System, 
Salmon Recovery and Drawdowns.--We support the President's fiscal year 
1998 Budget request for construction on the Bonneville Dam powerhouses 
and operations and maintenance of the region's hydropower system. We 
encourage the Committee to deny Administration requests to reprogram 
1997 appropriations to study drawdown at John Day, and to deny funding 
in 1998 for drawdown studies in the Federal Columbia River Power 
System.
    Salmon Recovery Decision Authority and Funding.--First, we support 
efforts to establish priorities for funding and implementation of fish 
and wildlife recovery projects in the Columbia River Basin Fish and 
Wildlife Program. Second, we support continuation of the $435 million 
annual ``cap'' on Bonneville Power Administration expenditures for 
salmon recovery. Third, we support selected salmon recovery actions 
such as improved and enhanced smolt transportation, surface collection 
and other smolt by-pass facilities, habitat restoration and protection, 
and predator control.
    Mitchell Act Hatcheries.--We believe that funding for Mitchell Act 
fish hatcheries should be contingent upon the marking of all hatchery 
fish.
    Hanford Cleanup.--We support funding for programs at the Hanford 
site, including clean up and reopening the Fast Flux Test Facility.
                  full text of appropriations request
Navigation Operations and Maintenance
    We would like to thank the Committee for its previous support of 
navigation O & M (operations and maintenance) in the region's shallow, 
deep draft and inland navigation system. We support the President's 
fiscal year 1998 Budget request, but we oppose the downward trend in 
the civil works budget. We are also concerned about insufficient 
funding to maintain the Chetco River channel at the Port of Brookings 
Harbor, Oregon. We support the Port's request for a funding increase at 
that project.
    Navigation is the least cost, most fuel efficient and least 
polluting mode of transportation. Navigation is the critical link that 
keeps the Northwest and the nation competitive in domestic and 
international trade and supports the commercial and recreational 
fishing industry. It provides significant numbers of jobs and other 
economic benefits both within the region and nationally. We support 
maintaining a strong federal role in planning, construction, operation, 
maintenance and funding of navigation on the inland waterways, deep 
draft ports and shallow draft ports. We ask the Committee for full 
funding for ongoing operations and maintenance (O & M) of the federally 
authorized navigation channels in the Columbia/Snake river system, the 
Oregon and Washington coastal ports and Puget Sound. Maximizing O & M 
is a cost-efficient means of fully utilizing the federal government's 
investment in channel operations.
    We urge the Committee to resist those proposals that would 
drastically reduce Corps funding for basic services, including the 
maintenance of shallow and deep draft ports and inland waterways. Some 
20 percent of the employment in the Northwest states is directly 
related to international trade. These navigation projects are among the 
few federal programs that are analyzed to ensure that economic benefits 
exceed the costs. Eliminating these programs would not be cost-
effective.
Navigation Feasibility Studies and Construction
    We wish to thank the Committee for appropriating funds last year 
for construction of the Coos Bay, Oregon channel deepening project and 
the breakwater extension at Newport, Oregon. We support the President's 
Budget request for feasibility studies and new construction. We are 
opposed to the Administration's ``full-project funding'' proposal for 
new construction and the downward trend in funding reflected in the 
President's fiscal year 1998 Budget request for civil works.
    The Columbia River deep draft channel is the lifeblood of the 
Columbia/Snake River System, which serves shippers from 40 states. To 
protect future growth and development of the River System, we ask the 
Committee to continue to fund the federal share of the feasibility 
study of the lower Columbia River Navigation Channel Deepening. This 
funding would pay for the federal government's share of the study to 
investigate improving the existing 40-foot navigation channel by 
increasing the channel depth to 43 feet.
    PNWA also supports funding for the Blair Waterway Navigation Study 
at Tacoma and the East Waterway Channel Deepening at Seattle, which is 
proposed to be carried out during O & M dredging.
Minimum Dredge Fleet
    We encourage the Committee to maintain all four federal hopper 
dredges operated by the US Army Corps of Engineers by rejecting plans 
to place the dredge WHEELER on stand-by status, and by eliminating the 
set-aside for private dredges. We oppose legislation that places 
artificial limits on the federal hopper dredges by directing increasing 
amounts of maintenance dredging to private dredges. Federal hopper 
dredge costs are artificially higher than necessary because of that set 
aside. We believe that Congress should reduce or eliminate the set 
aside to increase the efficiency of the Corps hopper dredges. We also 
encourage the Committee to find ways to make the Corps dredges less 
expensive to operate by examining recent increases in depreciation and 
plant increment payments.
    We believe that the presence of the federal dredges keeps bids for 
dredging work competitive and lower in cost. Private dredge contractors 
perform all new construction and three quarters of annual O & M 
dredging nationwide. We are concerned that the low number of private 
industry bids for work in our region could force dredging costs higher 
were it not for the availability of the federal dredges.
    We support the continued operation of the North Pacific Division-
based ESSAYONS and YAQUINA to meet Pacific Coast planned maintenance 
and emergency dredging needs, as specified in the Water Resources 
Development Act of 1996. The coastal and river ports of the Pacific 
Northwest rely heavily on the regional placement, responsiveness and 
capacity of these dredges. To remain competitive in world markets, 
Northwest ports and their customers rely on the federal hopper dredges 
for cost-effective and timely completion of dredging requirements.
    Today, the Mississippi River is expecting significant loss of 
channel depth due to flooding. The Corps of Engineers is reported to 
have serious problems in acquiring enough federal and private medium 
and large class hopper dredges to meet peak dredging demands to allow 
ships to take full advantage of the authorized channels. This is not a 
localized problem. The US Weather Service is forecasting wetter than 
normal conditions on top of higher than normal snow pack for most of 
the US. The Corps of Engineers is warning of high flows and high water 
in the Pacific Northwest. The prospect for more floods this year is 
high: one more reason we need to keep all four federal hopper dredges 
in active, operational status in the Pacific Northwest, the Gulf and 
the East Coast. Shippers and ports cannot afford to wait several weeks 
for dredging. Trade commitments and vessel safety are at risk.
    There are other ways to cut costs and increase the efficiency of 
the Corps' hopper dredges. The Corps bills deep-draft navigation 
projects a ``daily rate'' when it uses one of its four hopper dredges 
to perform operations and maintenance (O & M) dredging. Included in 
this daily rate is everything from fuel and crew salaries to plant 
increment to replace the equipment in the future and depreciation to 
pay for the equipment.
    Prior to fiscal year 1995, the Corps did not collect plant 
increment for its hopper dredges. The addition of this fee added over 
$4 million to the cost of performing O & M dredging of projects with 
the Corps' hopper dredges.
    Prior to fiscal year 1993, the Corps calculated depreciation of its 
hopper dredges over 40 years. In fiscal year 1994 the Corps changed the 
calculation to 50 years, reasoning that with lessened use, driven by 
directives to contract more work with private industry, the federal 
hopper dredges would last longer. However, beginning in 1995, the Corps 
changed its depreciation calculations again. Prior to 1995, federal 
hopper dredge charges to navigation projects were reduced, or 
``discounted,'' in the amount proportionate to the cost of the military 
features added during construction. In 1995 the Corps reduced this 
discount. Navigation projects are paying for depreciation on defense-
related equipment, although their current defense role is not clear. 
This adds nearly $2 million annually to the cost of using the Corps' 
hopper dredges.
    We believe that nearly $6 million could have been saved if the 
Corps had not imposed plant increment and increased depreciation 
charges on its hopper dredges. We encourage the Committee to explore 
the following questions. Does it make sense to save for new dredges 
while Congress is placing one federal hopper dredge on stand-by and 
reducing the work of the remaining dredges? Has Congress made a 
decision to replace this equipment? Has the Corps reported to Congress 
on the defense-related role of the federal hopper dredges? Is the Corps 
planning to include defense-related criteria in its future reports to 
Congress on the necessity of maintaining the federal hopper dredges of 
the Minimum Dredge Fleet? Why is the civil works navigation O & M 
program, funded by the Harbor Maintenance Trust Fund, paying for 
defense-related equipment on the federal hopper dredges?
    A Corps study of the dredge fleet to help set future policy is 
expected to be released in July. PNWA will inform the Committee of our 
comments when that study is released.
Operations and Maintenance of the Region's Hydropower System, Salmon 
        Recovery and Drawdowns
    We support the President's fiscal year 1998 Budget request for 
construction on the Bonneville Dam powerhouses and operations and 
maintenance of the region's hydropower system. We would like to make 
the Committee aware of current and future need for rehabilitation of 
turbines at a number of projects, including The Dalles and Ice Harbor 
projects.
    We encourage the Committee to deny Administration requests to 
reprogram 1997 appropriations to study drawdown at John Day. We also 
encourage the Committee to deny funding in 1998 for drawdowns or 
drawdown studies on the Federal Columbia River Power System. We 
testified last year that we do not believe there is biological 
justification for drawdowns. This year, we would like to make the 
Committee aware that in addition to the biological questions, there are 
serious economic impacts to the region and the nation. Drawdown would 
eliminate important authorized purposes on the system, including 
navigation, hydropower production and irrigated agricultural 
production. The committee also should be aware that we believe that 
drawdown would reduce the Bonneville Power Administration's revenue 
generating capacity and jeopardize BPA's ability to repay its debt to 
the US treasury. The four lower Snake dams and John Day provide 20 to 
25 percent of BPA's total energy production.
    As the Committee is aware, in December 1995 the National Research 
Council (NRC) released its study on salmon recovery efforts. The NRC 
Committee concluded that the transportation of smolts is the ``most 
biologically and economically effective way to help them get past the 
dams.'' They said drawdown, except to river grade, was not proven to 
benefit the fish. ``Dam removal and drawdown to river grade would help, 
but they are too costly.'' The NRC Committee project director indicated 
during briefings that ``focusing on the hydro system alone will not 
solve the problem. The Columbia River is only one piece of the 
puzzle.''
    Our reading of the Bevan team recommendations in the NRC report 
indicate that they continue to discredit drawdowns. This is true of the 
reservoir survival study results in the Williams/Skalski/Iwomoto 
studies over the last three years which show reservoir mortality is 
negligible. We do not see any value in continuing to spend time and 
money on more drawdown analysis or on drawdown implementation, for 
example, in the Snake River Environmental Impact Statement which is now 
underway. There is no scientific justification for the massive flow 
volumes that were called for last year. Likewise, judicious application 
of spill may help in some circumstances, but large volumes of spill 
increase nitrogen supersaturation to lethal levels.
Salmon Recovery Decision Authority and Funding
    We support continuation of the Committee's decision of two years 
ago to impose an annual cap on salmon recovery costs. We are hopeful 
that the Bonneville cost-cap, even though it has some flexibility, will 
force a prioritization of recovery measures, and implementation of cost 
effective measures. The cost cap means that the region and the country 
can no longer afford to add more and more requirements without 
scientific justification. We support the $435 million annual ``cap'' on 
Bonneville Power Administration expenditures for salmon recovery.
    We also support the 1996 amendment to the Northwest Power Act, 
approved during consideration of the fiscal year 1997 Energy and Water 
Appropriations bill, which establishes a panel of scientists to 
establish priorities for funding and implementation of fish and 
wildlife recovery projects in the Columbia River Basin Fish and 
Wildlife Program. We hope that this, with the Independent Economic 
Analysis Board, will result in programs that will provide maximum 
biological benefits to listed salmon stocks and are more cost-effective 
than the current salmon recovery programs.
    While we support efforts to improve the processes governing the 
region's fish and wildlife programs, we are concerned that some 
proposals will decrease, not increase accountability. One reason for 
our concern is that some discussions about ``regional control'' seem to 
involve only the federal, state and tribal fish agencies who have a 
vested interest in higher, not lower, fish and wildlife expenditures. 
We believe that those who are paying for these programs and those 
affected by the programs should be part of the decision process.
    We also believe it is appropriate to consider a federal cost share 
for ESA recovery programs. And by that, we mean federally appropriated 
funds. This makes sense to us for two reasons. The first is that the 
region is already paying more than any other region in the world for 
endangered species protection.
    Secondly, there are no checks and balances on the federal agencies 
or the Power Planning Council. They simply demand more each year. 
Without biological monitoring and without scientific justification, the 
region's costs have increased at an explosive rate. One way to ensure 
that the federal agencies employ biologically sound and cost-effective 
measures is to make them responsible for a significant portion of the 
cost. Federal government participation in paying for recovery measures 
would bring far greater accountability to the agencies. The benefits 
would increase and the costs would go down. The Administration and 
Congress would have a far greater opportunity to make sure that the 
agencies provide maximum benefit at the lowest possible cost.
    We encourage providing the region with significant decision making 
authority while including a mechanism for federal cost share.
    Mitchell Act Hatcheries.--We believe that Mitchell Act hatchery 
funding should be contingent upon the marking of all hatchery fish.
    Hanford Cleanup.--We ask the Committee to continue to adequately 
fund the Department of Energy cleanup of 45 years of accumulated 
defense waste currently stored at the Hanford site. We recognize that 
defense waste cleanup is a long-term project that will be most cost 
effective and most rigorously pursued if Hanford is a viable, operating 
site. Therefore, we strongly urge the Committee to support a complete, 
ongoing Hanford scientifically and technologically based research and 
operations program in order to ensure long-term funding for waste 
cleanup. PNWA also supports a complete and ongoing scientifically and 
technologically based research and operations program, including the 
restart of the Fast Flux Test Facility for the joint missions of 
national defense and medical research and isotope production to meet 
the demands for more effective cancer treatments.
Conclusion
    On behalf of nearly 130 members from throughout the Pacific 
Northwest, we thank the Committee for giving us this opportunity to 
review a number of issues important to the environmental and economic 
prosperity of our region.
                                 ______
                                 
  Prepared Statement of Nathaniel Bingham, Habitat Director, Pacific 
             Coast Federation of Fishermen's Associations'
          winter-run chinook salmon captive broodstock program
    The Captive broodstock program, which we are requesting 
continuation funding for, arose from the shared concern about the 
possible extinction of the winter-run of a wide range of stakeholders 
and agencies. In 1991 the concerned parties formed the Winter-Run 
Captive Broodstock Committee which formulated and began the program. 
Utilizing funding provided by Congress (attached budget summary) the 
committee began the program in 1992. Total annual program costs have 
averaged $1,250,000/par Rearing facilities at Bodega Marine Laboratory 
of the University of California and Steinhart Aquarium of The 
California Academy of Sciences were constructed around juvenile salmon 
provided from Coleman National Fish Hatchery. Presently the combined 
facilities of both institutions are holding four year classes of salmon 
in captivity. Offspring from the captive adult salmon have been 
successfully released in the Sacramento River.
    The captive broodstock program has required and has provided 
substantial scientific and technical advances in the husbandry, 
pathology, and genetics of chinook salmon.
    In order to conserve the unique genetics of the winter-run, the 
program has developed a new microsatellite DNA marker technology to 
determine the parentage and run identity of the captive salmon. These 
markers are now being further developed and are being used to identify 
the stock origin of salmon entrained by the State water export pumps in 
the Sacramento San Joaquin Delta. Thus these markers will have uses in 
salmon biology far beyond their application to the brood stock program.
    This year we are requesting $250,000 from the committee in the 
Bureau of Reclamation funds. This is half of the $500,000 that we were 
provided in fiscal year 1997. We have requested that $259,000 be 
provided for our molecular genetics work by the Bureau of Reclamation 
Central Valley Project Restoration Fund. The U.S. Fish and Wildlife 
Service, which administers the water user fee generated fund, has not 
yet made a decision whether to grant our request. If they do not, then 
we are requesting $500,000 from the committee.
        community based coho salmon habitat restoration projects
    Coho Salmon have recently been listed as threatened in Central 
California under the Federal Endangered Species Act. It is anticipated 
that the National Marine Fisheries Service will soon also list Coho in 
the ``Transboundary Evolutionarily Significant Unit'' in Northern 
California and Southern Oregon. This listing is anticipated to impact 
many users of timber and water resources in California and Oregon. 
Congress has recently acted to create a new restoration funding source 
for the Klamath River in its upper basin in Oregon. We are requesting 
that the committee provide one million additional dollars to The 
Klamath River Basin Restoration Act program in California.

                                                                      WINTER-RUN CHINOOK SALMON CAPTIVE BROODSTOCK PROGRAM                                                                      
                                                                              [Summary of proposed 10-year budget]                                                                              
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                1992-93      1993-94      1994-95      1995-96      1996-97     1997-98    1998-99   1999-2000   2000-01    2001-02             
State fiscal year (7/1-6/30) Federal fiscal year (10/1-9/30)      1993         1994         1995         1996         1997        1998       1999       2000       2001       2002       Total  
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                     BUDGET REQUIREMENTS                                                                                                                                                        
                                                                                                                                                                                                
Steinhart Aquarium..........................................      222,600       89,400      173,000      114,000       98,400    116,000     85,400     88,600     93,000     96,600   1,177,000
Bodega Marine Lab...........................................      489,700      607,200      565,100      513,400      547,600    697,000    655,400    700,600    712,000    750,000   6,238,000
Genetic Management/Molecular Genetic Analysis...............      225,000      219,600      230,500      244,900      235,100    259,000    248,000    260,400    273,700    287,600   2,483,800
Genetic Management Subcommittee.............................       41,000       42,000       43,000       24,000       25,000     26,000     26,000     27,000     28,000     29,000     311,000
Coleman National Fish Hatchery Operations and Maintenance...      250,000      250,000      250,000      250,000      250,000    250,000    250,000    250,000    250,000    250,000   2,500,000
                                                             -----------------------------------------------------------------------------------------------------------------------------------
      Total budget requirements.............................    1,228,300    1,208,200    1,261,600    1,146,300    1,156,100  1,348,000  1,264,800  1,326,600  1,356,700  1,413,200  12,709,800
                                                             ===================================================================================================================================
        FUNDS ACQUIRED AND/OR ADDITIONAL FUNDS NEEDED                                                                                                                                           
                                                                                                                                                                                                
Funds acquired:                                                                                                                                                                                 
    U.S. Dept. of Interior:                                                                                                                                                                     
        Fish and Wildlife Service...........................      250,000      250,000      250,000      250,000      250,000    250,000  .........  .........  .........  .........   1,500,000
        Bureau of Reclamation...............................      300,000      300,000      125,000      300,000      500,000  \2\ 241,0                                                        
                                                                                                                                      00  .........  .........  .........  .........   1,525,000
        Restoration Fund (Molecular Genetic)................  ...........  ...........  ...........  ...........  ...........    259,000  .........  .........  .........  .........  ..........
    U.S. Dept. of Commerce: NOAA............................      500,000      237,500      237,500  ...........  ...........  \2\ 250,0                                                        
                                                                                                                                      00  .........  .........  .........  .........     975,000
    State of California:                                                                                                                                                                        
        Department of Fish and Game.........................      241,300      200,000  ...........  ...........  ...........  .........  .........  .........  .........  .........     441,300
        Salmon Stamp........................................       25,000       10,000       10,000       15,000       25,000     25,000  .........  .........  .........  .........      85,000
        Department of Water Resources.......................       75,500      176,300       34,200      125,000  \2\ 100,000  \2\ 123,0                                                        
                                                                                                                                      00  .........  .........  .........  .........     511,000
            DWR via NFWF....................................  ...........       14,300      200,000  ...........  \2\ 100,000  .........  .........  .........  .........  .........     314,300
    Nongovernmental Funds:                                                                                                                                                                      
        National Fish and Wildlife Foundation...............  ...........        7,200      121,200  ...........  ...........  .........  .........  .........  .........  .........     128,400
        Category III........................................  ...........  ...........  ...........      300,000   \2\ 74,000    200,000  .........  .........  .........  .........  ..........
                                                             -----------------------------------------------------------------------------------------------------------------------------------
          Subtotal--Funds Acquired..........................  \1\ 1,391,8                                                                                                                       
                                                                       00  \1\ 1,195,3                                                                                                          
                                                                                    00  \1\ 977,900  \1\ 990,000  \2\ 1,049,0                                                                   
                                                                                                                           00  1,348,000  .........  .........  .........  .........   5,854,000
                                                             ===================================================================================================================================
Additional funds needed.....................................  \1\ +163,50                                                                                                                       
                                                                        0       12,900      283,700      156,300      107,100  .........  1,264,800  1,326,600  1,356,700  1,413,200   6,855,800
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Due to administrative delays, funds acquired may not be encumbered and spent in the same fiscal year.                                                                                       
\2\ Preliminary amounts, not yet approved.                                                                                                                                                      

                                 ______
                                 
 Prepared Statement of John Fratt, Executive Director, Port of Kalama, 
                                   WA
    Mr. Chairman and members of the Subcommittee: My name is John 
Fratt, and I am Executive Director of the Port of Kalama in Kalama, 
Washington. My remarks today also represent six other lower Columbia 
River ports in Oregon and Washington because I also serve as President 
of the Interstate Columbia River Improvement Project (ICRIP), the local 
sponsors of the plan to deepen the Columbia River.
    Your committee has shown strong support for our efforts to improve 
the Columbia River transportation system over many decades. Let me 
start by voicing our sincere appreciation for the support your 
subcommittee has shown in the past.
    I am before you today as the representative of the Columbia River 
Navigation Channel Deepening Project: the seven deep-draft ports 
located on the main navigation channel of the lower Columbia River. 
Besides the Port of Portland, these ports include, in Oregon: the Port 
of Astoria and the Port of St. Helens; and in Washington: the Port of 
Kalama, the Port of Longview, the Port of Vancouver, and the Port of 
Woodland. In 1995, more than 2,100 ocean-going ships carrying 38 
million tons of cargo valued at more than $14 billion called at the 
private and public facilities located at these ports. This continues a 
20-year trend that has seen cargo volumes double on the lower Columbia 
River.
Request Summary
    On behalf of the seven ports, I am seeking full funding of the 
$724,000 for fiscal year 1998 for the feasibility study of the channel 
deepening project on the lower Columbia River. This amount will be 
matched by local sponsor ports for the next phase of the feasibility 
study.
    Corps of Engineers Operations and Maintenance Budget.--The 
condition of the Columbia River deep-draft navigation channel has 
deteriorated due to changes in the channel maintenance program and 
dredge disposal practices of the Corps. These changes are due to a 
combination of factors, including budget constraints and restrictions 
on the timing and placement of dredged materials.
    Our request is for a more aggressive advance maintenance program to 
assure that the authorized depth in the channel is available at all 
times. A more proactive policy is needed to ensure our ability to meet 
shipping needs and maritime safety requirements. We are asking the 
Corps to manage the Columbia River dredging program so that the 40-foot 
authorized depth is never encroached upon. Your support for an 
increased Operations and Maintenance (O&M) allocation for the Corps of 
Engineers will be extremely helpful in this undertaking. This would be 
an important investment for U.S. competitiveness and jobs.
    Supplemental Appropriation Request for Flood-Related Dredging.--We 
understand a request for $850,000 in additional money for the Corps to 
cope with flood-related shoaling is under review within the 
Administration. We want to underscore the need for this additional 
funding to cope with added work necessary to deal with record water 
flows this past year. The Columbia River system has experienced back-
to-back years with record flooding. For the navigation system, this has 
meant a tremendous influx of material from rivers and streams and very 
real problems with shoaling. To assure navigation safety and timely 
movement of water-borne goods, I strongly encourage Congress to approve 
the supplemental appropriations request forwarded to you by the 
Administration.
    Corps of Engineers Hopper Dredge Fleet.--My fourth request today is 
for continued Congressional support for the Corps of Engineers Hopper 
Dredge fleet. These vessels, which provide timely and effective service 
on each of our coast lines, are of critical value to the navigation 
needs of the Columbia River and coastal ports in our region.
    In my view, unnecessary and artificial limits on the operation of 
the federal fleet have hampered the effectiveness of these four dredges 
and have driven operating costs higher. In addition to requesting 
funding to assure full operation of the dredges, I would encourage 
Congress to review the restriction placed on Corps fleet operations.
Funding for the Feasibility Study on the Lower Columbia River
    Let me elaborate on the study of the channel project in the lower 
Columbia River.
    There is plenty of discussion these days about improvements to our 
transportation infrastructure. I can think of no better example--or no 
better investment--than this improvement to the Columbia River deep-
draft waterway.
Nation Needs Columbia River Exports
    The ports I am representing here today, the communities they serve, 
and the economy of the Pacific Northwest rely on the Columbia River 
system as our main connection to world markets. A navigable river 
system is the most efficient means for products from our region and 
beyond to remain competitive. Economics of scale already are bringing 
larger, deeper-draft vessels into the Columbia River. All indications 
are that this trend will continue.
    International trade within our region is expected to expand in the 
next 20 years by two-and-one-half times. International trade supports 
one-fifth of Washington's work force, an estimated 600,000 jobs. If 
this region is to realize fully the benefits of future growth in 
international trade, an efficient water transportation system will 
remain a key competitive ingredient.
    This fact is important from a national perspective as well. 
Columbia River ports send many more goods overseas than they unload as 
imports. And products are shipped from many western states, including 
many outside our immediate region.
    The Port of Kalama is one of the nation's leading grain export 
ports, handling 10.3 million tons of cargo in 1995. And our impacts are 
felt throughout the nation. As one example, grain production from the 
states of Nebraska, North Dakota, South Dakota, Minnesota, Montana, 
Idaho and Oregon cross our docks on the way to international markets.
    Given the nation's continuing trade deficit, our contribution to 
exports is a very positive factor in efforts to balance our trade 
equation. Also significant is the amount of U.S. Customs fee revenue 
generated by Columbia River ports each year.
    The trend in increasing ship size and cargo capacity in the grain 
and bulk fields is very clear. Taken together, these shipping trends 
create a very favorable economic picture for the channel deepening we 
are proposing. Implicit in this situation, too, is a threat to our 
transportation role, if we are not able to move ahead with the 
navigation improvement work in a timely fashion.
    We know of only one way to meet this growing demand for 
transportation capability--to keep up with export opportunities. That 
is to build and maintain a navigation channel that can handle the 
larger vessels in use today and on order for the future. We began 
planning this navigation improvement project with increasing vessel 
size in mind. Frankly, that reality has caught up with us already. 
Larger and larger vessels calling at the sponsor ports remind us 
regularly of the need for this project. Today, many of these vessels 
are leaving our docks ``light loaded'' at less than full capacity due 
to the restricted draft in the channel.
Maximum Capacity Through Innovation
    The 40-foot channel and a federally-authorized 55-foot channel at 
the mouth of the Columbia have been remarkably successful projects. 
Built on budget, they have served deep-draft vessels safely and with 
less maintenance dredging than predicted in part because of an 
innovation called LOADMAX. Initiated by the lower Columbia River ports 
and completed with the cooperation of the Corps and the National 
Weather Service of NOAA, LOADMAX has made the transportation system 
more effective.
    LOADMAX allows ships to take advantage of deeper water due to tidal 
differences on the Columbia. At the heart is a computer system that 
monitors water levels at seven points along the Columbia. Using this 
technology, we can predict up to six days in advance how vessels can 
ride the high tide window all the way from Astoria at the mouth to 
Portland. Ships leaving Portland on their way to the ocean use the same 
system in reverse. In effect, ships gain about 3 feet of draft by 
timing their movements to coincide with tidal fluctuations in the 
river.
    Even with the innovative LOADMAX system, we are beyond our 
capacity. A deeper channel is needed for the Columbia system to remain 
competitive.
A 100-Year Partnership
    Let me now offer some background on the Columbia River's navigation 
system and its 100-year partnership between the federal government and 
local interests.
    In 1890, the Portland District U.S. Army Corps of Engineers 
completed a study defining the work needed to provide a 25-foot channel 
from Astoria to Portland. A year later, in 1891, the Port of Portland 
was created by the Oregon legislature, for the sole purpose of dredging 
the 25-foot channel. Completion of the project came in 1893.
    Over the years, this partnership has seen successful authorization 
and construction of two more channel improvements: deepening to 35 
feet, completed in 1950; and construction of the existing 40-foot 
channel, dedicated in 1973.
Benefits of an Integrated System
    The main lower Columbia River navigation channel is one part of a 
total system. The main channel serves as the system's gateway, 
accommodating the largest, ocean-going vessels. But those of us on the 
lower river never forget the importance of the lock and dam system on 
the river's upper reaches. That this system exists, and is being 
improved today, is testament to the wisdom and foresight of this 
Committee and Congress.
    In all, eight locks and dams extend the upriver barge system 465 
miles inland to Lewiston, Idaho. This system was completed in 1975. By 
1980, cargo volume projections for the year 2000 had already been 
exceeded.
    One purpose of these dams and attendant locks is to serve 
navigation, allowing tugs and barges to carry products up and down the 
river. Other benefits include providing flood control, water for 
irrigation, and generating electrical power for the region. In return, 
crops--often irrigated with water from these same federal reservoirs--
and some manufactured goods are moved by barge to lower Columbia River 
ports where they are loaded on ocean-going vessels and shipped to world 
markets.
    This integrated system binds Lewiston, Idaho, to Kalama, 
Washington, and Astoria, Oregon. It ties the farmers and ranchers in 
eastern Oregon and Washington, or in Idaho and Montana, to the 
longshoremen and shipping clerks at our lower Columbia River ports.
    This Committee demonstrated its recognition of this relationship 
with recent funding for the Bonneville Lock. The lock removed a 
bottleneck in river navigation and allows more efficient use of the 
entire lock system to move a wide variety goods.
Hopper Dredges
    Adequate dredging of navigational waterways is an essential part of 
the transportation capacity provided by the Port of Portland and other 
Columbia River and coastal ports. Some in Congress are attempting to 
reduce the number of Corps dredges for this essential work. This would 
be the wrong move, because reductions in the Corps hopper dredge fleet 
would not be offset by increases in private dredging capacity, at least 
in the Pacific Northwest. As a consequence, restricting the Corps fleet 
likely would lead to higher costs and less service, and case history 
indicates this is what happens.
    A similar concern arises when we review the capacity of the private 
sector to respond to emergency dredging needs. By emergency, we are not 
referring solely to something on the magnitude of Mount St. Helens. We 
also must contend with shoaling or sand wave problems in the Columbia 
River. Threats from these navigation difficulties could curtail or stop 
navigation in the channel if ignored. These problems do not always 
require a large amount of work; they do require very quick response. If 
Corps dredges serving this region were ever removed, our ability to 
respond promptly and effectively to these challenges would be greatly 
diminished. The result: delayed cargo and lost export opportunities.
    We agree with the policy of maintaining a Minimum Dredge Fleet of 
hopper dredges to meet navigation needs. We also believe that this 
fleet should be operated as efficiently as possible. The set-aside for 
industry hopper dredges makes Corps hopper dredge cost artificially 
high. We believe that Congress should reduce or eliminate the set-aside 
to increase the efficiency of the Corps hopper dredges.
    Cost is an important consideration for a variety of reasons. 
Funding for the Corps O&M budget has remained flat in recent years. At 
the same time, the cost of completing this dredging work is higher due 
to new regulations and challenges related to the environment. The 
result: less money for actual O&M work. On behalf of all ports, we urge 
Congress to provide sufficient O&M dredging funds to meet the needs of 
the customers.
Conclusion
    In conclusion, Mr. Chairman, we believe the existing Columbia River 
navigation channel represents a remarkable success story in terms of 
partnerships--federal, state, and local governments--and, more 
importantly, in terms of regional and national trade development. Now 
is the time to start the next chapter in that success story.
                                 ______
                                 
  Prepared Statement of Peter Williams, General Manager, Port of St. 
                               Helens, OR
    Mr. Chairman and members of the Subcommittee: I am Peter 
Williamson, General Manager of the Port of St. Helens in St. Helens, 
Oregon, and I am pleased to present my views on the fiscal year 1997 
budget for the U.S. Army Corps of Engineers.
    From the earliest days of the nation, ports have had the primary 
responsibility for developing, operating, and financing marine 
facilities and docks. Today, this marine infrastructure is central to 
our national and local economies and the linchpin for efficient 
transportation of goods.
    Ports, whether large, or small ports like mine, are the economic 
engines that generate and support local economic development by 
providing transportation services, stimulating business activity, and 
promoting investment and job creation. Ports also must generate revenue 
in order to be self-sufficient, a responsibility that has become 
increasingly challenging in recent years.
    While local ports attend to the business of port terminal and 
industry development, we rely on the Corps of Engineers for maintenance 
of the navigation system and necessary expansion.
   feasibility study for the columbia river channel deepening project
    We appreciate this committee's support to date for the Corps of 
Engineers' study of improvements to the Columbia River deep-draft 
channel. This project is our region's highest marine priority, and we 
are requesting full funding from the committee for the feasibility 
study in fiscal year 1998, the $724,000 requested in the President's 
budget. As you know, the local sponsor ports provide an equal amount 
for a 50-50 match.
    Greater effort to increase the capacity of this waterway is 
warranted in light of the preliminary economic analysis completed by 
the Corps to date. As another indicator of the economic and 
transportation vitality of our system, we have only to look at the size 
and volume of shipping traffic in the channel.
    In fact, the marketplace demands that we act to increase the 
capacity of the Columbia River system. We are seeing the evidence in 
many ways:
  --Increasing Vessel Size.--In 1981, two vessels with a draft 
        exceeding 39 feet called at Portland. In 1995, that number 
        approached 250. And more larger ships are being designed and 
        built each year.
  --Expanding Trade Volume.--The Columbia River system is the nation's 
        largest wheat exporting port and the second largest grain port 
        system in the world. We are also home to an innovative 
        container-on-barge system that brings cargo downstream from 
        Lewiston, Idaho, 458 miles inland from the Pacific Ocean.
  --Cost-Effective, Timely Transportation.--Our customers and the 
        marketplace demand a totally integrated, transportation 
        logistics system. Today, ports in our region provide that 
        competitive advantage to a number of U.S. export firms. 
        Expansion of the Columbia River channel is a key to assuring 
        that same level of service in the future.
  --Integrated System.--On the Columbia/Snake river system, we connect 
        barge, rail, and trucking with the deep-draft system. 
        Connecting these modes creates a transportation network that 
        works efficiently and effectively for manufacturers and 
        producers throughout our region and around the country.
    Mr. Chairman and members of the Subcommittee, I appreciate the 
opportunity to share the views of the Port of St. Helens on this 
critically important water resource project. Our nation supports a 
world-class transportation system, and we pledge our assistance in 
moving ahead to keep it that way.
    Thank you.
                                 ______
                                 
    Prepared Statement of Mike Thorne, Executive Director, Port of 
                              Portland, OR
    Mr. Chairman and members of the Subcommittee: My name is Mike 
Thorne, Executive Director of the Port of Portland. Ports on the lower 
Columbia River are thriving seaports with extensive bulk, breakbulk, 
auto, and container businesses. We are the third largest export gateway 
on the West Coast and the foremost wheat exporter, handling more than 
39 percent of all exported U.S. wheat in 1995. The Port of Portland 
ranks third nationally as an import and export facility for 
automobiles.
    As members of this committee appreciate, all of this activity 
depends on the policies and actions of the U.S. Army Corps of Engineers 
(the Corps). A high priority for our region is the plan to deepen the 
Columbia River deep-draft channel from 40 feet to 43 feet. This is the 
top priority for the Port of Portland's marine activities. My testimony 
today will cover the following points:
  --Progress on the feasibility study for the Columbia River channel 
        deepening projects and the need for full funding for the study 
        in the fiscal year 1997 budget.
  --Strong support for the Corps hopper dredge fleet.
  --Strong support for the Corps Operation and Maintenance (O&M).
    Let me begin with a ``thank you.'' This committee has shown 
consistent support for the project to deepen the Columbia River 
navigation channel and the seven local ports sincerely appreciate your 
help.
                columbia river channel deepening project
    As Congress focuses on deficit reduction and economic 
revitalization and growth, we should not lose sight of the importance 
of a healthy and efficient transportation system. Ports, as key links 
in the transportation system, serve as economic engines that create 
jobs, stimulate private business, promote growth and competition, and 
strengthen the economy. Investments in seaports, through federal and 
local user-fee funded development programs, return dividends to 
producers, shippers, and the public. As you know, ports must perform 
these services efficiently and with as little impact on the environment 
as possible. This responsibility has become increasingly challenging in 
recent years.
    Our top priority is to assure that this important transportation 
and trade center can continue to provide the nation's producers with 
cost-effective access to the rapidly growing Pacific Rim markets. To do 
so, the 100 miles of river channel between our terminals and the 
Pacific Ocean need to be deepened and maintained at the proposed 43-
foot level. Thus, we are requesting full funding for the Corps 
capability in this year's bill, $724,000 in the President's budget for 
fiscal year 1998 to provide continued funding for the feasibility study 
process.
    At the current channel depth of 40 feet, the Columbia River channel 
depth is adequate to handle most the ships calling on the river. Yet, 
larger ships with deeper drafts have already tested the existing 
channel. Shipping lines have found the depth inadequate, so they have 
replaced the larger ships with intermediate size vessels for now.
    Ships with drafts greater than 38 feet calling at Portland have 
increased from two per year in 1981 to nearly 250 in 1995, the most 
recent year with complete statistics. All major west Coast container 
carriers are building ``post-Panamax'' vessels with drafts that exceed 
our 40-foot channel.
    Mr. Chairman, completing our project is a national transportation 
and competitiveness issue. Ports on the lower Columbia River are 
transshipment centers for export cargo moving on the inland waterway, 
rail and highway systems. Yet our region's ability to make sure the 
deep-draft channel functions well with the rest of the system is 
minimal. These critical miles, from our docks to open water, are 
proving to be the most difficult miles to improve. Channel improvements 
are more costly and time consuming to complete, based on the reports we 
receive from other projects around the country. Even maintenance of 
existing approved channel depths has been difficult in many cases.
    Our appeal today for your assistance is based on regional and 
national interests. For producers and shippers throughout the Pacific 
Northwest and around the country, the Columbia River system is an 
enormous asset. The system faces unprecedented challenges; your 
leadership is central to meeting those challenges.
    In the interest of time, we will not enumerate all of those 
challenges here today. But I would like to focus on two briefly, as 
they relate to the need to deepen the channel in the Columbia River. 
First is the overall growth in commerce on the river system. At 
Portland, that total cargo base is made up of grains, mineral bulk 
commodities, breakbulk, containers, automobiles, and other cargo 
operations.
    Led by large volumes of bulk cargo and steady growth in container 
volumes, the Columbia River system is handling more cargo year after 
year. These statistics are important from a national perspective 
because these cargoes come from producers around the nation. Container 
cargoes here originate in 40 states. Wheat shipments originate in the 
Dakotas, Nebraska, Montana, Wyoming, Idaho, and Kansas, plus Oregon and 
Washington. Corn handled at Kalama, Washington, is produced on farms in 
Iowa, Nebraska, Minnesota, and Texas.
    In the auto shipment business, import cars are distributed to 40 
states from Portland. And exports, autos built in the U.S. for shipment 
to countries throughout the Pacific Rim, make up an increasingly 
significant segment of the business. These export cars mean jobs in 
plants in Kentucky and Ohio. In summary, you can see our ports serve as 
the gateway for products from around the country.
    This leads to challenge number two. To handle this growth in cargo, 
Portland and other lower Columbia River ports are being served by 
larger ships with greater capacity and deeper draft. As these ships 
continue to call more frequently, the sharp increase in deeper drafts 
is pushing the need for improvements to the deep-draft channel in the 
Columbia. The Port of Portland, in its management of the transportation 
system with partner ports on the lower river, can manage most of these 
changes very effectively. With our own resources, we are adding crane 
capacity, expanding our rail systems, improving truck capacity and 
flow, and acquiring new facilities for further expansion.
    One area where we seek this committee's leadership is navigation 
improvements themselves, the piece of the transportation picture that 
historically has been a federal responsibility. Federal support for 
navigation, the heart of the Corps' mission, is central to achievement 
of the nation's important economic and international trade goals. We 
are among our region's most vocal advocates for national policies that 
will enable the Corps to carry out its mission decisively and 
economically.
             hopper dredge fleet: benefits to many regions
    How well we look after and plan for the smooth movement of goods 
and freight into and out of this nation will determine our nation's job 
growth, our quality of life, and our country's competitive position in 
the world. The Corps hopper dredges are central to the water 
transportation system. Benefits from the work accomplished by these 
dredges are felt well beyond our region. Goods originating from the 
East, the Midwest, the states bordering Canada, and the entire Pacific 
Northwest benefit from timely navigation assistance from the Corps 
dredge fleet. Today, the Port of Portland, other Columbia River ports, 
and the coastal ports of the Pacific Northwest work as export gateways 
for the nation. By their focus on exports, these ports provide a very 
positive contribution to our balance of trade. Strategic investments to 
assure effective navigation help our customers around the country 
remain competitive and thrive in a tough global marketplace.
    The Corps hopper dredge fleet is essential to our ability to 
compete. These dredges, in our region the YAQUINA and the ESSAYONS, 
were built specifically for the work they do. They do this job well. 
They operate in rough conditions along the Oregon and Washington 
coasts. Their mobility has them at the scene of an emergency quickly, a 
crucial feature in our region where the presence of the private dredge 
fleet is limited. A review of past bidding for Corps work shows the 
limited number of bids received.
    Beyond the dredging work, the Corps fleet provides another 
important, though less visible, service to the nation's taxpayers. 
Their presence means more competitive bidding. On the private side, 
there are relatively few dredging companies with hopper dredge 
capacity. In the Pacific Northwest, this translates into few bids and 
less competition for the work. The result can be higher bids and higher 
cost for the dredging work completed. Having the Corps fleet provides a 
competitive counterbalance in the market. If this competitive element 
of the Corps fleet were lost, we believe the costs for dredging will 
rise for ports and taxpayers alike.
    As you know, last year Congress increased the amount of work set 
aside for the private sector. This means taking the work out of the 
allotment normally handled by the Corps minimum fleet. Before taking 
this step again, Congress should review the experience of this set-
aside, with these issues in mind: determine how many bids there were on 
each contract; review these bids against the government estimate; ask 
whether there were cost overruns or project delays; and finally, be 
sure to examine carefully the capacities of the private sector to 
respond swiftly. I urge Congress to look at these questions before 
making further major changes in the operation of the hopper dredge 
fleet.
        operations and maintenance (o&m)--the corps of engineers
    As this year's president of the American Association of Port 
Authorities (MPA), I am aware that the Corps is not always able to 
assure the authorized depths in our nation's deep-draft channels. What 
this means is that shipping lines cannot always count on the channel 
depths authorized by Congress.
    At my own port, the condition of the Columbia River channel shoals 
to less than 40 feet in some areas. I believe this problem is due to a 
number of factors, chief among them being budget constraints and 
restrictions on how actual dredging work is completed.
    The result: a less than optimal transportation system. My request 
is for a more aggressive advance maintenance dredging program 
nationally so that our deep-draft channels are maintained at authorized 
depths at all times. Maritime safety needs and shipping requirements 
could be met if the Corps is directed to take a proactive approach in 
its maintenance dredging.
    I encourage your subcommittee to make the budget resources 
available to the Corps for improved advance maintenance dredging. 
Speaking for my region and others, I know this would be an enhancement 
of U.S. competitiveness in world markets. Keeping our waterways 
operating at full depth means our gateways to international trade can 
operate at full capacity.
                               conclusion
    Let me thank you again for your subcommittee's support for 
navigation needs over many years. You have been leaders in enhancing 
our ability to move goods and freight in a cost-effective and timely 
manner. Your assistance has proved critical in the past and it will be 
all the more essential in the future.
    I would be happy to respond to any questions.
                                 ______
                                 
    Prepared Statement of Byron Hanke, Executive Director, Port of 
                             Vancouver, WA
    Mr. Chairman and members of the Subcommittee: I am Byron Hanke, 
Executive Director of the Port of Vancouver, Washington. The lower 
Columbia River ports, the world's second largest grain export gateway 
and the nation's foremost wheat exporter, handle nearly 40 percent of 
all exported U.S. wheat. As a net export shipping system, these Pacific 
Northwest ports are positive contributors to our nation's trade 
picture.
    Of the 5.6 million tons of cargo handled each year by the Port of 
Vancouver, 75 percent is export grain. Our annual cargo value is $1 
billion. More than 3,000 jobs are directly dependent on the port, 
providing a local payroll impact of $72 million. Job impacts are much 
greater when you consider indirect impacts in our community and the 
areas our transportation system serves.
    In this statement, I want to cover two points briefly:
    1. Our progress on the Columbia River Channel Deepening Project and 
the need for full funding requested for the project in the fiscal year 
1998 budget. The budget request is $724,000, an amount local ports will 
match.
    2. Our support for the Corps of Engineers hopper dredge fleet.
                columbia river channel deepening project
    First, I sincerely appreciate this subcommittee's assistance in 
recent Energy and Water bills. Following your Congressional directives 
several years ago, the Corps has reduced the estimated cost of the 
study from nearly $10 million to $6.1 million. That represented a 
significant cost savings to all taxpayers and the local sponsor ports. 
I know the six other ports on the lower Columbia River join me in 
formally acknowledging the very real service performed by this 
subcommittee and its staff.
    Your actions started the study in the right direction, and we have 
made good progress. Deadline for completion of the feasibility study is 
November 1999, and we are working hard to complete it on time.
    The current channel depth in the Columbia River is 40 feet and we 
see convincing evidence that a deeper channel at 43 feet is essential 
to our ability to remain competitive in world markets.
    The number of ships with drafts greater than 38 feet calling in the 
Columbia River has increased from two per year to nearly 250 in 1995. I 
have attached a chart summarizing the increase in the number of calls 
by deeper-draft vessels.
    I can tell you from my own experience that shipowners pay very 
close attention to the channel depth in the Columbia. And, we have had 
new deeper-draft design ships rotated out of calls in the Columbia 
River due to concerns over channel depth.
    Our top priority is to assure that this important transportation 
and trade center can continue to provide the nation's producers with 
cost-effective access to the rapidly growing Pacific Rim markets. Thus, 
we are requesting full funding for the Corps budget request in fiscal 
year 1998, the $724,000 included in the President's budget, to provide 
the initial funding for the feasibility study process.
             hopper dredge fleet: benefits to many regions
    As I mentioned earlier, our jobs, our quality of life, and our 
competitive position in the world depend on how well we look after and 
plan for the smooth movement of goods and freight into and out of this 
nation. U.S. Army Corps of Engineers' hopper dredges play a central 
role in this transportation system. And, Mr. Chairman, the benefits 
from the work accomplished by these dredges are felt well beyond our 
region. Goods originating from the East, the Midwest, the states 
bordering Canada, and the entire Pacific Northwest benefit from timely 
navigation assistance from the Corps' dredge fleet.
    The Corps' hopper dredge fleet is an essential asset in this 
process. These dredges, particularly the YAQUINA and the ESSAYONS, were 
built specifically for the work they do. They can operate in rough 
conditions along the California, Oregon, Washington, and Alaska coasts. 
Their mobility means they can reach the scene of an emergency quickly.
    Beyond the dredging work, this fleet provides another important, 
though less visible, service by keeping an element of competitiveness 
in dredging bids. On the private side, there are relatively few 
dredging companies with hopper dredge capacity. In the Pacific 
Northwest, this translates into few bids and less competition for the 
work. If this competitive element of the Corps fleet were lost, we 
believe the costs for dredging will rise for ports and taxpayers alike.
    As you know, Congress has set aside a specific amount of work for 
the private sector over the last several years. This has been 
accomplished by taking the work out of the allotment normally handled 
by the Corps minimum fleet. I urge Congress to look carefully at this 
practice before making further major changes in the operation of the 
hopper dredge fleet. We believe the reduced capacity of the Corps fleet 
hurts navigation safety and effectiveness around the country.
                               conclusion
    Let me thank you again for your subcommittee's support for 
navigation needs over many years. You have been leaders in enhancing 
our ability to move goods and freight in a cost-effective and timely 
manner. This has proved critical in the past and it will be all the 
more essential in the future.
    Thank you.
                                 ______
                                 
 Prepared Statement of Russ Crabtree, Port Manager, Port of Brookings 
                               Harbor, OR
    On behalf of the Port of Brookings Harbor, Oregon, I would like to 
request consideration of one funding request and the acknowledgement of 
priority status for a harbor-of-refuge improvement project for fiscal 
year 1998: (1) increase the U.S. Army Corps of Engineers, Portland 
District annual operation appropriation and earmark $500,000 to perform 
urgently needed maintenance dredging of the Chetco River channel; and 
(2) recognize a project to replace moorage docks in Boat Basin I and 
renovate moorage docks in Boat Basin II at the Port oaf Brookings 
Harbor as having national importance for the safety and welfare of 
mariners. This testimony addresses the need for both of these requests.
Background on the Port of Brookings Harbor
    The Port of Brookings Harbor, located in Curry County, Oregon at 
the mouth of the Chetco River, is one of the most important job 
creators on Oregon's South Coast. There are 541 jobs dependent upon 
Port activity in the community and there are another 423 associated or 
related to Port activities. This represents about 16 percent of the 
total economy in the community and about 33 percent of all net 
earnings. In 1995, there were 8,181 fishing trips that originated from 
port facilities resulting in bar crossings. A Corps of Engineers 
economic analysis study showed there was $19 benefit to $1 cost in 
regional economic development benefits and $3.4 to $1 in national 
economic development benefits for maintaining the navigation channel. 
Currently, this economic activity is threatened by deterioration of the 
Chetco River waterway and urgent need for replacement and renovation of 
the moorage basins.
Critical Need for Maintenance Dredging of Chetco River Channel
    The Chetco River Navigation Channel has a Federally authorized 
depth of 14 feet. This depth must be maintained in order to accommodate 
the boats which utilize our facilities.
    In March 1945, Congress authorized and appropriated funds for the 
dredging of the Chetco River Navigation Channel to a depth of 14 feet. 
Since then, maintenance dredging has been conducted by the Corps of 
Engineers in most years. In the years 1990-1994, Federal funding was 
fairly consistent averaging about $314,000 per year. In fiscal year 
1996 $470,000 was authorized and appropriated; in fiscal year 1997 the 
amount authorized and appropriated was increased to $530,000 (fiscal 
year 1997 dredging has yet to occur, and will likely be conducted in 
July, as in previous years). However, the amount of material that is 
being dredged from the channel has increased dramatically. In fiscal 
year 1996, 17,000 cubic yards were dredged. In fiscal year 1997 the 
Corps is expecting to dredge more than 34,000 cubic yards--twice as 
much as last year.
    Despite the obvious and increasing need for maintenance dredging of 
Chetco River channel and the rapidly growing amount of dredged material 
which needs to be removed annually, the Corps of Engineers has 
requested only $284,000 for fiscal year 1998 maintenance dredging. Even 
Corps of Engineers staff have suggested that they do not believe that 
this amount will be sufficient to maintain the 14 foot depth of the 
channel. If the channel's depth is reduced, it will threaten the 
passage of commercial vessel traffic which in turn impacts the 
viability of the Port and the surrounding community. To avoid this 
situation, we strongly urge the Subcommittee to increase the Portland 
District, North Pacific Division budget and earmark $500,000 for fiscal 
year 1998 maintenance dredging of the Chetco River project.
Basin I Replacement and Basin II Renovation Project
    Over the past year, the Port has undergone significant renovation 
in order to meet the increasing demands made on the Port by commercial 
and recreational users. The financing of these projects has largely 
been burdened by Port users and associated businesses, despite the 
state and national benefits. Federal agencies, however, have recently 
stepped forward to provide some assistance through President Clinton's 
economic timber adjustment program. For example, the Port has secured 
$650,000 in grant financing to construct a commercial/retail facility 
at the Port.
    The final, and most critical part of this much needed overhaul is 
the renovation and replacement of the 25-year-old mooring facility. The 
Port currently has two basins with a mooring capacity of 911 slips. 
These basins serve as a critical harbor-of-refuge for mariners along 
Oregon's southern coast. Due to years of deterioration and overuse, 
Basin I must be completely replaced and Basin II is in dire need of 
major repair. If efforts to replace/repair Basins I and II are not 
successful this year, more than 50 percent of the Port's mooring 
capacity will most likely be shut down due to safety concerns. The 
basins also have water quality issues due to inadequate seasonable 
flushing problems and wintertime surge problems. It is easy to image 
the devastating impact such a closure would have on this rural, 
struggling community in transition.
    The cost of the boat basin project will be $3 million. Securing a 
low-interest loan in the full amount is not economically feasible as it 
would require the Port to increase berthing fees by as much as 100 
percent, rendering them the highest on the West Coast. At these rates, 
the Port would be unable to fill many of its berths. A loan in the 
amount of $1.5 million would result in an increase of 25 percent 
initially and up to 57 percent over time, an increase we believe our 
patrons, if provided quality facilities, could bear.
    If this project is not funded, and mooring slips are closed (as 
expected), the economic viability of the surrounding community will 
suffer a severe setback, as commercial and recreational vessels calling 
upon the Port of Brookings Harbor will move to other Ports with quality 
mooring and shore-side services. The Port is working with all Federal 
agencies possible to assist in securing assistance. The Corps is 
studying water quality problems through the Water Resources Development 
Act, Section 1135 Program and a surge problem through the Rivers and 
Harbors Act, Section 107 Program.
    The Port respectfully requests that this project be acknowledged by 
this committee as having national importance for the safety and welfare 
of mariners and instruct Federal agencies to participate in its 
planning and financing.
Conclusion
    In sum, the Port of Brookings Harbor respectfully requests the 
following appropriations be included in the fiscal year 1998 Energy & 
Water Development Appropriations Bill: (1) an increase in the Portland 
District, North Pacific Division budget in order to earmark $500,000 to 
fully fund maintenance dredging of the Chetco River channel; and (2) 
recognize a project to replace and renovate moorage as having national 
importance for the safety and welfare of mariners.
    Your strongest consideration of these requests is greatly 
appreciated.
                                 ______
                                 
  Prepared Statement of Ron Armstrong, Manager, Port of Gold Beach, OR
    Mr. Chairman: The Port of Gold Beach and its five member Port 
Commission were created by an election held within the Port district on 
August 30, 1955. The following names identify the present day Board of 
Commissioners: Scott Boley, President; Gary Combs, Vice President; Doug 
Danville; Secretary; Ted Ferguson; Commissioner; Ted Burdett, 
Commissioner. Prior to the election of September 3, 1954, the Federal 
Rivers and Harbors Act authorized the construction of two jetties at 
the mouth of the Rogue River. (Attached drawing of vicinity map, 
jetties and harbor access channel, page 4, figure 1, project location.)
    The existing dredging budget for the Rogue River bar channel 
entrance and the boat harbor entrance is $1,153,000. The 1998 budget 
was cut 35 percent, leaving $746,000 which is about enough to dredge 
out the bar. We are asking you to add $407,000 back into the 1998 
budget. The boat harbor channel entrance must be dredged every year in 
order to maintain commerce and trade at our port facility. We 
anticipate needing at least $334,000 in dredging funds for the boat 
harbor channel entrance and the rest of the money will be needed to 
dredge out the Rogue River bar. In the past, the City of Gold Beach has 
been a timber dependant community. Since the demise of the timber 
industry, we have experienced a depressed economy. The Port Commission 
has worked diligently on economic diversification projects and is now 
remodeling the Cannery and negotiating leases to establish new 
businesses on Port property.
    The Port Commission is able to create jobs, enhance the economic 
base of the community and put people back to work. Our economy is still 
substantially dependent, either directly or indirectly upon marine 
activities.
    Congressional support for continued maintenance dredging for this 
port and city is necessary in order to maintain a stable economy and 
enable us to move forward with our existing projects. The Port 
Commission continues to support the federal operation and maintenance 
dredging for Oregon Ports. A continuing O&M program insures job 
retention and future economic growth of not only this community, but 
other coastal communities, as well. Words alone cannot express how 
valuable the subcommittee's ongoing commitment is to our local economy.
    The Port Commission enjoys a great partnership arrangement with the 
U.S. Army Corps of Engineers. Last year, their dredge, Yaquina, dredged 
out the federal navigation channel at the Rogue River bar. Shoaling at 
the boat harbor channel was contracted out to a private contractor. The 
Corps also used their dredge, Sandwick, to disperse some of the 
shoaling in the channel. In 1993, the Corps of Engineers conducted a 
reconnaissance study of the Port's federal navigation channel into the 
boat harbor. This study called for relocating the channel 900 feet away 
from an area of intense shoaling. The COE's report stated the annual 
operations and maintenance costs of this new channel would be 
approximately $5,000 instead of $334,000 or more that is now being 
spent. The Port of Gold Beach has filed an application to obtain grant 
funds to assist the Corps of Engineers in this channel relocation 
project. (Attached is pertinent data from COE report and funding source 
total project page 5, alternate 1 new channel.)
    In December 1996 and January 1997, the pile dikes located at the 
South Jetty at the boat harbor channel entrance were destroyed and 
washed out to sea during the severe winter storms. According to the 
COE's 1994 Pile Dike Reconnaissance Report, the pile dikes reduced 
shoaling at approximately 65 percent at the boat harbor channel. The 
cost to replace the two upstream pile dikes as presently designed was 
calculated by this study to be $994,000. The boat harbor channel would 
still be in the same location with its intense shoaling. This is not 
cost effective and the Port Commission will continue to work with the 
COE to relocate the channel before it completely shoals in again.
    On behalf of the Commission of the Port of Gold Beach, I 
respectfully submit this statement before the subcommittee to request 
support for its continued maintenance dredging of shallow draft ports. 
The dredging of the federal navigation channel through the Rogue River 
bar and the federal navigation channel into the boat harbor is 
essential for businesses dependant on maritime commerce and trade. The 
Rogue River ranks number three out of the top fifty highest use water 
bodies statewide. (See attached table, Oregon State Marine Board, 1996)
    I believe that some day the boat harbor channel will be relocated 
as mentioned in my statement, cutting dredging costs from approximately 
$334,000 to about $5,000 a year. Until this project is completed, I 
believe we are going to continue to need the $1,153,000 as approved in 
this year's 1997 budget, again in 1998. We are asking you to add 
$407,000 back into the Rogue River's 1998 budget.
    I want to thank you for giving me the opportunity to submit this 
written testimony. If anyone has any questions or concerns about this 
statement, please do not hesitate to contact me or any member of the 
Port Commission.
                                 ______
                                 
Prepared Statement of Donald G. Mann, General Manager, Port of Newport, 
                                   OR
    Thank you for this opportunity to provide written testimony to the 
Committee regarding appropriations for fiscal year 1998 on issues that 
are important to the Port of Newport, the State of Oregon and our 
region.
    First, we would like to thank members of Congress for their support 
in recent years for funding improvements to the North Marina Breakwater 
in Yaquina Bay, including a show of commitment for $500,000 toward 
repairing the existing structure. I will comment further on the status 
of this project later in my testimony. The new 180 foot extension to 
this facility is scheduled to start construction the first of October 
and will provide added protection to Newport's commercial fishing fleet 
and to our port docks. Also, we appreciate your efforts to place 
Weather Buoy 46050, or the Stonewall Banks Buoy, back in service, 
providing critical weather information to both commercial and sport 
fishermen.
    About the Port of Newport: Commerce through the Port's Newport 
International Terminal in recent years has been forest products, 
primarily private logs to the Pacific Rim and lumber to domestic 
markets. As is the case with a number of Pacific Northwest ports, log 
exports across Newport docks has decreased over the past decade. 
However, the Port has renewed its lease with Caffall Bros. Forest 
Products and entered into a new lease with a second exporter, Citifor, 
Inc. Citifor is presently installing a log debarker on Port land to 
provide a more marketable product overseas. As a result, a modest 
increase is expected in the near term at Newport International 
Terminal.
    In view of the changing timber markets and declines because of 
resource availability caused by log export restrictions from public 
sources, harvest cutbacks for environmental reasons, and an increased 
domestic demand for saw logs, the Port is aggressively seeking other 
opportunities such as the import of domestic logs from Alaska, and pulp 
and chips to supply mills in our region. In addition, a Port 
representative recently traveled to the Russian Far East on a mission 
to promote Oregon food products and establish Newport as an eastern 
service terminal.
    To further identify all possible opportunities, as well as 
constraints, for diversifying cargo and uses at Newport International 
Terminal, the Port is currently conducting a comprehensive market 
study. This study is funded through the timber initiative process, old 
growth diversification funds, state planning and marketing dollars, and 
local contributions. The findings of the market study will lead to the 
selection of a preferred plan for redevelopment, and associated 
preliminary engineering costs are to be included. The outcome of this 
project will help the Port respond to maritime markets, expand on 
marine-related uses, and redevelop facilities to meet short and long 
term needs.
    As an active member of the Pacific Northwest Waterways Association, 
the Port endorses the organization's programs, policies, and goals on 
issues significant to the Northwest.
    Following are transportation issues of particular importance to the 
Port of Newport, the state and the region:
Public dredge fleet
    The Port of Newport strongly advocates preserving the U.S. Army 
Corps of Engineers minimum dredge fleet at a level that assures the 
best combination of public investment and private entrepreneurial 
opportunity, and consistent with federal emergency response 
capabilities. The Port contends that the reduced days allotted the 
public fleet does not always afford the Corps dredges to operate at 
their most efficient level. The Corps has proved to be very responsive 
to our needs in years past when emergencies arose. The Dredge Yaquina 
was quickly dispatched in each instance averting possible closure of 
the entrance channel to deep draft shipping. Therefore, we urge the 
Committee to make no further reductions in the number of dredges in the 
public fleet or cut back their days of operation.
    Along these same lines, we urge Congress to seek a dependable 
funding source to pay for the maintenance of channels and harbors. The 
Harbor Maintenance Trust Fund provides the means to assure such funding 
to address both routine maintenance as well as unexpected dredging 
needs. We recognize that the Trust Fund helps to carry a large and 
growing surplus and that the Court of International Trade has declared 
the Tax to be unconstitutional as applied to exports. We believe that 
it is possible to achieve a balance between the need for adequate 
funding for dredging and a fee that is not overly burdensome on 
importers and exporters.
North Marina breakwater--Operations and Maintenance
    As I mentioned earlier, the new extension to this 50-year old 
facility will be constructed beginning this Fall. Since 1997 federal 
appropriations were considered, the Corps investigated the integrity of 
the existing breakwater at length. They have determined that the 2,600 
foot long wooden structure needs to be completely replaced. A 30-day 
Public Notice, along with the draft environmental assessment, was 
issued March 13, 1997, detailing the proposed replacement project. It 
is the Corps' intent to apply the $500,000 in this year's budget toward 
the purchase of materials. We support this approach and ask for your 
continued support for the completion of this project. Final costs to 
complete this much needed O&M project are currently being developed and 
a request for appropriation to allow work to begin in 1999 is expected. 
The maintenance schedule could take from one-to-two years to complete.
North jetty repair
    The Port would again like to bring this matter to your attention. A 
Major Maintenance Report done September 1994 recommends a ``Jetty 
Pullback Plan'' of approximately 350 feet from its 7,000 feet full 
authorized length; estimated repair cost then was $2.9 million. The 
Port of Newport does not support this recommendation but rather 
supports the recommended alternative design, or ``Composite Design,'' 
which would repair the north jetty to its full length. The initial 
costs of full length repair are considerably higher than the pullback 
plan, but the long-term costs are closer: $20.9 million ``Pullback'' 
versus $27.4 million ``Full Length Repair.'' The $6.5 million 
difference equates to an annual cost of about $130,000 or $16,250 per 
vessel call (based on a low of 8 vessels per year). We believe safety 
should be a prime concern, not only for marine trade but for the 
commercial fishing industry. Safe passage across this bar at all times 
of the year is vital to the lives of individuals who are dependent upon 
the ocean for transportation and income.
Stonewall banks buoy
    Newport commercial and sport fishermen are grateful this weather 
buoy was recently placed back in service. Unfortunately, according to 
the National Data Buoy Center in Mississippi, field maintenance of this 
equipment is not funded, and the buoy is expected to only function from 
1\1/2\ to 2 years. Other than this buoy, the nearest sources for 
comparable weather information is at the mouth of the Columbia River 
near Astoria, Oregon, 300 miles west of Astoria, and 250 miles west of 
Coos Bay. Weather Service officials have said that using the other 
buoys to predict weather off Newport is like depending on weather 
forecasts in Portland to determine Newport conditions. State 
Representative Terry Thompson, a Newport commercial fisherman, has 
said, ``The cheapest way truly is to put that buoy out there, because 
the other alternatives cost people their lives and cost time and money 
for search and rescue missions. You won't know directly that buoy 
helped, but trust me, the fishermen that use it, we know it helps.''
    In closing, I thank you again for this opportunity to bring before 
you issues not only important to our immediate Port District but 
important to maritime transportation in the Pacific Northwest.
                                 ______
                                 
 Letter From Ron Nelson, Secretary-Manager, Central Oregon Irrigation 
                                District
                        Central Oregon Irrigation District,
                                       Redmond, OR, March 26, 1997.
Hon. Pete Domenici,
Chairman, Subcommittee on Energy and Water Development, Committee on 
        Appropriations, United States House of Representatives, 
        Washington, DC.
    Dear Chairman Domenici: I am writing to respectfully ask for your 
help in the funding in fiscal year 1998, of Public Law 104-208, 
Division R. Title III. Sections 301(b)(3) and 301(h) authorizes $1.0 
million in fiscal year 1998 to he administered through the Bureau of 
Reclamation.
    The above referenced authorization has established, in Oregon, a 
private non-profit Deschutes Basin Working Group, d.b.a. the Deschutes 
Basin Resources Conservancy. The conservancy is made up of a diverse 
group of directors that are developing non regulatory, market based 
solutions to natural resource issues.
    The law provides for 50/50 cost sharing with landowners or other 
agencies on voluntary projects that will result in increased water and 
improved water quality in the Deschutes Basin of Central Oregon.
    For the past 17 years I have managed the 10,000 member Central 
Oregon Irrigation District. During that time I have been involved with 
various regulatory efforts to address complicated natural resource 
issues. I have also witnessed failed attempts by the Courts to deal 
with these same issues.
    Beginning in 1992, the Warm Springs Tribe, the Environmental 
Defense Fund and the irrigation districts started experimenting with 
pilot projects that have resulted in this legislation.
    In my opinion, this legislation offers us the best hope of 
successfully bringing about improvements in our River Basin while 
respecting our economic interests in the resource.
    You will be receiving much more detail about our group from other 
interested parties in our area. However, I felt it was important to 
share with you my interest, and to encourage you to support the funding 
of this initiative.
            Yours very truly,
                                                Ron Nelson,
                                                 Secretary-Manager.
                                 ______
                                 
 Prepared Statement of Caleb Shields, Chairman, Assiniboine and Sioux 
                  Tribes of the Fort Peck Reservation
Fiscal Year 1998 Appropriations Request
    The Assiniboine and Sioux Tribes of the Fort Peck Reservation 
respectfully request $240,000 to continue planning of the Fort Peck 
Reservation Municipal, Rural and Industrial Water System in Montana.
    The Tribes appreciate your work by this Subcommittee on the project 
previously. In fiscal year 1993 and fiscal year 1994, $350,000 were 
appropriated, and in fiscal year 1992 $210,000 were appropriated. The 
funds appropriated in earlier years were sufficient to continue the 
planning investigations through fiscal year 1997. The funds were line 
items in the Bureau of Reclamation General Investigations budget.
    The funds requested for fiscal year 1998 will be used to continue 
pre-authorized studies of the Project within the Fort Peck Indian 
Reservation and to incorporate studies from off the reservation. With 
fiscal year 1997 funds, we are completing into a Final Engineering 
Report. The Fort Peck Tribes urge the Subcommittee and its staff to 
inquire of the Bureau of Reclamation respecting the capability of the 
Tribes to effectively utilize the fiscal year 1998 funds.
Water Quality of Existing Drinking Water Supplies and Needs
    The geologic setting of the Fort Peck Indian Reservation is 
comparable to the rest of Eastern Montana, North Dakota and South 
Dakota. Specifically, the deep groundwater of the Fort Peck Indian 
Reservation, flows into a sink that has collected water for eons. This 
deep water contains chemicals that do not drain away making of a brine 
several times more concentrated than sea water.
    Consequently, the nearer surface groundwater is the source of most 
community and rural drinking water supplies. However, this groundwater 
is derived from precipitation that is filtered through marine shales. 
As result, the quality of this water is worse or comparable to that of 
the other projects that the Subcommittee is currently funding: 
Garrison, WEB, Mni Wiconi and Mid-Dakota. We have attached for the 
Committee's consideration Table 1 which compares water quality of 
communities within the proposed Fort Peck Project with water quality of 
communities in other projects authorized or pending before Congress. As 
Table 1 clearly shows, the general quality of the water as measured by 
total dissolved solids and sulfates is comparable or worse in the Fort 
Peck area.
    The feature of this Project (within the reservation and outside it) 
that makes it cost effective is proximity to the Missouri River. The 
Missouri River is the southern boundary of the Fort Peck Indian 
Reservation. Our design population of 19,902 persons (13,900 within the 
reservation) can be served with short pipeline distances extending 75 
miles from the treatment plant at the most distant locations. Most of 
the demand lies within a 30-mile distance from the treatment plant. The 
Tribes have committed a portion of their water right in the Missouri 
River to be used for this Project, both on and off the Reservation. The 
Tribes are willing to contribute this resource to ensure that the 
citizens of northeast Montana have safe drinking water.
Accomplishments with Prior Appropriations
    The Assiniboine and Sioux Tribes are working closely with the 
Bureau of Reclamation and leaders from the communities and water user 
groups in Roosevelt, Sheridan, Daniels and Valley counties outside the 
Fort Peck Indian Reservation in the conduct of the planning studies.
    The Tribes have prepared detailed cost estimates to help water 
users and communities outside the Fort Peck Indian Reservation in an 
evaluation of the costs of participating in the Project and improving 
drinking quality.
    The total Project cost within the reservation, sized to carry off-
reservation water demands, is $114 million. Assuming a cost share of 75 
percent federal and 25 percent local, consistent with the Safe Drinking 
Water Act and comparable projects funded by the Subcommittee, the local 
cost share would be $5 million and the total Federal cost would be $109 
million.
    The cost of annual operation and maintenance of the facilities of 
the Fort Peck Tribes to deliver water to off-reservation communities is 
estimated at $1.12 per thousand gallons. Off-reservation users will 
have additional costs to operate and maintain off-reservation 
transmission and distribution facilities. Those costs are being 
determined. We are confident that it will compare favorably with Mni 
Wiconi costs of $1.46 per thousand gallons and Mid-Dakota costs of 
$2.50 per thousand gallons. Construction and annual operation, 
maintenance and replacement costs appear low enough to justify 
enlargement of Fort Peck facilities to carry off-reservation demands.
Fiscal Year 1998 Studies Will Assist Off-Reservation Communities and 
        Rural Water Users
    The purpose of the fiscal year 1998 request ($240,000) is for 
continued planning studies that will incorporate the Fort Peck Indian 
Reservation and off-reservation cost estimates. Specific technical 
objectives with fiscal year 1998 funds will be completion of Class I 
cultural resources inventory; wetlands inventory; incorporation of off-
Reservation construction, operation, maintenance and replacement costs; 
and coordination with all interests to work out implementation details, 
including funding and cost shares.
    Based on the findings of our studies, the Fort Peck Tribes will 
continue meeting with officials of the State of Montana, local 
communities and other interests to define the Project off the 
reservation, given the probable construction costs and the costs of 
operating the facilities. Public involvement undertaken last year by 
the Fort Peck Tribes will be continued. Interest in the Project off the 
reservation is high for the reason that all residents of this area have 
extremely poor water quality. Communities around the eastern, western 
and northern boundaries of the Fort Peck Indian Reservation rely on 
groundwater, which is poor and comparable to groundwater supplies on 
the Fort Peck Indian Reservation.
    The Project will benefit the regional health and economy. 
Recognizing the importance of the Project, the 1997 Montana legislature 
appropriated $65,000 to assist with off-reservation cost-estimating and 
planning of the Project.
Project Authorization Sought
    The Montana delegation plans to introduce a bill to authorize this 
important Project very soon. We are building relationships throughout 
the region, determining the interest of those outside the reservation 
and developing final planning studies in an effort to develop a cost 
effective Project with a cost sharing formula for off-reservation 
facilities that is acceptable to the Administration, the Congress, the 
Tribes and the State.
    The assistance of the Subcommittee with fiscal year 1998 
appropriations in the amount of $240,000 will go far in assisting the 
Tribes in this worthwhile Project. Not only will the drinking water 
supplies of the region be markedly improved, the tribal membership will 
benefit from the employment and earnings during construction, and we 
can continue work side-by-side with our northeast Montana neighbors to 
develop a quality Project for the improvement of the health and economy 
of all.
                                 ______
                                 
  Prepared Statement of Ron Sims, King County Executive; Jane Hague, 
  Council Chair; Louise Miller, Council Vice Chair, Metropolitan King 
                           County Council, WA
    Mr. Chairman, Members of the Subcommittee, this statement is made 
by Ron Sims, King County Executive; Jane Hague, Chair Metropolitan King 
County Council; and Louise Miller, Vice Chair Metropolitan King County 
Council. We appreciate the opportunity to submit this testimony on 
behalf of King County. Specifically, we would like to request your 
assistance with the following funding priorities in the Energy and 
Water Development Appropriations Bill for fiscal year 1998.
    First, under the Corps of Engineers, Section 1135, we request your 
support for an allocation of $400,000 to fund the feasibility phase of 
the Hiram M. Chittenden Locks Fish Passage Project. King County has 
agreed to be the local sponsor for this project; it will likely be 
joined by the City of Seattle, the Muckleshoot Indian Tribe and others 
as co-sponsors. Over the past year, the County and other local 
governments, particularly those participating in the Lake Washington/
Cedar River Watershed Forum, have worked with the Corps of Engineers to 
develop alternatives for improving fish passage through the Locks for 
outmigrating salmonids. Through this cooperative effort it has become 
clear that some very significant, near-term opportunities exist to 
reduce injury and mortality rates for outmigrating fish, including 
steelhead and sockeye, coho and Chinook salmon (the last two of which 
are under consideration for listing as threatened or endangered species 
under the Endangered Species Act).
    Specific improvements that have been discussed include: installing 
one or more permanent ``smolt slides'' at the spillway gates of the 
Locks; installing a surface water collector or other means to keep 
smolt from entering the main lock chambers; and, implementing 
operational and structural improvements to the main chambers and their 
filling systems to reduce injuries for those smolt that might still 
pass through them. King County hope to have these improvements made as 
quickly as possible, and therefore we are seeking a specific allocation 
for the Chittenden Locks Fish Passage Project from within the funds 
made available by the Committee for the Section 1135 program.
    Second, under Corps of Engineers, Section 1135, we request your 
support for an allocation of $1,425,000 for the Bear Creek Fish and 
Wildlife Restoration Project. The feasibility study is anticipated to 
be completed in November of this year, and plans and specifications can 
be completed and construction commenced in fiscal year 1998.
    Bear Creek drains 51 square miles in Snohomish and King Counties, 
and enters the Sammamish River three miles downstream of Lake Sammamish 
in the City of Redmond. Bear Creek produces the greatest number of 
sockeye salmon in the Sammamish Watershed. In the 1960s, the Corps of 
Engineers channelized and riprapped the lower 3,000 feet of Bear Creek 
as part of the Sammamish River Channel Improvement Project for flood 
control. Excavated material from the channel filled adjacent wetlands, 
and now the lower 3,000 feet of the creek is a narrow, fast-flowing 
channel, no longer suitable for salmon spawning, rearing, and winter 
refuge.
    The Bear Creek 1135 project seeks to recreate a natural stream and 
floodplain by excavating meanders into the lower 3,000 feet of Bear 
Creek, and excavating up to ten acres of valley floor to reconnect the 
stream and the floodplain and reestablish wetlands. Your support for 
this important project would be greatly appreciated.
    Third, under the Corps of Engineers, Section 1135, we request your 
support for a specific allocation of $750,000 for the Green/Duwamish 
Ecosystem Restoration Project. This request should not be confused with 
the on-going Duwamish/Green River Basin Fish and Wildlife Restoration 
project, which King County also supports and for which the Corps of 
Engineers is seeking $252,000 in the fiscal year 1998 budget request. 
The funding requested under the Section 1135 program is an outgrowth of 
this on-going study; the additional $750,000 is being requested in 
order to jump-start several of the highest priority fish and wildlife 
restoration projects that the Corps of Engineers and the County have 
identified as part of this on-going study. King County believes it is 
important to initiate work on the highest priority projects in the 
Green/Duwamish watershed in order to demonstrate on-the-ground 
successes as quickly as possible. The projects that would be funded in 
fiscal year 1998 would seek to address the most critical habitat needs 
in the watershed, and your support would be greatly appreciated.
    Fourth, under the Corps of Engineers, Section 205, we request your 
support for a specific allocation of $100,000 for the Snoqualmie River 
Flood Control Project in the report to accompany the Energy and Water 
Development Appropriations bill for fiscal year 1998. The project is 
being jointly sponsored by the Corps of Engineers, the City of 
Snoqualmie and King County.
    This project seeks to develop a solution to flooding above 
Snoqualmie Falls, one of the most severe flooding problems in all of 
King County. Annual average flood damages are estimated at over $1 
million, while damages from major flood events, such as the ones we 
experienced in November of 1986 and November of 1990, can exceed 
$10,000,000 to $15,000,000. Given the high priority of this project, 
King County again requests that the project receive a specific 
allocation by the Appropriations Committee to ensure that the Corps has 
the necessary resources in fiscal year 1998 to enable the agency to 
continue to make progress on this important study.
    Fifth, under the Corps of Engineers, Section 1135, we request that 
the Committee allocate $148,000 for the Sammamish River Weir 
Restoration project. The current weir, which was constructed to provide 
flood protection from a 40-year springtime flood event, is 
approximately 12 feet wide and only one foot deep. The shallow depth of 
flow through the notch during summer low water conditions, combined 
with the extensive human disturbance from the adjacent park surrounding 
the weir, have been determined to hinder the upstream migration of 
fish, especially salmon, that spawn in the upper watershed.
    The project calls for the weir to be redesigned to deepen and 
narrow the notch, concentrating flows to increase the depth and 
velocity and thereby improve fish passage. A plunge pool will be 
created in the river below the weir to provide a place for migrating 
fish to rest prior to crossing the weir. Access to the river will also 
be controlled and riverbank vegetation will be restored for 1,500 feet 
upstream. Plans and specifications on the project are expected to be 
completed in May of this year, and the project will be ready to 
construct in fiscal year 1998. The total construction cost is estimated 
at $197,000, and the $148,000 requested will allow full funding of the 
project and construction to be completed in fiscal year 1998.
    Sixth, and finally, under the Bureau of Reclamation, General 
Investigations, we request your support for an allocation of $300,000 
for a study of water reuse opportunities in King County, Washington. 
The funds would be used to prepare a study of potential indirect 
potable reuse for the region, including opportunities along the 
Duwamish River and in the Lake Washington watershed. The study would 
explore receiving water quality requirements, corresponding reclamation 
facility process requirements, alternative treatment technologies, and 
recommendations for specific reuse facilities. Water reuse has enormous 
potential benefits, and it is an important new area for the County to 
consider in the development of a comprehensive water resources plan.
    Mr. Chairman, Members of the Subcommittee, on behalf of 
Metropolitan King County, we would again like to express our 
appreciation for this opportunity to testify, and ask your support for 
the County's priorities in the Fiscal Year 1998 Energy and Water 
Development Appropriations Act.
    Thank you for your consideration.
                                 ______
                                 
  Prepared Statement of Zach Willey, Senior Economist, Environmental 
                              Defense Fund
                                summary
    The Deschutes Basin Working Group, dba the Deschutes Basin 
Resources Conservancy (DRC), is a non-profit private corporation 
established in Oregon in 1996. In September, 1996, Congress enacted and 
the President signed Public Law 104-208, which included S. 1662, the 
Oregon Resources Conservation Act. Section 301(h) (Division B, Title 
III) of Public Law 104-208 authorizes $1.0 million per year through 
2001. Section 301(b)(3) states that ``the Bureau of Reclamation shall 
pay from funds authorized under subsection (h) of this title up to 50 
percent of the cost of performing any project proposed by the Working 
Group and approved by the Secretary, up to a total amount of $1,000,000 
during each of the fiscal years 1997 through 2001.''
    The DRC is governed by a diverse group of directors from private 
and public interests from the region. It is a community-based, 
cooperative endeavor that believes economic progress and natural 
resource conservation need to work together to achieve success. The DRC 
seeks voluntary actions based upon contracts and compensation for 
property and services. The DRC does not seek, nor is it authorized, to 
impose regulatory mandates through legal or political action.
    The Environmental Defense Fund (EDF) is a national non-profit 
organization with over 250,000 members. EDF is dedicated to solutions 
to environmental problems using economic and market-based incentives. 
EDF is supportive of the mission, goals, and governing structure of the 
DRC. We believe that the DRC's success is critical not only to the 
future of the economy and environment of Central Oregon, but also to 
that of many other river basins. The DRC is a unique institutional form 
of private-public partnership that can, through its successful 
operation, demonstrate to other river basin communities a means of 
solving conflicts between economic and environmental aspirations. EDF 
supports the appropriation of $1.0 million in fiscal year 1998 for 
federal agencies in the region to cost share with the DRC in funding 
ecological restoration projects to startup this important new 
initiative.
                               background
    In 1989, the Environmental Defense Fund (EDF) and the Confederated 
Tribes of the Warm Springs Reservation began a cooperative project to 
reconcile on-reservation ecological and economic conflicts. A team was 
assembled to asses the reservation's environmental problems, to 
integrate responsibilities within tribal agencies, and to address 
issues of tribal sovereignty and primacy.
    In late 1992, the Tribes and EDF expanded the scope of the project 
to include the entire Deschutes Basin. It was agreed that the initial 
focus would be on river flows and water pollution. Flow-deficient 
stream reaches and excessive water pollutant loads could only be 
mitigated by identifying and reducing existing water diversions and 
pollution discharges. At the same time, a high value was placed on 
being ``good neighbors'' to other landowners and resources users within 
the Basin. Positive incentives for changes in resource uses were 
emphasized instead of costly and divisive political and legal 
conflicts.
    To facilitate discussion with resource users, EDF and the Tribes 
complied a database on ecological conditions in the Basin. Scattered 
sources of hydrology, water quality, water rights and uses, land uses 
and cover, demographics, and economic activities had never been 
analyzed for the Basin as a whole. Using the tribe's Geographic 
Information System, these data provided a picture of the Basin's 
existing and emerging ecological problems. Solutions employing economic 
incentives, such as water rights and pollution allowance marketing, 
were introduced and experiences elsewhere in the West were reviewed.
    A key forum for this community dialogue--the ``Ad Hoc Deschutes 
Group''--was formed in 1992 by EDF and the Tribes. The group convened 
occasionally to consider a broad array of natural resource issues 
involving instream flows and water quality degradation in the Basin. 
The irrigation community holds the most water rights and reservoir 
storage and therefore has the greatest impact among resource users on 
the pattern and amount of river flows. At the same time, water quality 
degradation stems from a diverse set of land uses driving nonpoint 
water pollution. The 14 member Ad Hoc Group had representatives of all 
economic sectors in the Basin.
    An important part of the project was to assure that the federal 
interests in the Basin are addressed along with those of the tribes, 
resource users, and local and state governments. Administration and 
Congressional officials were briefed by a delegation from the Basin in 
1994.
    The Ad Hoc Group had discussed alternative institutions, existing 
or new, that could address the Basin's interrelated natural resource 
issues. The need was recognized for a private organization with 
ecosystem-determined goals and methods based on positive incentives, 
consensus, and local governance. Since approximately half of the 
Basin's land area is managed by federal agencies it was clear that such 
a private organization would need the capacity to partner projects with 
the federal agencies to be truly ecosystem and basinwide in scope. In 
March, 1996, Senator Hatfield introduced S. 1662 authorizing federal 
agencies to work with this private organization, known as the Deschutes 
Basin Working Group. Title III of the Oregon Resource Conservation Act 
of 1996, signed by the President in September, 1996, authorizes the 
following:
  --Federal agencies to work with the private Deschutes Basin Working 
        Group, dba Deschutes Basin Resources Conservancy (DRC)
  --Secretaries of Interior and Agriculture to appoint DRC board 
        members for 3 year terms
  --Federal participation with DRC in ecological restoration projects 
        on federal and non-federal land and water with 50-50 cost share
  --Five year startup authorization of $1.0 Million a year federal 
        fund; 50-50 cost share with DRC
  --Emphasize voluntary market-based economic incentives
    The Deschutes Basin Working Group, later to adopt an operating name 
of the Deschutes Basin Resources Conservancy (DRC), has the goal of 
implementing on-the-ground projects that enhance the quality of the 
region's natural resources and add value to its economy. The DRC 
believes that economic progress and natural resource conservation must 
both be accommodated to benefit the Basin and its residents. The DRC is 
a community-based, cooperative endeavor. Its dealings are businesslike, 
seeking voluntary actions based on contracts and compensation for 
property and services.
    The DRC is a unique private-public partnership. It is a private 
corporation created under Oregon State law and will be a tax-exempt 
organization under section 501(c)(3) of the Internal Revenue Code. Its 
board consists of nine members from the Basin's private sector; 
hydropower, livestock grazing, recreation/tourism, timber, land 
development, irrigation (2), environmental (2), and two members form 
the Confederated Tribes of the Warm Springs Reservation. In addition to 
the private board members there are two board members appointed from 
the Departments of Interior and Agriculture, two board members 
representing the State of Oregon, and four members representing local 
governments within the Deschutes Basin.
    The DRC will receive funds through tax exempt donations from 
individuals, businesses, and corporations, including philanthropic 
foundations, and from government agencies seeking project development 
assistance or collaboration. It will seek to develop income from direct 
sources such as fee-for-service. The DRC will focus on projects in the 
Deschutes Basin--from tributary headwaters to the Columbia River--that 
involve long-term physical investments, natural resources management 
contracts, or individual transactions in tangible assets. Examples 
might include investments in reforestation or rangeland management that 
would yield habitat and ecological benefits as well as long-term timber 
or grazing returns. Individual transactions might include conservation 
easements on ecologically-valuable property, water rights trading to 
enhance river flows, or pollution reduction crediting for watershed 
health improvements.
Federal Appropriations in Fiscal Year 1998 for the DRC--An Investment 
        in Central Oregon, in Federal Agencies' Future Role, and in 
        River Basin Management
    The DRC has a foundation enabling it to make a substantial 
contribution toward meeting the region's economic and ecological 
challenges. The potential for the DRC to marshal significant and 
ongoing resources and cooperation is great. The engagement of private 
sector interests in the design, funding, and implementation of 
ecological restoration efforts is an important precedent to help 
relieve federal budgetary requirements under a variety of programs and 
responsibilities. The DRC's combination of private and local interests 
with those of the federal agencies provides an opportunity to explore 
the cooperative sharing of authorities and responsibilities. The DRC 
represents a new institutional approach to river basin management that 
will be applicable to other river basins throughout the nation, 
particularly in the western regions.
                                 ______
                                 

           SOUTHEAST U.S. WATER RESOURCE DEVELOPMENT PROJECTS

 Prepared Statement of Ralph O. Clemens, Jr., President, Coosa-Alabama 
                     River Improvement Association
                                summary
    Mr. Chairman and distinguished Committee members: This statement 
includes the following:
    (A) A plea to exercise caution and due deliberation before reducing 
funds for our Nation's transportation system;
    (B) A request for support in the following areas:
  --O&M funding for the Coosa-Alabama Basins as well as Mobile Harbor;
  --Funding for feasibility phase investigation of alternatives to 
        improve the reliability of the navigation channel below 
        Claiborne Dam on the Alabama River;
  --Reopening the Coosa Navigation Project;
  --Resisting any attempt to raise user fuel tax on the Inland River 
        navigation industry;
  --Ratifying the Interstate Compacts governing the management of water 
        resources within the Alabama-Coosa-Tallapoosa River Basin and 
        the Apalachicola-Chattahoochee-Flint River Basin;
  --Amending the Endangered Species Act of 1973 with reasonable and 
        effective measures to protect our citizens as well as the 
        environment;
  --Supporting the Sturgeon Conservation Plan in the Mobile River Basin 
        as developed by the Alabama-Tombigbee River Coalition and the 
        Fish and Wildlife Service.
                           expanded statement
    Thank you for the opportunity to present to this Subcommittee my 
perspective on several topics relating to our Nation's waterways system 
in general, and to the Coosa-Alabama River Basin in particular. As 
President of the Coosa-Alabama River Improvement Association, I speak 
for a large and diverse group of private citizens and political and 
industrial organizations who see the continued development of the 
Coosa-Alabama Waterway as an opportunity for economic growth in our 
region as well as the Nation.
    Our membership reflects a broad range of callings and professions, 
each with a well-defined interest in waterway development. Some use the 
waterway now, either as shipper or tow operator, while others are 
businessmen, bankers and a variety of other private individuals who 
have a stake in future economic development for their firms and 
successors to enjoy. Then there is a larger group of elected Officials 
and their constituents typical of the twenty-three municipalities and 
nineteen counties along the waterway who are members of this 
association. These members are working diligently to develop our 
waterway into a productive part of the river infrastructure of the 
State and Nation. Their efforts spring from a desire not only to 
improve the economic contribution of enhanced transportation available 
to users, but to provide a means of growth.
    As an association of businesses, municipalities and private 
individuals, we applaud efforts to reduce the Federal deficit through 
real spending cuts, but we need to be careful when cutting into the 
transportation infrastructure. Our inland waterways are vital to this 
Nation's welfare. America's ports, navigable waterways, flood 
protection, water supply, environmental restoration, hydroelectric, and 
other water resources programs enhance economic development, national 
security, and general well-being. These programs serve the national 
interest in countless ways, returning far more in public benefits than 
they cost. A top-notch navigation system that is able to meet the 
demands of both domestic and international commerce is a driving force 
behind the national economy, accounting for over 2.2 billion tons of 
the nation's internal and foreign commerce in 1995. Thus, this system 
links our producers with consumers not only in this country, but around 
the world. It is incumbent upon the Federal Government to maintain and 
improve this system of interstate commerce.
    Some think tanks are advocating turning the Corps of Engineers' 
Civil Works Program over to state or private managers. Again, we urge 
caution and due deliberation in such a move. Having one agency 
responsible for maintaining water projects on the Alabama River, for 
example, provides benefits that can't be measured in dollars and cents. 
Security, responsiveness and historical knowledge are incalculable to 
users of the river. The Corps' experience and the O&M funding that 
supports that experience are public investments in infrastructure. 
Slashing that investment does not automatically translate into private 
prosperity.
    We are concerned that any budget strategy that reduces funding for 
the operations and maintenance of inland and intracoastal waterways 
will have a detrimental effect on the economic growth and development 
of the river system. We cannot allow that to happen. In the Alabama-
Coosa River Basin, we must be able to maintain the existing river 
projects and facilities that support the commercial navigation, 
hydropower and recreational activities so critical to our region's 
economy. The first priority then must be the O&M funding appropriated 
to the Corps of Engineers to maintain those projects. Budget requests 
for the individual projects follow:

------------------------------------------------------------------------
                                            President's    Association's
                 Project                      budget      Budget request
------------------------------------------------------------------------
Alabama-Coosa River, AL \1\ (AL River                                   
 incl Claiborne L&D)....................      $4,903,000      $5,903,000
Miller's Ferry L&D \2\..................       5,835,000       5,835,000
Robert F. Henry L&D.....................       3,858,000       3,858,000
Mobile Harbor...........................      17,936,000      17,936,000
Lake Allatoona, GA......................       4,628,000       4,628,000
Carters Lake, GA........................       4,500,000       4,500,000
Lower Alabama Navigation Study (AL River                                
 south of Claiborne) feasibility study..         500,000  ..............
                                         ===============================
      Totals............................      41,660,000      43,160,000
------------------------------------------------------------------------
\1\ Includes dredging from the mouth of the Alabama River through       
  Claiborne L&D to Miller's Ferry. Coosa River not included.            
\2\ Includes $2.27 million to complete generator rewinding.             

    To attract new business into the Alabama River Basin, we must 
improve the infrastructure of the river itself, specifically the 
navigational reliability below Claiborne Dam. Increased reliability is 
the only way prospective investors will entertain establishing an 
industry that uses the river transportation. The Corps of Engineers 
currently maintains a 65 percent to 70 percent reliability through 
training dikes, reservoir management, and dredging. Of these measures, 
dredging is the most effective. Forecast requirements for navigation 
maintenance on the Alabama for fiscal year 1998 exceed the President's 
Budget request of $4.903 million. We ask the Subcommittee to increase 
the President's budget line for Alabama-Coosa River to $5.903 million 
to maintain the channel reliability below Claiborne Dam at its highest 
possible rate.
    The most effective long term solution to improving navigation 
reliability on the Lower Alabama is a lock and dam; however, a fiscal 
year 1996 Corps study determined that proposal is not economically 
feasible. The next best alternative is to improve the training dikes. 
(Training dikes are levees or barriers built out from river banks to 
direct the water flow into the navigation channel, thus increasing the 
depth.) Mobile District is prepared to conduct a feasibility study to 
determine the interest of the Federal Government in funding the 
project. Along with continued maintenance dredging and efficient 
management of upstream reservoirs, improved training dikes are the only 
way to improve the navigation reliability on the Lower Alabama River. 
We ask you to insert first-year funding of $500,000 to enable the 
Mobile district to conduct a feasibility phase investigation of all 
alternatives to improve the reliability of the Lower Alabama navigation 
channel.
    A major objective of our association is the completion of a 
navigable waterway from Mobile to Rome, Georgia. The history of the 
Coosa River Project is well known by this committee, but the proposal 
is in line with our emphasis on both infrastructure investment and the 
creation of jobs and economic opportunity throughout our region. The 
Pre-design Engineering Surveys are complete, so one of the most time-
consuming requirements of the project is already on-the-shelf. We are 
well aware of the restrictive funding for such undertakings in the 
current environment, but ask the Committee to recognize that the 
completion of such a project is one of the largest and most rapid 
generators of jobs currently available. We owe it to the people of the 
Coosa-Alabama River Basin, the states of Alabama and Georgia, and the 
entire region to maintain the vision of completing this waterway.
    Another mechanism to make the river system attractive to potential 
users is to keep the cost of shipping via waterways down. The 
President's Budget for fiscal year 1998 does not currently include a 
proposal to increase a user's fuel tax, but we are well aware some in 
the administration think such a tax is a good idea. We have in the past 
listed some of the negative aspects of such a proposal, so suffice it 
to say here that an increase in user fuel tax will have detrimental 
effect in the short run on consumer prices and trade balance, and in 
the long run on the federal-private partnership and maintenance of the 
waterways system. As one of the most efficient modes of transportation 
this country possesses, the waterway system needs more incentives for 
investment, not obstacles and disincentives.
    The Legislatures of Alabama and Georgia have recently passed an 
Interstate Water Compact establishing a commission to manage shared 
water resources in the Alabama-Coosa-Tallapoosa River Basin. That 
legislation, along with an identical compact negotiated with Florida 
for the Apalachicola-Chattahoochee-Flint River Basin, will be sent to 
Congress for ratification during this session. We urge complete support 
for both compacts, which set down a framework in which to allocate the 
precious water resources among the States and to settle disputes that 
may arise. The only alternative to these compacts is a protracted, 
costly battle in the courts, an alternative nobody wants.
    The last issue I wish to address is a plea based on our experiences 
over the past several years with attempts by the Fish and Wildlife 
Service to list the Alabama Sturgeon as endangered under the Endangered 
Species Act of 1973. As you know, in December of 1994, the Secretary of 
Interior, Mr. Babbitt, decided not to list the Alabama Sturgeon, citing 
a lack of scientific evidence that the fish was a separate and distinct 
species or even currently existed in the habitat scrutinized. I won't 
go into the long, and often bewildering, story that evolved before Mr. 
Babbitt's decision, but I want to emphasize the potentially devastating 
effect possible when one agency, such as Fish and Wildlife Service, 
becomes the prosecutor, judge, jury and executioner of any proposal 
under the Endangered Species Act. There is no balance in the system. 
Economic and social factors are not even considered until a listing is 
made. History has shown us that, despite assurances of ``no effect'' or 
``minimal impact'' on economic and operational consideration associated 
with a listing, the opposite has often been the case. The economic and 
social factors, prepared by a body separate but equal in authority to 
FWS, must be addressed during the proposal stage, not after a listing 
is approved. The Secretary of Interior, or whoever makes the final 
decision, must have all of the pros and cons of a proposal before 
deciding what is best for the people affected by such a proposal. 
Therefore, we fully support amending the Endangered Species Act to 
reflect the provisions I have just described.
    In the meantime, the Fish and Wildlife Service, in cooperation with 
the Alabama-Tombigbee River Coalition, has drafted a Sturgeon 
Conservation Plan, outside the auspices of the Endangered Species Act, 
that has the strongest potential to propagate the Sturgeon population 
in the Mobile River Basin. We strongly support this plan as an example 
of the compromise required in the environment-economic debate. We ask 
the Congress to fully fund and support the Sturgeon Conservation Plan 
as the best way to save the Sturgeon in the Mobile River Basin.
    In closing, we request your support in the following areas:
  --O&M funding for the Coosa-Alabama Basins and Mobile Harbor;
  --Funding for investigating the feasibility of improving the 
        reliability of the navigation channel below Claiborne Dam;
  --Reopening the Coosa Navigation Project;
  --Resisting any attempt to raise user fuel tax on the Inland River 
        navigation industry;
  --Ratifying the Interstate Water Compacts negotiated among Alabama, 
        Georgia, and Florida;
  --Amending the Endangered Species Act of 1973 to require an economic 
        analysis during listing and to establish a balance to the 
        prosecution of a listing;
  --Supporting the Sturgeon Conservation Plan as developed through the 
        cooperative efforts of the Alabama-Tombigbee River Coalition 
        and the Fish and Wildlife Service.
    We sincerely appreciate the opportunity to present our views and to 
thank you for your strong support of the Nation's waterways.
                                 ______
                                 
       Letter From W.O. Pace, Chairman, Autauga County Commission
                                 Autauga County Commission,
                                    Prattville, AL, March 17, 1997.
Hon. Pete V. Domenici,
Senate Subcommittee on Appropriations for Energy and Water Development, 
        U.S. Senate, Washington, DC.
    Dear Senator Domenici: This letter is to inform you that the 
Autauga County Commission, Autauga County, Alabama, supports the U.S. 
Army Corps of Engineers request for funding for fiscal year 1998 to 
operate and maintain water projects in the Alabama-Coosa River Basin. 
There is a definite need to improve navigation reliability on the lower 
Alabama River for economic development reasons, i.e., decreasing 
tonnage on the river because of the meandering of the river, sharp 
turns and low water below Claiborne Dam; also, there has been a dearth 
of industries seeking to relocate within the River Basin. Therefore, we 
need to improve the navigational reliability below Claiborne Dam and 
maintain and improve training works and dredging. Economic development 
between Montgomery and Mobile depends on these improvements. The Corps 
is able to maintain a authorized nine foot channel 65 to 70 percent of 
the time, but major problems occur during July through September.
    Barge costs on the Alabama River are higher than other waterways. 
Shippers use barges in one direction only, but pay for travel both ways 
because there is no backhaul available and there is not enough industry 
in the Basin to warrant two-way shipping. Ninety four percent of tons 
moved on the Alabama River are downbound. For these reasons, shippers 
have found other modes of transportation or left the Basin altogether. 
Adding to the costs the shippers have faced are delays caused by the 
shallow water depth. Also, after 1991, environmental attacks on sand 
and gravel businesses shipping by barge were so costly, a lot of these 
businesses closed. Lowered freight rates provide a better export 
market, thus helping the trade business. Waterways provide efficient 
transportation that tends to lower inflation. Congress must support the 
Interstate Compacts to resolve the two-basin water disputes among 
Alabama, Georgia, and Florida. Also, if Congress would amend the 
Endangered Species Act to include reasonable, balanced measures between 
environmental concerns and economic development instead of such 
stringent regulations, this would greatly improve economic development.
    We would sincerely appreciate your help in this matter that is so 
vital to the State of Alabama.
            Sincerely,
                                                W. O. Pace,
                                                          Chairman.
                                 ______
                                 
 Letter From Randall L. George, President, Montgomery Area Chamber of 
                                Commerce
                       Montgomery Area Chamber of Commerce,
                                    Montgomery, AL, March 12, 1997.
Senator Pete V. Domenici,
Senate Subcommittee on Appropriations for Energy and Water Development, 
        U.S. Senate, Washington, DC.
    Dear Senator Domenici: This letter offers the strongest support 
possible of the Coosa-Alabama River Improvement Association's effort to 
secure funding for a feasibility study of ways to improve navigation 
reliability on the Alabama River below Claiborne Dam. We know, for a 
fact, that major companies looking to relocate and/or expand often 
exclude Montgomery, and, in turn, Alabama, as a direct result of 
problems on our ``navigable'' rivers. On several occasions, 
international industrial companies trying to locate in our state have 
gone elsewhere because of channel depth and obstruction hindrances.
    The U.S. and Alabama need these jobs. We would greatly appreciate 
your support of the fiscal year 1998 funding needed to find ways to 
alleviate the problems.
            Sincerely,
                                         Randall L. George,
                                                         President.
                                 ______
                                 
    Letter From James T. Jordan, Director, J.T. Jordan Cotton, Inc.
                                  J.T. Jordan Cotton, Inc.,
                                        Centre, AL, March 17, 1997.
Hon. Pete V. Domenici,
Senate Subcommittee on Appropriations for Energy and Water Development, 
        U. S. Senate, Washington, DC.
    Dear Senator Domenici: This letter is to let you know that I 
support the Coosa-Alabama River Improvement Association's funding 
request for fiscal year 1998 for the operation and maintenance of this 
water project.
    I also support the regional effort to improve and extend the Coosa-
Alabama Waterway. The economic development of river basin between 
Mobile and Montgomery depends on these improvements.
    In addition to the standard operation and maintenance requests, 
CARIA needs Congress to provide an additional $500,000 to fund a Corps 
feasibility study of ways to improve the navigation reliability below 
Claiborne Dam. Last year this request was cut during conference.
    We need to strengthen the ability of the Alabama River to 
contribute to the welfare of the citizens of the Basin.
    Thank you so much for you consideration in helping to appropriate 
funds for this project.
            Sincerely yours,
                                           James T. Jordan,
                                                          Director.
                                 ______
                                 
    Letter From Phillip A. Sanguinetti, President, The Anniston Star
                                         The Anniston Star,
                                      Anniston, AL, March 17, 1997.
Hon. Pete V. Domenici,
Senate Subcommittee on Appropriations for Energy and Water Development,
U.S. Senate, Washington, DC.
    Dear Senator Domenici: As part of a collective effort to maintain 
and extend the Coosa-Alabama Waterway, I wholeheartedly support the 
Coosa-Alabama River Improvement Association's funding request for 
fiscal year 1998.
    I strongly believe in and support the regional effort to improve 
and extend the Coosa-Alabama Waterway. This would include improving the 
navigational reliability below Claiborne Dam, maintaining and improving 
training works and dredging, which would enhance economic development 
of the river basin between Mobile and Montgomery.
    Also, I believe that lowered freight rates would provide a better 
export market, thus helping the trade business. I also urge Congress to 
support the Interstate Compacts to resolve the two-basin water disputes 
among Alabama, Georgia and Florida, as well as amend the Endangered 
Species Act to include reasonable, balanced measures between 
environmental concerns and economic development.
    Any support you and your committee can give the Association will be 
greatly appreciated by everyone involved.
            Very truly yours,
                                     Phillip A. Sanguinetti
                                                         President.
                                 ______
                                 
   Letter From Jamie D. Wallace, President, Salma and Dallas County 
                          Chamber of Commerce
               Selma and Dallas County Chamber of Commerce,
                                         Selma, AL, March 17, 1997.
Hon. Pete V. Domenici,
Senate Subcommittee on Appropriations for Energy and Water Development, 
        U.S. Senate, Washington, DC.
    Dear Senator Domenici: As one of the cities alongside the Alabama 
River, a part of the Coosa-Alabama System, we are strongly tied to 
development of this waterway and its continued viability.
    For many of the nation's waterways the past several years have seen 
a leveling off of tonnage; however, with economic indicators what they 
are and the rising costs of other type surface transportation we are 
convinced that water transportation will rebound strongly.
    We are pleased to support the funding request of the Coosa-Alabama 
Rivers System and to ask that additional attention be given to the 
problems which prevent this system from being as strong an industrial 
attraction as it logically should be.
    Without a reliable channel it is impossible for those of us in the 
mid-part of the state to sell river commerce to potential users. 
Projects down river in the Claiborne Dam area and near Mobile must be 
undertaken to provide relief for those of us up stream. This can be 
undertaken by increased efficiency of the training works already in the 
river and by continuing funding for maintenance dredging. It is also 
crucial that the system can be assured of sufficient releases of water 
from upstream reservoirs, something not yet possible.
    The Mobile District of the U.S. Corps of Engineers is ready to 
perform the needed maintenance work, but adequate funding is essential 
for them to do so.
    While we are aware that federal funds for river projects are 
especially tight as you struggle to balance the budget we believe 
financing of adequate infrastructure for the nation's commerce must 
have some priority. Thank you for considering this project.
            Sincerely,
                                          Jamie D. Wallace,
                                                         President.
                                 ______
                                 
Prepared Statement of James M. DeCosmo, Manager of Lands, Research and 
                   Procurement, Southeast Timberlands
    Kimberly-Clark (K-C), began operations in Mobile following its 
merger with Scott Paper in December of 1995. Scott Paper acquired the 
mill from Hollingsworth and Whitney in 1953 who built the facility in 
1940. Including the acquisition cost, K-C has invested over $2 billion 
in the Mobile Plant and support operations and is currently evaluating 
a proposal to allocate $200 million in Pulp Mill Capital upgrades. 
These investments represent an average annual capital investment of $50 
million in Mobile.
    A significant factor in the approval of capital invested in Mobile 
is the cost of manufacturing pulp, which is approximately 50 percent 
wood cost. As you may well know, Kimberly-Clark's transportation system 
is responsible for transporting approximately 80 percent of the wood 
requirement to Mobile and is a significant component of the existing 
and long-term fiber procurement strategy.
    For the past fourteen years, Kimberly-Clark has continuously 
utilized the Warrior-Tombigbee Waterway, Coosa-Alabama River System, as 
well as the Port of Mobile. In 1983, the first year K-C shifted from 
truck and rail to river transportation, some 1.06 million tons of 
forest products were transported with two tug boats and forty barges. 
Due to the efficiencies and reliability of the Waterways, K-C 
transported in excess of 3.5 million tons of forest products in 1996, 
1.1 million of which was exported to International Markets. To sustain 
marine operations at this level requires over 20 tug boats, 150 barges 
and over 250 jobs directly related to operations and maintenance.
    For K-C to operate on the Waterway requires operating expenses in 
excess of $13.5 million. These operating expenses are required to 
support a $28 million capital investment in wholly-owned woodyards and 
joint venture wood processing facilities.
    With this investment in Kimberly Clark's Southern Operations and 
the dependence on the Waterways, it is paramount that the river 
channels, locks and dams, bridges, harbors and all other elements of 
navigation be adequately maintained, upgraded and funded to meet the 
existing and future demands of the waterways and particularly the 
Coosa-Alabama River System.
    In consideration of the value of the river system and the 
importance of operational reliability, Kimberly-Clark unanimously 
supports and recommends funding at $5.9 Million for the fiscal year 
1998 Operations and Maintenance budget for the Coosa-Alabama River 
System and $23.2 Million for Mobile Harbor. In addition, $500 thousand 
is desperately needed to fund a study and initiate an upgrade to the 
training works on the lower reaches of the Alabama River. This section 
of the river has historically proven to be a difficult section to 
maintain channel width and depth during the summer and fall seasons.
    K-C in its entirety has been through significant changes in the 
last thirteen months with the completion of the Kimberly-Clark and 
Scott merger. As a result, K-C has transitioned into a multi-billion 
dollar packaged products company strategically focused on diapers, 
personal care products, consumer tissue and away-from-home products. To 
continue to be the market leader, all facilities and operations 
throughout the world must remain competitive, from the procurement of 
raw materials to the satisfaction of each and every customer.
    The Mobile operations have been and are committed to continue to be 
leaders in the K-C world. To help continue a position of leadership and 
a viable operation, future stability, and growth and development in all 
facets of manufacturing must continually improve. To remain a sound 
competitor in a highly competitive industry, it is imperative that the 
waterways continue to be adequately maintained and upgraded to meet the 
challenges tomorrow brings. The Warrior-Tombigbee and Coosa-Alabama 
River waterways are the ``Main Artery'' that support the Mobile Harbor, 
Kimberly-Clark's Southern Operations and the thousands of jobs directly 
and indirectly related to its business. These waterways and ports will 
play a significant role in K-C's future success.
    With these considerations in mind, we ask that you give the 
requested budgets and appropriations your full support.
    Thank you for your help, consideration and support in this matter.
                                 ______
                                 
Prepared Statement of Robert F. Henry, Jr., President, Robert F. Henry 
                           Tile Company, Inc.
    I urge the continued support of navigation on the Alabama River. 
The Coosa-Alabama River Improvement Association has done an excellent 
job of pointing out the numerous important benefits of a well 
maintained Alabama River to the citizens of this region. I concur.
    There is the particular need for insuring maximum reliability of 
the southern portion of the river for navigation.
    Please include these needs in the fiscal year 1998 budget.
                                 ______
                                 
 Prepared Statement of John B. Crowe, Executive Vice President/General 
               Manager, Alabama River Pulp Company, Inc.
    The Alabama River Companies of Claiborne join the Coosa-Alabama 
River Improvement Association's support of the U.S. Army Corps of 
Engineers' request to conduct a feasibility study to improve navigation 
of the Alabama River below the Claiborne Lock and Dam. We feel the 
$500,000 cost of the study would be a sensible investment in the 
economic growth of our state.
    We recognize that navigational improvements to the lower Alabama 
River will heighten reliability, decrease costs and increase 
navigational usage. Training and dredging efforts must be maintained 
and improvements extended to spur much-needed economic development in 
the river basin between Montgomery and Mobile.
    Growing environmental concerns could halt dredging and adversely 
impact economic opportunities for our state. The Corps of Engineers 
must be allowed to continue their job of managing the waterways.
    Alabama is blessed with abundant natural resources and the state's 
economic vitality is greatly influenced by its strong river systems. We 
must explore ways to best utilize, develop and manage our waterways to 
strengthen our economy and provide better jobs for our people. We urge 
you to provide this important project with the necessary funding.
                                 ______
                                 
    Prepared Statement of W.F. Joseph, Chairman, Montgomery County 
                       Commission, Montgomery, AL
    The Montgomery County Commission continues to closely follow the 
development of the Coosa-Alabama River project which was originally 
authorized by the Congress in 1945. We believe that the benefits which 
accrue to the citizens of this region, and to the nation, fully justify 
the complete construction and operation of this economical waterway.
    We fully support the testimony provided by the Coosa-Alabama River 
Improvement Association. For many years this group has represented us 
and they accurately reflect our feelings of support for this waterway 
project.
    Of particular interest to us is funding to operate and maintain 
(O&M) water projects in the Alabama-Coosa River Basin.
    Also, we feel that the requested appropriation to fund a Corps 
feasibility study of ways to improve the navigation reliability below 
Claiborne Dam will enhance the economic development of river basin 
between Mobile and Montgomery.
    We urge your favorable consideration of the recommended 
appropriations for fiscal year 1998. Adequate funding as requested is 
necessary to insure that progress is made for further development of 
the system and to properly operate and maintain the existing portion. 
Similar information has been sent to Honorable Joseph M. McDade, 
Chairman, House Subcommittee on Appropriations for Energy and Water 
Development, U. S. House of Representatives, regarding this matter.
                                 ______
                                 
    Prepared Statement of Robert M. Creswell, Consultant, Camden, AL
    As Reservoir/Resource Manager for the Corps of Engineers during the 
construction of the recreational facilities along the Alabama River 
during the period 1969 through 1984, I witnessed the growth of industry 
and commerce on and near the river and heard the assurances made that 
the navigable channel would be maintained at 9 feet.
    I fully support the Coosa-Alabama River Improvement Association's 
funding request for fiscal year 1998 since I have also witnessed the 
delays encountered by tows on the river due to unreliable channel 
depths below Claiborne Dam during the summer months. This has 
discouraged new industry along the waterway.
    The fiscal year 1998 Federal Budget should include $500,000 for 
Mobile District, Corps of Engineers to perform a feasibility study to 
determine the costs to improve the channel below Claiborne Lock and 
Dam, thus insuring the commitment made to the citizens and industry 
regarding the 9-foot channel will be fulfilled.
    The continued maintenance dredging and operation of the locks, 
powerhouses and recreational facilities are needed to make good the 
promises made under the River and Harbor Act.
    In addition, Congress should support the Interstate Compacts to 
resolve the water disputes between Georgia, Alabama and Florida to 
insure adequate water for the three states in the future.
    Likewise, support should be given to amend the Endangered Species 
Act to include reasonable, balanced measures between environmental 
concerns and economic development in the area.
    Your consideration of the above measures is requested and will be 
appreciated by residents of this area.
                                 ______
                                 
  Prepared Statement of John P. Carey, Chief Administrative Officer, 
               Alabama State Docks Department, Mobile, AL
            operating and maintenance funding, mobile harbor
    Each year as we prepare testimony to your committee, the validity 
of the partnership between the Federal Government (U.S. Army Corps of 
Engineers, COE) and the State of Alabama (Alabama State Docks, ASD) is 
reestablished. The reliability of the Mobile Harbor Federal Project, 
resulting from the exceptional maintenance program conducted by the 
Mobile District COE, has enabled ASD and the inland water system 
servicing Alabama and the surrounding states to experience record 
levels of commerce. In addition, it has allowed the tidewater 
communities of southern Alabama to continue to compete at the national 
and international level for plant expansion and new site location.
    ASD is the local cost sharing sponsor for the Project. We are a 
State Agency, but we are revenue based and receive no State Tax 
funding. In the seven years since the COE and ASD partnered to deepen 
the main channel of the Project from 40 ft. to 45 ft., the annual 
revenues of ASD have increased by over 50 percent to $62 million on a 
cargo value of $3.2 billion. In a just released study conducted by the 
Center for Business and Economic Research of the University of South 
Alabama on the impact of ASD on Alabama's economy, it was determined 
that almost 120,000 jobs statewide were engaged in producing, 
transporting or providing export/import services for products that are 
shipped through ASD. In the early 1990's, a similar study estimated 
that such services resulted in an economic impact of $1.3 billion.
    This latest study sets the total wage impact at $3.0 billion. It is 
estimated that if all of the tidewater industries in the Port of Mobile 
were to be factored into this study, the above impacts would be 
increased by some 20 to 25 percent.
    This growth has not come without significant investment and 
increased expenses. In the past year, ASD had its annual expenses grow 
to the high $50 million range. We have built approximately $50 million 
in new infrastructure and have increased our bonded indebtedness by 
over 50 percent--to an amount in excess of $150 million. In addition, 
industries which have elected to locate on ASD property are continuing 
to construct or expand their infrastructure at a rate in excess of that 
of ASD.
    In testimony last year, we identified two potential opportunities 
to achieve a cost reduction in the expenditure of federal funds for the 
maintenance dredging of the Federal Project. One was through a federal 
legislative change that would allow the COE to investigate alternative 
dredge material disposal options consistent with environmental 
concerns. Appropriate language was included in the Water Resources 
Development Act (W.R.D.A.) of 1996. The Mobile District Office is 
currently investigating at least one such alternative. The second 
opportunity was the design and installation of mid-channel sumps to 
improve the efficiency of the dredging process. Additional federal O 
and M funding will be necessary to implement this option.
    The Mobile Harbor Federal Project has been fortunate to escape the 
direct impact of catastrophic events since the late 1970's--mid 1980's. 
As a result, the District has been able to reduce its annual 
maintenance budget requirement from $22 million (1991) to an average of 
just under $18 million. We have, however, in two of the last three 
years, been impacted as a result of flooding on the mainstem of the 
lower Mississippi River. Specifically, private industry dredges, under 
contract to the Mobile District and working on our Project, have been 
diverted to combat shoaling at the mouth of the Mississippi. As this 
testimony is being prepared, severe flooding is occurring on the Ohio 
River and will most likely result in maintenance dredging problems that 
will severely test the capability of the total dredging fleet. The COE 
must be prepared and allowed to mobilize its hopper dredge fleet 
rapidly lest the capacity of Gulf Ports such as Mobile are excessively 
impacted.
    Given the above, we respectfully request that the proposed fiscal 
year 1998 COE budget request of $17.936 million for the Mobile Harbor 
be appropriated. In addition, ASD is in the process of seeking 
authorization to extend its 45 ft. channel approximately 1,300 ft. to 
service a new $100+ million Direct Reduced Iron (DRI) Plant on the 40 
ft. channel. Upon authorization, ASD will fund the new construction 
provided the federal government will reimburse ASD consistent with 
current cost sharing provisions.
    This incremental construction cost is estimated at less than $0.5 
million and will produce an annual benefit in excess of $3.0 million. 
Finally, ASD seeks the funds to establish the mid-channel sumps that 
the COE anticipates will result in more efficient and cost effective 
dredging maintenance of the Project. This cost is estimated at 
approximately $4.5 million. Therefore, ASD respectfully requests that 
the COE be funded up to $22.5 million for the Mobile Harbor Federal 
Project for fiscal year 1998.
    As was noted earlier, the Port of Mobile is the major (only) deep 
water port of the State of Alabama and surrounding states serviced by 
the inland waterway systems. The systems of the Coosa-Alabama, the 
Black Warrior-Tombigbee, the Tennessee, the Appalachicola-
Chattahoochee-Flint, the Tennessee-Tombigbee and Gulf Intercoastal 
Waterway comprise 1,438 miles of navigable water in the State of 
Alabama alone. The Tennessee-Tombigbee in particular not only links 
Alabama to the majority of national inland waterway systems, it also 
provides the only alternative for water borne commerce when the Lower 
Mississippi River experiences either flood or drought conditions.
    Failure to fully maintain these water systems is critical to 
interstate and international commerce of mid-America and Southeastern 
Gulf States. It is essential that waterways be funded at the fiscal 
year 1998 COE budget request level. In addition, the Tennessee-
Tombigbee funding level must be no less than its fiscal year 1997 
budget level.
    The Alabama State Docks again thanks your Committee for its long 
history of support of our Community, State and the Southeastern United 
States as we compete in the international market place and enhance the 
quality of life of the citizens of the State of Alabama and the region.
                                 ______
                                 
Prepared Statement of Sheldon L. Morgan, Warrior-Tombigbee Development 
                              Association
                summary of the fiscal year 1998 request
    The following is a summary of the funding requests for the U.S. 
Army Corps of Engineers for fiscal year 1998 to meet the needs of the 
Warrior-Tombigbee Waterway, and which we ask the Committee to approve:

Warrior-Tombigbee Waterway:
    Operations and Maintenance Funds included in Corps' 
      Budget Request (3 percent under fiscal year 1997 
      funding)..........................................     $16,200,000
    Funds for Additional Capability for O&M, not 
      included in Corps' Budget Request.................       4,000,000
                    --------------------------------------------------------
                    ____________________________________________________
        Total O&M Funds Required........................      20,200,000

    Other needs allied to the Warrior-Tombigbee are:

Mobile Harbor--Supporting request of the Alabama State 
    Docks:
    Operations and Maintenance..........................     $18,200,000
    Reimbursement for advanced funds to Corps for 
      channel extension.................................         500,000
    Additional capabilities for channel sumps...........       4,500,000
                    --------------------------------------------------------
                    ____________________________________________________
      Total.............................................      23,200,000

    We wish to highlight the item identified above as ``Additional 
Capability''. Since funds for this item would not normally be included 
in the Corps' Budget request, it is not likely that the committee has 
been informed of the essentiality of funding for this particular 
Additional Capability. In the absence of the Corps fiscal year 1998 
budget information at this time we are requesting the additional funds 
for continuing projects. We emphasize the need for additional O&M 
Capability funds if we are to have an adequate current year program, 
and to support on-going projects designed to improve safety and 
efficiency and to reduce future costs to the Federal Government. 
Projects to be funded from this request are continuing projects under 
the 20 year long range plan for improving the BWT, including certain 
equipment needs for handling emergencies, three remaining vital upland 
disposal sites which, when implemented, will help reduce annual 
dredging costs, mooring cells, a long range study of the waterway and 
other improvements.
    Written statements of support are attached.
                                 ______
                                 
    I am Sheldon L. Morgan, President of the Warrior-Tombigbee 
Development Association. Our members represent a broad cross-section of 
shippers, carriers, and the general business community in the Warrior-
Tombigbee basin in Alabama, and nine other states. The Association 
began in 1949 to work for the redevelopment of the Warrior-Tombigbee 
Waterway System. Construction of its original 17 locks and dams began 
in the late 1870's, and completed in 1915. The navigation system 
provided by these locks and dams had gradually deteriorated and, 
following World War II, the annual tonnage had leveled off at 2.5 
million tons, due to the condition and limited capacity of the obsolete 
locks. The Association began in 1950 to work with Alabama's 
Congressional Delegation and the Army Corps of Engineers to plan for 
modernization. Five new locks were built between 1954 and 1975. The 
last remaining old structure (Oliver Lock and Dam) was replaced in 
1992--the first under the Water Resource Development Act of 1986. The 
Warrior-Tombigbee Waterway now has modern and standard sized locks 
throughout its length. These six new locks replaced the seventeen old, 
turn-of-the-century locks, and today, this system represents a most 
noteworthy example of the positive impact of the Federal water resource 
development program. The most persuasive evidence of the validity of 
this project and the wisdom of those who made it possible comes from 
the record compiled during and following the investment in its 
redevelopment. During the economic studies which justified these 
investments, it was projected that by 1980, the Waterway would carry 
some eight million tons annually, producing a positive benefit to cost 
ratio. These levels were reached in 1966 and, by 1980, twice the 
projected tonnage was being moved. Traffic has since reached 25 million 
tons annually, a level three times that which had been projected. 
Clearly this has been a valid investment in infrastructure.
    Subsequently, due in large part to the federal investment in this 
waterway, several billion dollars have been invested by industry, 
agriculture and other non-Federal agencies, providing thousands of 
jobs. For example, the Alabama State Docks, as a result of a $300+ 
million expansion program, now offers the most advanced export coal 
handling technology available in this country, along with similar 
improvements for handling grain, bulk materials, steel and forest 
products. It is interesting to note that the investment by this one 
local agency exceeds the total Federal investment in building all the 
locks and dams on the entire waterway, including the new Oliver Lock. 
We are asking for the continuation of federal investments which have 
paid off many fold. The coal handling facility was recently expanded, 
representing an additional $14 million investment.
    This Waterway must continue to be efficient and reliable if its 
users are to remain competitive in world markets. Shipments of ore, 
steel, and related products have increased because of the new and 
modern U.S. Steel facilities in Birmingham, and a new British Steel 
mill at Tuscaloosa which is already being expanded. The efficiency and 
modernization of the waterway have been important factors in U.S. 
Steel's continuing investments to modernize its Fairfield mill. 
Fairfield is now again one of the bright stars in the USX crown. Recent 
investments substantially exceed $1 billion. The new British Steel mill 
surpassed $100 million in initial investment, and an additional $154 
million is now underway. This mill utilizes the river southbound for 
export, as well as northbound for raw materials and domestic sales of 
finished product. Hence there is a favorable impact on the balance of 
payments which will be further enhanced by the current expansion. 
British Steel is constructing a $100 million Direct Reduction Iron 
Plant at Mobile to ship production on the Black Warrior-Tombigbee to 
Tuscaloosa Steel.
    Major facilities for mining, manufacturing, forest products and 
marine equipment account for well over another $1.5 billion in recent 
investment. A new underground coal mine alongside the Warrior River has 
begun operation with a planned annual production rate of some four 
million tons. This will be among the largest underground mines in the 
United States. It is a world class facility and its low sulphur coal 
will move through an adjoining barge loading facility. Coal also moves 
out of Kentucky to electric generating plants on the BWT. There are new 
facilities at the Port of Mobile, which handle more forest products 
than the total handled by all other Gulf Coast ports. The efficiency 
and reliability of the waterway are key factors in the development and 
competitiveness of these facilities, upon which thousands of jobs 
depend.
    These are but examples of how this waterway is so central to the 
economy of this entire area, impacting both domestic and international 
markets. Attached with this statement are letters further highlighting 
this importance. These represent a broad cross-section of the economic 
heartbeat of an entire region. Throughout these statements you will 
find repeated references to the importance of confidence in the 
waterway to the willingness of business and industry to continue to 
invest in our area and of their customers to depend on its reliability 
for the movement of their products. Please note the wide range of 
interests represented by these statements: financial institutions; 
public utilities; port facilities; coal mining, both deep and surface; 
manufacturers; suppliers; marine interests; petroleum and chemical 
processors and general business.
    We are hopeful the President's recommendation for O&M funds plus 
some add-ons for additional capability be provided for the Warrior-
Tombigbee Waterway to help us catch up on deferred projects. This would 
be realistic funding which we will support as absolutely essential to 
day to day activities of the O&M program, and with good management it 
will allow for the continuation of several on-going projects which are 
near the point of culmination, following several years of 
investigation, design and now beginning the actual work. These projects 
address long-standing problems and have required extensive research and 
coordination and reflect excellent teamwork by the Corps and the 
industry. But for the support of this committee, they would not be 
nearing reality. I wish to emphasize that this level of funding is the 
minimum essential level.
    Mr. Chairman, we look forward to working with this Committee. You 
should be advised that industry and the Corps of Engineers in the 
Mobile District have developed a true partnership and enjoy the finest 
of professional and mutually supportive relationships. From this have 
come both short and long range programs which have provided a basis for 
orderly progress toward keeping the Waterway efficient and reliable. 
The funding requirements to which I have referred stem from work we 
need to continue now under these programs. I respectfully repeat that 
the performance of this waterway in successfully handling a level of 
tonnage some three times the projections made during its design, attest 
to your foresight and support of this Committee.
    To summarize and close our testimony, the Warrior-Tombigbee 
Waterway is a classic example of the positive aspects of the Civil 
Works Program. The Congress has seen its potential and has supported 
its development. And now the project continues to demonstrate its 
worth. Investment and expansion continue locally.
    During the severe drought in 1988, this waterway operated normally 
and with the Tennessee-Tombigbee connection provided an alternate route 
for cargo unable to move otherwise. There are large, national carriers 
now operating regularly on the Warrior-Tombigbee and Tennessee-
Tombigbee as a result of their 1988 experience.
    This appeal by the Warrior-Tombigbee Development Association for 
funding Operations and Maintenance of the Black Warrior-Tombigbee 
Waterway System by the Congress for fiscal year 1998 is being made 
without knowledge of the President's budget recommendations. Normally, 
the Administration's budget will have been presented by the time the 
Subcommittee holds its hearings for public testimony. Since this is not 
the case, it is necessary to consider the historical records of the 
Corps of Engineers in maintaining navigation in past years as well as 
the important infrastructure projects which have been deferred for one 
reason or another. Those projects deferred are elements of a long range 
strategic plan by this Association and the Corps developed over time to 
improve the efficiency and safety of the Waterway.
    The Warrior-Tombigbee Development Association request for 
Operations & Maintenance funding in fiscal year 1998 for the Black 
Warrior-Tombigbee Waterway in the amount of $16.2 million. This is 3 
percent under fiscal year 1997 funding (an administration goal) for the 
normal O&M work, this is the minimum to keep navigation capability at a 
nominal level. However, additional capability of the Corps is important 
to the continuing improvements that have been deferred. These include 
upland disposal sites, mooring cells, certain equipment at locks, a 
long range study of future needs and demands and other vital 
improvements totaling $4.0 million. Therefore, our request is for a 
total of $20,200,000 for fiscal year 1998.
                                 ______
                                 
Prepared Statement of James A. Vann, Jr., President and Chief Executive 
              Officer, Alabama Electric Cooperative, Inc.
                         background information
    Alabama Electric Cooperative, Inc. (AEC) is a wholesale power 
supplier for 21 member-owners located in central and south Alabama and 
northwest Florida. The member-owners serve over 300,000 consumers. AEC 
operates the Charles R. Lowman Power Plant, located at Milepost 89.5 on 
the Tombigbee River, as well as a compressed air energy storage plant, 
the McIntosh Plant which impacts the amount of coal required at the 
Lowman Plant. Also, AEC has a site on the Black Warrior-Tombigbee River 
which is a possible location for a future base-load fossil fired 
generating plant.
                   statement of interest and support
    AEC joins the collective effort to improve the efficiency and 
reliability of the Warrior-Tombigbee Waterway because of the lower fuel 
transportation costs which the waterway provides to AEC's Lowman 
electric generating plant. The Black Warrior-Tombigbee Waterway (BWT), 
the Tenn-Tom Waterway, and the Port of Mobile are vital to our delivery 
of coal economically and efficiently to this plant, which is located on 
the Tombigbee River near Jackson, Alabama. During calendar year 1996, 
we shipped 1,103,919 tons of coal via the BWT and for 1997 we have 
purchased in excess of 1,200,000 tons of coal which will be delivered 
via the Tenn-Tom Waterway and the BWT.
    Because delivered coal cost is such an important factor in our 
ability to maintain competitive rates to our member systems, AEC 
supports the Warrior-Tombigbee project and level funding in the Corps 
of Engineers' budget request. In addition, AEC supports the critical 
needs identified by the Corps which have been deferred for the past two 
years.
    In addition to the dependency which AEC has upon the BWT, there are 
benefits to our region and our end customers as a direct result of a 
viable BWT waterway and the Port of Mobile. These systems provide an 
invaluable link between our region and the world markets. As such, they 
stimulate the region's economy, provide jobs and help reduce the trade 
deficit.
  specific benefits of the warrior-tombigbee waterway and the port of 
                             mobile to aec
    The amount of coal moved to AEC's Plant Lowman by barge on the BWT 
for the past five years is as follows:

        Year                                                    Tons    

1992.......................................................... 1,114,742
1993..........................................................   866,731
1994.......................................................... 1,077,485
1995..........................................................   874,044
1996.......................................................... 1,103,919
                    --------------------------------------------------------------
                    ____________________________________________________

      Total................................................... 5,036,921

    The savings in transportation costs represented by the above 
tonnage exceeds $25 million compared to AEC's next viable option of 
delivery via rail.
    AEC plans to move a minimum of 1.2 million tons of coal via the BWT 
in 1997, and we project our usage of the waterway to remain at this 
level or increase in the next ten years. We have evaluated imported 
coal on several occasions, and the economics have been improving. Thus, 
we see the potential for the use of the Port of Mobile in conjunction 
with the BWT in delivering coal for our future needs.
             statement with regard to appropriation amounts
    AEC supports near level funding ($16.2 million) for Operation and 
Maintenance in the Corps of Engineers' fiscal year 1998 Budget. We view 
this as a minimum requirement in that this level of O&M funding is 
necessary to cover the minimum expected needs within the Mobile 
District for fiscal year 1998. Further, this amount represents a 2.5 
percent reduction in the requested amount from the previous year's 
budget request by the Corps.
    In addition, the Corps has the opportunity to move forward on 
projects which have been deferred over the past two years. Since there 
are no new construction needs for the BWT, AEC supports funding of 
these projects which total $4,000,000.
    AEC also supports the appropriation of adequate O&M funds of $23.2 
million for Mobile Harbor.
                               conclusion
    We appreciate the opportunity to submit a statement on behalf of 
our member owners in central and south Alabama and northwest Florida 
pertaining to the benefits of the BWT waterway and the Port of Mobile. 
AEC and its member owners fully support the Corps of Engineers' 1998 
budget request for $16.2 million in operations and maintenance funds 
for the BWT waterway, $23.2 million for Mobile Harbor O&M, as well as 
the appropriation of an additional $4 million in funds for deferred 
projects which the Corps is in a position to complete. While we are 
well aware of budget constraints, we believe these projects should be 
funded at these levels to assure a viable transportation system. With 
the money that has already been spent in construction of the BWT 
transportation system, proper funding for operations and maintenance 
is, in our view, prudent management of what is undoubtedly a national 
asset.
                                 ______
                                 
 Letter From Roy F. Etheredge, Senior Vice President, Alabama Gas Corp.
                                          Alabama Gas Corp.
                                  Birmingham, AL, January 30, 1997.
Hon. Pete V. Domenici,
Chairman, Subcommittee on Energy & Water Development,
U.S. Senate, Washington, DC.
    Dear Senator Domenici: I am writing you in support of fiscal year 
1998 funding for the Corps of Engineers for the Black Warrior-Tombigbee 
Waterway and the Mobile Harbor. The Warrior-Tombigbee Waterway is vital 
to the economic health of Alabama. Our basic industries such as mining 
and heavy metals depend on an efficient water transportation system. 
Adequate funding for operations and maintenance is important in order 
to avoid interruptions to the flow of river traffic.
    Several projects have been deferred by the Corps the past 3 years 
due to lack of funds and we encourage you and your committee to 
consider an additional $4,000,000 for these activities, i.e., upland 
disposal dikes and mooring cells.
    We support the Warrior Tombigbee Development Association's request 
for appropriations in the following amounts:

                        [In millions of dollars]

Corps of Engineers O&M Budget.....................................  16.2
Request for additional capabilities...............................   4.0
Funds for Mobile Harbor...........................................  23.2

    Thank you for your consideration.
            Sincerely,
                                          Roy F. Etheredge,
                                             Senior Vice President.
                                 ______
                                 
  Prepared Statement of Lynn Sherrill, Vice President of Operations, 
                             Crounse Corp.
    Maintenance and improvements to the Warrior-Tombigbee Waterways and 
Mobile Harbor are a matter of vital interest to our Company. Crounse 
Corporation has, since 1990, barged approximately one million tons of 
coal per year from the Upper Ohio Valley to locations on the Black 
Warrior River and Mobile, Alabama area.
    In 1995, we began moving coal from the upper reaches of the Black 
Warrior to destinations in the Ohio Valley and hope this becomes a 
steady movement. We have found the Warrior-Tombigbee Waterway to be our 
highest cost operating area, and can ill afford to have the system 
deteriorate below its present level, because of reduced maintenance 
funding.
                                 ______
                                 
 Letter From Ronald C. Dansby, President, Inland Division, Kirby Corp.
                                       Kirby Corp.,
                                  Inland Chemical Division,
                                    Houston, TX, February 26, 1997.
Hon. Pete V. Domenici,
Chairman, Subcommittee on Energy Water Development,
U.S. Senate, Washington, DC.
    Dear Chairman Domenici: This letter is sent to you on behalf of 
Kirby Corporation. We are a major diversified water carrier that 
provides service to the public through the transportation of all types 
of bulk liquid and dry cargoes. We have 2,000 afloat and shore based 
employees. Our area of operations is the inland waterway system of the 
United States and the Gulf of Mexico. We have operated on the Warrior 
Tombigbee system for many years. Kirby is one of the largest users of 
the Tennessee-Tombigbee Waterway since its inception. Our major 
customers include the Monsanto plants at Decatur, Alabama, Amoco, and 
Novacor.
    We join with President Sheldon Morgan of the Warrior-Tombigbee 
Development Association in urging your support of the U.S. Corps of 
Engineer's budget. We feel the additional funds are necessary to keep 
the system reliable and efficient.
    I am aware that you face many hard decisions in seeking to balance 
the budget. Please remember that in 1988 this country experienced one 
of the worst droughts in history. The Mississippi River reached its 
lowest level in recorded history. Barging came to a virtual standstill 
on that waterway. During that critical time, Kirby was able to shift 
its tows that nominally operate down the Mississippi River to the 
Warrior-Tombigbee system; thus preventing many of our customers from 
running out of products and closing down their plants. In the course of 
that one summer alone, it was calculated the economical savings paid 
for the entire Warrior-Tombigbee project. This country can ill afford 
for this waterway to deteriorate.
    We appreciate your consideration of these budget requests that are 
of such vital importance to our company and industry.
            Very truly yours,
                                          Ronald C. Dansby,
                                        President, Inland Division.
                                 ______
                                 
   Prepared Statement of James C. Ludwig, President, Domestic Sales, 
                       Drummond Coal Sales, Inc.
    The Drummond Company, Inc., as one of the largest coal producers in 
Alabama, has a vital interest in the continued availability and use of 
the navigable waterways in Alabama. Our company (and many others) and 
the economic viability of the Southeast has been positively impacted by 
the Warrior-Tombigbee System and the Port of Mobile. This must 
continue.
    The company's Shoal Creek Mine, has its principal shipping outlet 
at Mile Post 372 on the Black Warrior River. The success of this 
project (one of the newest and largest underground mines in the U.S.); 
our other existing mines and barge loading facilities now so heavily 
dependent on water transportation to be competitive; and the numerous 
associated jobs for Alabamians would be jeopardized absent the 
availability of an efficient, well maintained, and fully operational 
waterway system.
    As you consider the funding needs of the Corps of Engineers, we 
strongly urge appropriation of at least $16.2 million for fiscal year 
1998 for the day to day Operation and Maintenance of the Warrior-
Tombigbee system and to continue the needed improvements in the 
approaches to the bridges and Jackson and Naheola. We also support 
adequate O&M funding for Mobile Harbor. Lastly, and in addition to the 
above, we urge appropriation of an additional $4,000,000 for projects 
that have been deferred.
                                 ______
                                 
 Prepared Statement of G. Edison ``Ed'' Holland, Jr., Vice President, 
  Power Generation/Transmission and Corporate Counsel, Gulf Power Co.
    Gulf Power Company is an investor-owned electric utility serving 
approximately 331,000 customers in the Northwest Florida area. Our 
Company utilizes coal for over 95 percent of its total generation 
requirements. Coal consumption for 1996 totaled about 5,000,000 tons. 
More than half of this coal was delivered using waterborne 
transportation.
    Historically, Gulf Power has moved millions of tons of coal over 
the Tennessee/Black Warrior/Tombigbee Waterways or through the Alabama 
State Docks at the Port of Mobile. Currently, we are shipping a major 
portion of our requirements through the Port of Mobile. The flexibility 
of receiving our fuel supply over these waterways is an essential 
element in providing our customers with reliable electric service at 
the most economical cost.
    Since Gulf Power depends on these waterways, we support the Black 
Warrior-Tombigbee Development Association in its effort to obtain 
funding for maintenance of the waterway system, and ask that you give 
full consideration to the testimony of the Association.
    Specifically, we would ask that you approve the Corps of Engineers 
(Corps) operating and maintenance budget request of $16.2 million for 
the Black Warrior-Tombigbee Waterway for fiscal year 1997.
    We also support adequate funding for maintaining the Mobile Harbor 
($23.2 million), and funding needed for improvement projects to 
optimize waterway efficiency. The Corps has deferred $4.0 million in 
such project funding over the past three years.
    The availability of these waterway systems doesn't just benefit 
Gulf Power Company's fuel procurement program. They significantly 
contribute to the economic viability and future industrial growth of 
our service area and the entire region. We believe it is in the 
national interest to maintain their integrity, and hope you will 
support their funding.
                                 ______
                                 
 Letter From William Carr, President and Chief Operating Officer, Jim 
                         Walter Resources, Inc.
                                Jim Walter Resources, Inc.,
                                  Birmingham, AL, February 5, 1997.
Hon. Pete V. Domenici,
Chairman, Subcommittee on Energy and Water Development,
U.S. Senate, Washington, DC.
    Dear Senator Domenici: I would like to thank you for the 
opportunity to make a statement to your Subcommittee. Please accept 
this letter as my statement.
    The Mining Division of Jim Walter Resources, Inc. currently mines 8 
million clean tons of coal per year. Of that amount, nearly 60 percent 
of our production is exported. All of our export production goes 
through the Port of Mobile. Our payroll for 2,315 employees last year 
was in excess of $114,000,000 and taxes withheld and/or paid were in 
excess of $31,000,000. It is obvious from these facts and figures that 
this Company relies heavily on our waterways and port facilities and 
that they are of the utmost importance to this Company, its employees 
and the economy of the State of Alabama.
    I strongly support the Corps of Engineers budget request for $16.2 
Million in Operations and Maintenance funds for the Black Warrior-
Tombigbee for fiscal year 1998, along with the request for $4 Million 
for the Corps to undertake projects which have been deferred over the 
past three years. I also support the appropriation of funds for Mobile 
Harbor, in the amount of $23.2 Million. Our waterways and port 
facilities provide economic prosperity to Alabama that is worthy of 
your support. Further, I support the statements and testimony to be 
given by Mr. Sheldon L. Morgan, President of the Warrior-Tombigbee 
Development Association. I believe that the value of improved 
efficiency and reliability of the Warrior-Tombigbee Waterway and Port 
of Mobile cannot and must not be underestimated.
    The world coal business is at its most competitive level in 
history. News of any problems, especially transportation and delivery 
problems, is quickly spread by other coal producers around the world to 
the buyers to discourage purchases here. A blemish on our delivery 
record can have devastating, long-term effects from which we might 
never fully recover. Buyers lost today may never return tomorrow.
    Again, thank you for this opportunity to give my comments on this 
very important matter.
            Yours very truly,
                                              William Carr,
                             President and Chief Operating Officer.
                                 ______
                                 
Prepared Statement of D.R. Jordan, President, Jordan Pile Driving, Inc.
    Jordan Pile Driving is a 50 year old heavy marine construction 
company. Our company has been positively impacted by the Warrior-
Tombigbee System and the Port of Mobile.
    As you consider the funding needs of the Corps of Engineers, we 
strongly urge appropriation of at least $16.2 million in support of the 
operations and maintenance budget request for fiscal year 1998. This is 
considered to be a minimum figure to meet anticipated expenses and 
problems.
    We additionally support adequate funding for operations and 
maintenance of the Mobile Harbor. This activity is critical to the 
growing development of trade within the southeastern United States.
                                 ______
                                 
Prepared Statement of David G. Howson, Vice President-General Manager, 
               River District, Martin Marietta Aggregates
    The commerce dependent upon the unencumbered navigation of the 
Warrior-Tombigbee Waterway and the Port of Mobile is a major factor in 
the economic well being of this region and the nation. Martin Marietta 
Materials supports the collective efforts of the Warrior Tombigbee 
Development Association, the U.S. Army Corps of Engineers and other 
user groups and governmental agencies to improve the efficiency and 
reliability of the Warrior-Tombigbee Waterway. Transporting products 
via these waterways is very cost effective, energy efficient and is of 
vital importance to the commerce of the region.
    Our company is the nations second largest producer of aggregate 
products used in construction and industrial applications. Annually our 
shipments exceed 1.0 million tons of product over and through the Port 
of Mobile and the Warrior-Tombigbee water system. This commerce 
provides jobs and tax revenues in many states and extends to other 
businesses involved in local towing, handling, stevedoring, trucking 
and many more industries in our region. Considering positive economic 
indicators, this trend should grow in the future. Any degradation to 
the efficiency of this waterway would have a profound negative economic 
impact on this area. As many as twenty direct jobs would be jeopardized 
if this means of transportation is not maintained.
    It is incumbent upon the U.S. Army Corps of Engineers to maintain 
and improve these waterways for our economic viability. I fully support 
and respectfully request that you approve funding for the Corps of 
Engineers Operations and Maintain Budget for the Black-Warrior-
Tombigbee Waterways, fiscal year 1998, of $16.2 million. It is also 
time to fund projects which have been deferred over the past three 
years but are vital to the continued improvement of the waterways. This 
will require additional funding of $4.0 million. This support also 
includes funding for Mobile Harbor in an amount of $23.2 million.
    We urge your support and approval of these vital funds and will 
follow the budget process with great interest.
                                 ______
                                 
 Prepared Statement of Mark K. Knoy, Senior Vice President, Marketing 
       and Operations, Marine Equipment Management Corp. [MEMCO]
    While making your decision on the appropriations of funds for the 
Warrior-Tombigbee Waterway, I would like you to please consider the 
following viewpoint from our company in the barge and towboat boat 
industry. As you well know, all modes of transportation of interstate 
commerce are in need of a solid and maintained infrastructure to ensure 
goods and services are delivered in a timely and secure fashion. The 
barge industry is by far no exception to this rule. Therefore, MEMCO 
would like to announce its support of an increase in funding for the 
further development and continued maintenance of the Warrior-Tombigbee 
Waterway.
    MEMCO has joined the collective effort of the Warrior-Tombigbee 
Association because of our interest in lowering operational costs, 
improving safety and increased customer satisfaction. Our company has a 
vested interest in the waterway as an infrastructure through which we 
deliver and pick-up all types of commodities such as wood chips, 
cement, coal, petroleum-coke, aggregates and fly ash. During the 
calendar year of 1996, MEMCO was able to generate $3.4 million in 
operating revenue through the use of this waterway. We have operated 
and developed an increased customer base on the Warrior-Tombigbee 
Waterway over the last six years. MEMCO has and will continue to have a 
long-term interest in the use of this waterway. If the quality of our 
country's infrastructure, such as the Warrior-Tombigbee Waterway, were 
to degrade due to a lack of funding, it would indeed have a great 
limitation on efficiency of MEMCO's operation and all interstate and 
international commerce originated and destined for this waterway.
    Considering MEMCO's vested interest in this waterway we would like 
to request the Corps Operations and Maintenance budget for fiscal year 
1998 to be $16.5. It has also been brought to our company's attention, 
that the Corps of Engineers needs to receive an additional sum of $4 
million for those projects which have been deferred over the last three 
years such as upland disposal dikes, mooring cells, and long range 
studies. MEMCO would also like for you to consider the appropriation of 
funds for Mobile Harbor, in the amount of $23.2 million dollars.
    If you would ever have any questions pertaining to our involvement 
upon the waterway or question our support, please give me a call at 
314-519-0500.
                                 ______
                                 
    Letter From Peter E. Hubbard, Senior Vice President, Sales and 
                  Marketing, Midland Enterprises, Inc.
                                  Midland Enterprises Inc.,
                                 Cincinnati, OH, February 10, 1997.
Hon. Pete V. Domenici,
Chairman, Subcommittee on Energy and Water Development, U.S. Senate,
Washington, DC.
    Dear Senator Domenici: I am writing to express my support for the 
continued maintenance and improvement of the Black Warrior-Tombigbee 
Waterway System.
    Midland Enterprises Inc. is one of the nation's largest barge lines 
and is a major user of the Warrior-Tombigbee System. Last year we 
transported approximately 1,700,000 tons of commodities on this 
waterway and an additional 2,800,000 tons through the Port of Mobile, 
including coal, scrap metals, grain and wood chips/lumber. These 
tonnage's are significant to the economies of the states in that 
region, from the points of view of both producers and consumers. 
Barging is a very low cost method of transportation, responsible for 
moving more than 15 percent of all of the United States total freight 
for less than 2 percent of the nations total transportation costs, 
which translates into savings for the consumer, such as lower rates for 
electricity.
    Another important aspect of the Warrior-Tombigbee System is that it 
provides the only alternative to the Mississippi River to move product 
to the Gulf Coast. This was extremely important during the drought year 
of 1988, when the lower portion of the Ohio River was closed for an 
extended period and the lower Mississippi River was severely restricted 
for approximately five months. The availability of the Warrior-
Tombigbee System allowed us to continue to serve utility and industrial 
customers and kept those customers from having to shut down operations 
because they could not receive raw material.
    Midland Enterprises Inc. fully supports and recommends 
appropriation of $16.2 million for operation and maintenance of the 
Black Warrior-Tombigbee System for fiscal year 1998. Furthermore, we 
recommend additional funding to permit the Corps of Engineers to 
proceed with some of the projects that have been deferred over the past 
three years, which total $4,000,000. These projects include upland 
disposal dikes, mooring cells and long range studies. All of these 
funds are necessary to assure that the Warrior-Tombigbee System remains 
an important part of the Inland Waterway System. Finally, we support an 
appropriation of funds in the amount of $23.2 million for Mobile 
Harbor. The Port of Mobile is an integral part of the waterway system, 
especially as an alternative origin to the Port of New Orleans. 
Improvement of the Mobile harbor will increase utilization of the 
Warrior-Tombigbee System overall and generate significant additional 
monies for the states in this region. We request your support in 
reviewing and approving these project funding limits for fiscal year 
1998.
                                          Peter E. Hubbard,
                        Senior Vice President, Sales and Marketing.
                                 ______
                                 
 Prepared Statement of Leon Hrabovsky, Superintendent, Mike Hooks, Inc.
    Mike Hooks Incorporated supports fully the Warrior-Tombigbee 
Waterway Project because it has provided our company with an average of 
$4 to $5 million of revenue annually for a number of years. A large 
majority of this revenue is returned to the community through labor, 
supplies, equipment, and fuel usage. Our company employs from 50 to 100 
employees from the local area during a normal dredging season.
    Our company recommends that the estimated $16.2 million in Corps of 
Engineers O&M budget for fiscal year 1998 be a minimum number for the 
operation and maintenance of this system. We also recommend that an 
additional $4.0 million be appropriated to fund projects that have been 
deferred over the past three years. Additional upland disposal areas 
are severely needed in our business to improve the cost and efficiency 
of dredging on the system.
    Mike Hooks Incorporated also supports the budget request of $23.2 
million for the Mobile Harbor operation and maintenance. The Mobile 
Harbor and Warrior-Tombigbee Waterway are two necessary links in the 
water transportation system for the State of Alabama and the 
surrounding area.
    We thank you for your time and consideration in this vital matter.
                                 ______
                                 
Prepared Statement of R.A. Guthans, President, Midstream Fuel Service, 
                                  Inc.
    Midstream Fuel Service, Inc. is an ardent supporter of efforts by 
the U.S. Army Corps of Engineers to maintain and improve both the Black 
Warrior-Tombigbee Waterway and the Port of Mobile. These assets are 
vital to the economic development and prosperity of the regions they 
serve and are crucial as major components of our nation's 
transportation infrastructure.
    Since completion of the Black Warrior-Tombigbee Waterway in 1984, 
Midstream has participated in the use of the system and has seen the 
many benefits that the waterway offers. As an operator of tank barges 
and petroleum terminals, the impact of the waterway is readily apparent 
to us through our customers and through contact with the many others 
who directly or indirectly benefit from the system.
    An appropriation of $16.2 million by the U.S. Army Corps of 
Engineers for the fiscal year 1998 is needed for maintenance and 
improvement projects of the waterway at a level near that of 1997. 
Additional improvement projects totaling $4 million have been deferred 
for the past three years. These projects should now be undertaken due 
to additional capacity of the Corps. Please carefully review the Black 
Warrior-Tombigbee Waterway funding request before your committee, 
realizing that continued improvements to the waterway will one day 
bring this system to its fullest potential.
    The Port of Mobile is an extremely important and vital link to 
domestic and international trade routes for Mobile, AL and the 
southeastern sector of our nation. Having supplied petroleum products 
to the inland and international marine operators, and operating support 
facilities for the petroleum exploration and production industry, as 
well as supplying petroleum products to commercial, industrial and 
retail markets, Midstream is keenly aware of the impact the Port of 
Mobile has upon the region. We enthusiastically support the 
appropriation of $23.2 million for maintenance of the port.
    Please carefully consider the testimony given before your committee 
by Charles A. Haun, Chairman of the Warrior-Tombigbee Development 
Association, and by Sheldon Morgan, President of that association. 
Midstream Fuel Service, Inc. supports the testimony presented by these 
gentlemen as representative of those who use the Black Warrior-
Tombigbee Waterway and the Port of Mobile.
    Thank you for the support offered by your committee in the past. We 
look forward to continued progress.
                                 ______
                                 
Prepared Statement of Adolph N. Ojard, Vice Chairman, Maritime Affairs, 
                    Mobile Area Chamber of Commerce
    This statement is presented on behalf of the 2,500 business members 
of the Mobile Area Chamber of Commerce in support of the fiscal year 
1998 operations and maintenance budget request for new funding for the 
Warrior-Tombigbee Waterway.
    Our support for the request of the Warrior-Tombigbee Waterway is 
predicated on the fact that the cargo moving on the Warrior-Tombigbee 
Waterway supports the Port of Mobile and many area businesses. One 
example is the nearly completed $100 million DRI (iron ore) processing 
plant in Mobile with 75 new jobs. Additional projects are considering 
our area, based on the ongoing availability of water borne 
transportation. Only through our efficient transportation system and 
reliable waterways can these benefits to local businesses continue to 
be realized. The $16,200,000 request has been carefully reviewed and is 
a minimum figure to meet anticipated expenses and problems.
    We additionally support adequate funding for operations and 
maintenance of the Mobile Harbor. This activity is critical to the 
growing development of trade with the southeastern U.S. and our 
southern neighbors.
                                 ______
                                 
      Letter From Dean White, Port Captain, Orsouth Transport Co.
                                     Orsouth Transport Co.,
                                     Mobile, AL, February 18, 1997.
Hon. Pete V. Domenici,
Chairman, Subcommittee on Energy and Water Development,
U.S. Senate, Washington, DC.
    Dear Senator Domenici: I am writing to express my support for the 
continued maintenance and improvement of the Black Warrior-Tombigbee 
Waterway System.
    Orsouth Transport Co. is one of the largest regional carriers by 
water in the Warrior-Tombigbee System. Last year we transported 
approximately 1,700,000 tons of commodities on this waterway and an 
additional 2,800,000 tons through the Port of Mobile, including coal, 
scrap metals, grain and wood chips/lumber. These tonnage's are 
significant to the economies of the states in that region, from the 
points of view of both producers and consumers. Barging is a very low 
cost method of transportation, responsible for moving more than 15 
percent of all of the United States total freight for less than 2 
percent of the nation's total transportation costs, which translates 
into savings for the consumer, such as lower rates for electricity.
    Another important aspect of the Warrior-Tombigbee System is that it 
provides the only alternative to the Mississippi River to move product 
to the Gulf Coast. This was extremely important during the drought year 
of 1988, when the lower portion of the Ohio River was closed for an 
extended period and the lower Mississippi River was severely restricted 
for approximately five months. The availability of the Warrior-
Tombigbee System allowed us to continue to serve utility and industrial 
customers and kept those customers from having to shut down operations 
because they could not receive raw material.
    Orsouth Transport Co. fully supports and recommends appropriation 
of $16.2 million for operation and maintenance of the Black Warrior-
Tombigbee System for fiscal year 1998. Furthermore, we recommend 
additional funding to permit the Corps of Engineers to proceed with 
some of the projects that have been deferred over the past three years, 
which total $4,000,000. These projects include upland disposal dikes, 
mooring cells and long range studies. All of these funds are necessary 
to assure that the Warrior-Tombigbee System remains an important part 
of the Inland Waterway System. Finally, we support an appropriation of 
funds in the amount of $23.2 million for Mobile Harbor. The Port of 
Mobile is an integral part of the waterway system, especially as an 
alternative origin to the Port of New Orleans. Improvement of the 
Mobile harbor will increase utilization of the Warrior-Tombigbee System 
overall and generate significant additional monies for the states in 
this region. We request your support in reviewing and approving these 
project funding limits for fiscal year 1998.
            Sincerely,
                                                Dean White,
                                                      Port Captain.
                                 ______
                                 
        Letter From Ken A. Wheeler, President, R&W Marine, Inc.
                                          R&W Marine, Inc.,
                                    Paducah, KY, February 18, 1997.
Hon. Pete V. Domenici,
Chairman, Subcommittee on Energy and Water Development,
U.S. Senate, Washington, DC.
    Dear Senator Domenici: I am writing to express my support for the 
continued maintenance and improvement of the Black Warrior-Tombigbee 
Waterway System.
    R & W Marine is one of the largest tramp towing companies in the 
inland river system This means that R&W is engaged in the business 
towing barges for many companies, as it does not own any barges itself. 
A significant number of our customers require service to and from both 
the Black Warrior-Tombigbee system and the Port of Mobile. The 
tonnage's flowing through these waters are significant to the economies 
of the states in that region, from the points of view of both producers 
and consumers. Barging is a very low cost method of transportation, 
responsible for moving more than 15 percent of all of the United States 
total freight for less than 2 percent of the nation's total 
transportation costs, which translates into savings for the consumer, 
such as lower rates for electricity.
    Another important aspect of the Warrior-Tombigbee System is that it 
provides the only alternative to the Mississippi River to move product 
to the Gulf Coast. This was extremely important during the drought year 
of 1988, when the lower portion of the Ohio River was closed for an 
extended period and the lower Mississippi River was severely restricted 
for approximately five months. The availability of the Warrior-
Tombigbee System allowed us to continue to serve utility and industrial 
customers and kept those customers from having to shut down operations 
because they could not receive raw material.
    R & W Marine fully supports and recommends appropriation of $16.2 
million for operation and maintenance of the Black Warrior-Tombigbee 
System for fiscal year 1998. Furthermore, we recommend additional 
funding to permit the Corps of Engineers to proceed with some of the 
projects that have been deferred over the past three years, which total 
$4,000,000. These projects include upland disposal dikes, mooring cells 
and long range studies. All of these funds are necessary to assure that 
the Warrior-Tombigbee System remains an important part of the Inland 
Waterway System. Finally, we support an appropriation of funds in the 
amount of $23.2 million for Mobile Harbor. The Port of Mobile is an 
integral part of the waterway system, especially as an alternative 
origin to the Port of New Orleans. Improvement of the Mobile harbor 
will increase utilization of the Warrior-Tombigbee System overall and 
generate significant additional monies for the states in this region. 
We request your support in reviewing and approving these project 
funding limits for fiscal year 1998.
            Sincerely,
                                            Ken A. Wheeler,
                                                         President.
                                 ______
                                 
Letter From Stephen A. Frasher, Senior Vice President, Operations, Red 
                          Circle Transport Co.
                                  Red Circle Transport Co.,
                                 Cincinnati, OH, February 18, 1997.
Hon. Pete V. Domenici,
Chairman, Subcommittee on Energy and Water Development,
U.S. Senate, Washington, DC.
    Dear Senator Domenici: I am writing to express my support for the 
continued maintenance and improvement of the Port of Mobile.
    Red Circle Transport Co. is a subsidiary of one of the nation's 
largest barge transportation companies and provides service to Puerto 
Rico. The Port of Mobile is a port of call for ConAgra, one of Red 
Circle's major customers. Products from Mobile are transported to San 
Juan, Puerto Rico, enhancing the economic viability of both locations. 
In addition, products from Mobile help sustain the viability of Puerto 
Rico, an island nation dependent upon cost effective, reliable water 
transportation service. Barging is a very low cost method of 
transportation, responsible for moving more than 15 percent of all of 
the United States total freight for less than 2 percent of the nation's 
total transportation costs, which translates into savings for the 
consumer, such as lower rates for food products and electricity.
    Red Circle Transport Co. fully supports and recommends 
appropriation of $23.2 million for Mobile Harbor in fiscal year 1998. 
In addition, we support the appropriation of $16.2 million for 
operation and maintenance of the Black Warrior-Tombigbee system for 
fiscal year 1998. Finally, we recommend additional funding to permit 
the Corps of Engineers to proceed with some of the projects that have 
been deferred over the past three years, which total $4,000,000. These 
projects include upland disposal dikes, mooring cells and long range 
studies. All of these funds are necessary to assure that the Port of 
Mobile and the Warrior-Tombigbee System remain important parts of the 
Inland Waterway System.
    We request your support in reviewing and approving these project 
funding limits for fiscal year 1998. Continued support for improvement 
of Mobile Bay and the water systems that support commerce at Mobile 
will result in a significant economic benefit to the United States and 
the Caribbean Region.
            Sincerely,
                                        Stephen A. Frasher,
                                 Senior Vice President, Operations.
                                 ______
                                 
  Prepared Statement of Lawrence L. Merrihew, Vice President, Regions 
                                  Bank
    The economies of Alabama and the U.S. Gulf Coast are greatly 
impacted by the Port of Mobile and the inland waterways serving these 
areas. The Black Warrior-Tombigbee Waterway is also a vital factor in 
this respect. It serves manufacturing, mining, and the agricultural 
areas, as well as industrial production facilities in western Alabama. 
The waterway has served as an economic stimulant for over 100 years and 
receives periodic improvement; bringing it to the point today, that it 
is a modern system linking vital areas of the economy.
    There are so many vital materials that are shipped on the Black 
Warrior-Tombigbee System, that its overall impact is sometimes not 
adequately considered. For instance, most of the coal exported from 
Mobile is shipped down this very waterway. Therefore, it is important 
that the amount needed as requested by the Corps of Engineers for 
Operations & Maintenance (O&M) of $16.2 million, be appropriated for 
fiscal year 1998. This is a decrease from last year's requested 
appropriation. This level of funding is necessary to support the day-
to-day O&M program, and to continue ongoing channel improvement 
projects that will maintain the waterway in its current state.
    We urge your support of an appropriation of $16.2 million in O&M 
funds for the Black Warrior-Tombigbee Waterway for fiscal year 1998. We 
also request support of the appropriation of adequate O&M funds for the 
Mobile harbor, which this year, is in the amount of $23.2 million.
    An efficient and reliable waterway system is important to all of 
us, and most certainly is a justifiable investment by the federal 
government. The cost benefit ratio will be matched many times over by 
the local investment.
                                 ______
                                 
Prepared Statement of Andrew A. Saunders, Jr., Chairman, CEO, Saunders 
                            Engine Co., Inc.
    The navigable waterways and associated transportation system in the 
State of Alabama is mature, economical, and successful. In the broadest 
sense, I ask your support for the appropriate funding for Operation and 
Maintenance of the Warrior-Tombigbee River system and of Mobile Harbor, 
because it is a solid infrastructure investment by any measure.
    Our system is a rare and valuable link of the international ocean 
Port of Mobile with a vast inland river network through the Warrior-
Tombigbee River and the Tennessee-Tombigbee Waterway. This enormous 
system has strategic and economic importance at every level of 
consideration--national, state, and local.
    Saunders Engine Company at Mobile, Alabama, is a member of a large 
number of firms along the system who are service providers to the 
vessel and barge operators in Alabama's international port and on our 
river system.
    Our company has been part of the maritime community headquartered 
at Mobile for 38 years. We have over seventy employees who are 
primarily engaged in this service and we are only part of a network of 
fuelers, repairers, and suppliers who maintain the large fleet of 
ships, towboats, barges, and cranes that are utilized in the total 
system from ocean port to inland terminals.
    We ask for your full support of the Corps of Engineer's budget 
request for Operations and Maintenance in fiscal year 1997. This 
request for the Warrior-Tombigbee is expected to be level with 1996 and 
is in the range of $16.2 million. Also, we ask your support to fund in 
fiscal year 1997 certain specific maintenance projects which are 
critical to the efficient operation of the waterway, but which have 
been deferred in the past two years--these total $4 million.
    Thank you for your consideration. Of course, our river system is 
vitally enhanced by the international ocean port of Mobile, Alabama. 
Therefore, I ask your support of the appropriation for Mobile harbor of 
$23.2 million.
                                 ______
                                 
 Letter From Jerry L. Stewart, Vice President, Fuel Services, Southern 
                         Company Services, Inc.
                           Southern Company Services, Inc.,
                                  Birmingham, AL, February 7, 1997.
Hon. Pete V. Domenici,
Chairman, Subcommittee on Energy and Water Development,
U.S. Senate, Washington, DC.
    Dear Senator Domenici: On behalf of Alabama Power Company, Gulf 
Power Company, and Mississippi Power Company, I am writing to express 
our support for the Warrior-Tombigbee Development Association and its 
president in their efforts before your committee. Because of the 
importance of the Warrior-Tombigbee Waterway to local, national, and 
international trade, the Southern electric system joins with the 
Warrior-Tombigbee Development Association in an effort to improve the 
efficiency and reliability of the Warrior-Tombigbee Waterway.
    Alabama Power Company, Gulf Power Company, and Mississippi Power 
Company have used the Warrior-Tombigbee to transport coal to their 
respective electrical generating plants at Demopolis, Alabama; West 
Jefferson, Alabama; Mobile, Alabama; Pensacola, Florida; Sneads, 
Florida and Biloxi, Mississippi. In 1996, through the use of contracted 
barge carriers, these companies moved over 7.6 million tons of coal by 
way of the Warrior-Tombigbee Waterway. All of this coal would have 
required a longer move down the Mississippi River through New Orleans. 
The Warrior-Tombigbee Waterway allows the barges to move down the 
Warrior-Tombigbee River to Mobile and other destinations. The 
significant importance of this capability to our system is obvious from 
a transportation flexibility standpoint. Additionally, the Port of 
Mobile is the hub of the Central Gulf Coast and the continued 
development of its facilities and support services is critical to the 
economy of the tri-state area served by the Southern electric system.
    Alabama Power Company, Gulf Power Company, and Mississippi Power 
Company utilize water transportation because of the economic advantage 
to our millions of customers. Any expenditures for maintenance or 
upgrading which improve the efficiency and reliability of the waterway 
will have a positive impact on our customers. At the same time, higher 
cost resulting from inefficiency or the unreliability of the Warrior-
Tombigbee Waterway will have a direct and adverse effect upon our 
customers.
    It is imperative that there be a continuous program for maintenance 
and upgrading of the Warrior-Tombigbee Waterway channels and locks. We 
support the proposed budget request for $16.2 million in Operations and 
Maintenance funds for the Black Warrior-Tombigbee River for the fiscal 
year 1998. Additionally, we support the earliest completion of the 
capital projects that have been deferred over the past three years as 
well as the appropriation of funds for Mobile Harbor in the amount of 
$23.2 million.
    Adequate funding of programs required to maintain the efficiency 
and reliability of our nations waterways is critical to its superior 
economic health and welfare. I strongly urge and solicit your support.
            Sincerely,
                                          Jerry L. Stewart,
                                     Vice President, Fuel Services.
                                 ______
                                 
 Prepared Statement of James H. Darnley, Jr., Regional Vice President, 
                             Port of Mobile
    Stevedoring Services of America (``SSA'') is a stevedoring and 
marine terminal operating company that handles approximately 1.7 
million tons of forestry products and 1.5 million tons of bulk cargo 
(coal) through the Port of Mobile on an annual basis. Here in Mobile, 
we directly employ 50 people which generates approximately $2.0 million 
dollars in salaries annually and additionally support approximately 
300,000 man hours for four local International Longshoremen Association 
unions.
    SSA fully supports the collective effort to improve the efficiency 
and reliability of the Warrior-Tombigbee Waterway. The waterway is a 
vital factor in the stevedoring and marine transportation industry and 
an essential element in the transportation infrastructure at the Port 
of Mobile. SSA depends upon the waterway as a significant factor in 
maintaining our base business as well as our future economic 
development in this area.
    Currently, the 1.5 million tons of coal we handle each year through 
the McDuffie facility is totally dependent upon the waterway. If the 
efficiency and reliability of the waterway is not improved, it would 
cause significant reductions in the efficient handling of that cargo. 
It is our position the appropriation of near level funding $16.9 
million dollars, in O&M funds is imperative and deferred projects 
totaling $4 million dollars are vital to continuing the improvements 
year to year.
    Additionally, SSA supports the appropriation of funds for 
maintaining Mobile Harbor. We urge adequate O&M funding for Mobile 
harbor as maintenance of our harbor is crucial to the Port of Mobile's 
transportation industry as well as our states' economy.
    We strongly urge you to support the Corps' submitted O&M budget for 
fiscal year 1998 as well as their request for additional capabilities 
as they are vital to continuing the improvements which ultimately will 
bring the waterway efficiency to an expected level.
    We very respectfully appreciate your consideration of this matter.
                                 ______
                                 
  Prepared Statement of Alvin P. DuPont, Mayor, City of Tuscaloosa, AL
    I am asking that you support the appropriation of $16.2 million for 
the U.S. Army Corps of Engineer's fiscal year 1998 operation and 
maintenance of the Warrior-Tombigbee Waterway and Mobile Harbor. I 
understand that this is the amount in the present budget, which was 
reduced by 3 percent from last year; and therefore is at minimum level. 
Please do not reduce this amount.
    The Corps has the additional capability to get underway on projects 
totalling $4,000,000 which have been deferred over the past years. 
These projects (upland disposal dikes, mooring cells and long range 
studies) are vital to continuing the improvements year to year which 
ultimately will bring the waterway efficiency to an expected level. I 
also support the appropriation of funds in the amount of $23.2 million 
for Mobile Harbor. I appeal to you to support these projects.
    I am certain that the availability of water transportation is 
critical to our area's manufacturing development. It is therefore 
important that the river system remain navigable and that projects to 
upgrade the system be funded and completed.
                                 ______
                                 
  Prepared Statement of William P. Lewis, General Manager, U.S. Steel 
                                 Group
    USX Corporation operations (both steel and mining) rely heavily 
upon the availability of Alabama's river systems to transport iron ore, 
coke, coal and finished steel products. This commercially viable river 
transport system helps USX to be competitive both domestically and 
internationally.
    Our plans call for moving up to 6.4 million tons per year of 
material over the Warrior-Tombigbee Waterway System during 1997. This 
is an increase of almost 13 percent from 1996. This could expand even 
further as we are evaluating the use of imported pig iron.
    It is for this reason that we offer our support for the Corps of 
Engineers in their request for operation and maintenance funds for 
fiscal year 1998. We feel the Warrior--Tombigbee Waterway System is 
vital to the continued growth of Alabama and the southeastern United 
States.
    We support the action of the Warrior-Tombigbee Development 
Association in their efforts to assist the Corps of Engineers.
                                 ______
                                 
   Prepared Statement of T. Keith King, P.E., President, CEO, David 
                       Volkert & Associates, Inc.
    David Volkert & Associates, Inc. (Volkert) is an engineering/
architectural/planning firm which employs 400 people and maintains 
Alabama offices in Mobile, Birmingham, and Gulf Shores. Volkert 
strongly supports funding for the Corps of Engineers for the Warrior-
Tombigbee Waterway and the Port of Mobile for fiscal year 1998.
    We believe the proposed $16.2 million for Operations and 
Maintenance funds for the Black Warrior-Tombigbee is justified since 
this amount is necessary to cover the known and reasonably expected 
needs for fiscal year 1998, support the day-to-day O&M program, and 
continue on-going channel improvement projects. We also support an 
additional $4,000,000 needed by the Corps to continue the improvements 
year to year which ultimately will bring the waterway efficiency to an 
expected level.
    Since the City of Mobile's largest industry is her Port and the 
City's present economy and future progress depends upon her Port, 
Volkert also supports the $23.2 million funding for Mobile Harbor.
    Confidence in the Waterway and its efficiency and modernization are 
important in bringing much needed new industry to Mobile and to the 
State of Alabama. Lower operating costs to users of the Waterway and 
Port of Mobile are essential in obtaining a reasonable balance of the 
international export market allowing the U.S. to reduce our trade 
deficit. Increases in shipping and commerce result in opportunities for 
many companies, similar to Volkert, to obtain business and offer 
meaningful employment to citizens of the State of Alabama and other 
parts of the U.S.
    Volkert appreciates this opportunity to express our support of 
Chairman Charles A. Haun and President Sheldon L. Morgan, of the Black 
Warrior-Tombigbee Development Association, and the testimony to be 
given by them before the Appropriations Committees of the Senate and 
House. We are proud to join in the collective effort to improve the 
efficiency and reliability of the Black Warrior-Tombigbee Waterway and 
the Port of Mobile.
                                 ______
                                 
   Prepared Statement of Adolph N. Ojard, President, Warrior & Gulf 
                             Navigation Co.
    I am Adolph N. Ojard, President of Warrior & Gulf Navigation 
Company. Our company is an active member of the Warrior-Tombigbee 
Development Association and wholly supports the testimony to be 
presented by Mr. Sheldon Morgan as President of the Association. I wish 
to take this opportunity to highlight the impact that the Black 
Warrior-Tombigbee Waterway and the Port of Mobile has to the success 
and development of our Company.
    Warrior and Gulf is a barge line and terminal operator 
headquartered in Chickasaw, Alabama, and owns 22 towboats and 240 
barges, moving approximately 9 million tons of bulk materials on the 
Black Warrior-Tombigbee River System, making WGN the dominant water 
carrier operating in the region. Additionally, we own and operate two 
bulk and general cargo terminals at Port Birmingham and Mobile, 
Alabama, providing storage, transloading and intermodal services for 
truck, rail and water transportation. Our total employment is 235 
people.
    Warrior and Gulf has provided barge transportation on the Black 
Warrior-Tombigbee River Systems since 1940 for export and domestic 
coal, iron ore, coke, import and export steel products, export and 
domestic wood chips, and several other types of bulk commodities. An 
efficient and properly maintained waterway system integrated with the 
Port of Mobile is vital to Warrior and Gulf and its customers. This 
waterway system has made the entire region world competitors through 
the reliable, efficient movement of raw materials and finished products 
both for domestic and overseas consumption. In order to encourage 
continued economic development along this great waterway we must 
continue in our efforts to ensure this viable low cost transportation 
alternative remains in place. The continued efficiency of this waterway 
is extremely critical to the viability of the industries it services 
and develops. This waterway system and harbor hold great opportunity 
for developing trade initiatives with Mexico and South America.
    Historically, our shoaling problems vary greatly from year to year 
dependent upon the length of our high water season (December-April) and 
the amount of flooding that occurs. The Operations and Maintenance 
budget has been typically $18-20 million including monies to maintain 
ongoing channel improvements which are important to the continued 
safety and efficiency of the waterway system.
    We have worked closely with the Corps of Engineers and 
wholeheartedly endorse their budget request of $16.2 million in O&M 
funds for the Black Warrior-Tombigbee system for fiscal year 1998.
    It is also our understanding that the Corp has additional project 
capacity in fiscal year 1998. Therefore, we ask that $4.0 million be 
set aside to fund those projects which have been deferred over the past 
three years. These projects are important to improve the safety and 
efficiency of our waterway system.
    Lastly, it goes without saying that the maintenance of the Mobile 
harbor is vital to our waterway and the entire southern region. We, 
therefore, support the appropriation of $23.0 million to adequately 
fund Mobile harbor's O&M needs.
    Our company and its employees respectfully request your continued 
support and assistance as your subcommittee considers appropriation of 
funds for these very important issues concerning the Black Warrior-
Tombigbee System, the Port of Mobile and those they serve.
                                 ______
                                 
 Prepared Statement of Jack P. Speck, Manager, U.S. South Export Fiber 
                   Supply and Marketing, Weyerhaeuser
    Weyerhaeuser Company has been a long term user, since 1984, of the 
Black Warrior-Tombigbee Waterway (BWT) and the Port of Mobile. Our 
manufacturing business is heavily dependent on the efficiency and 
reliability of barge transportation of woodchips to the Port of Mobile 
and the loading aboard ocean going vessels for export to Japan, which 
as you know is favorable to our nation's balance of trade. The business 
has been one of consistency for many years and now we are in an 
expansion period whereby the annual volumes will increase from 600,000 
tons per year to 1.8 million tons per year by 1998. To remain a 
reliable stable supplier and competitive in the global market it is 
imperative that the funding for the U.S. Army Corps of Engineers be 
maintained as proposed for the BWT. Without the reliability and 
efficiency of the BWT we cannot continue this business.
    The amount proposed by the Corps last year for Operations and 
Maintenance was $16.7 million. While we do not know the Corps' 
recommended budget for fiscal year 1998, we do know their plan is to 
cut at least 3 percent per year nationally, for five years. We 
desperately need near level funding to ensure the long term viability 
of the BWT and the competitiveness of this business in the global 
marketplace. Also the Corps has the additional capability to get 
underway those projects which have been deferred over the last three 
years--upland disposal dikes, mooring cells and long range studies that 
are vital to continuing the efficiency of the waterway at expected 
levels. These delayed projects totals $4.0 million.
    It is also imperative that consistent and level funding be 
continued for Mobile Harbor. This will ensure reliable shipping at 
competitive rates. As a result of prior years funding the Port of 
Mobile enjoys the position of being number one (a market share in 
excess of 40 percent) for the loading of forest products in the Gulf of 
Mexico. Therefore, we support the appropriation of funds for Mobile 
Harbor, in an amount of $23.2 million.
    The business is important to the local communities in which we are 
located and our business supports jobs in the sectors of forestry, 
manufacturing, inland waterway transportation and stevedoring. This 
supports in excess of three hundred, direct and indirect, family jobs 
before our expansion. Without consistent near level long term funding 
to the BWT and Mobile Harbor we would not be able to support these jobs 
or the related jobs that will brought on by our expansion. Our business 
would be noncompetitive and we would be forced to cease operations.
    Weyerhaeuser Company strongly urges your support for near level 
long term funding for the BWT and Mobile Harbor.
                                 ______
                                 
 Prepared Statement of Jan Jones, Executive Director, Tennessee River 
                           Valley Association
    Mr. Chairman, Members of the Committee, thank you for allowing me 
the opportunity to present written testimony for your consideration. I 
am Jan Jones, Executive Director of the Tennessee River Valley 
Association (TRVA), a regional, non-profit, non-partisan, economic 
development association serving the seven states of the Tennessee 
Valley region. I respectfully submit this testimony on behalf of the 
approximate 350 regional members of TRVA.
    TRVA members appreciate the wisdom historically of this Committee 
in funding projects that have served to improve the nation's economy 
and enhance the quality of life of its people. We understand the 
problems of dwindling budgets, limited resources and the need to make 
every dollar count. For that reason, TRVA members have asked me to 
submit testimony on behalf of the following two issues.
                 issue one: tennessee valley authority
    This association requests that the Tennessee Valley Authority's 
fiscal year 1998 funding be maintained at no less than the level 
provided in fiscal year 1997 which was $106 million. With respect to 
TVA's recent proposal that no appropriated funding would be requested 
for fiscal year 1999, it is imperative that fiscal year 1998 funding be 
maintained at the fiscal year 1997 level to allow an opportunity for 
the Congress, TVA and the Valley's citizens to evaluate the effects of 
the proposal and alternatives for program continuance. Each of these 
programs are so complex and have such tremendous economic impact, it is 
imperative that careful study and planning be given to potential 
change.
    This association is currently establishing a Study Group comprised 
of approximately 25 citizens from throughout the Tennessee Valley 
representing wide-range backgrounds and interests to study the 
proposal, its effects, possible program alternatives, etc. We would 
like to request the opportunity at a later date to extend this 
testimony to include the findings and/or recommendations of this study 
group.
    We would, however, like to take this opportunity to highlight 
specific projects and examples of TVA's work in the Tennessee Valley 
that are currently made possible through the funding you provide.
Chickamauga Lock project
    Chickamauga Lock is located on the Tennessee River just upstream 
from Chattanooga, Tennessee. The lock was completed and opened to 
traffic in February, 1940. Soon after completion, it was discovered 
that a reaction between alkali in the cement and the limestone used to 
make the concrete caused the concrete to swell, resulting in structural 
deformation. This reaction process continues. Over the years 
modifications have been made to the lock because of this reaction, 
however, these efforts have only assisted in temporary stabilization. 
Engineering analysis by TVA, Corps and independent consultants shows 
that these repairs can only keep the lock operational until 2005.
    Chickamauga Lock is a vital component of our Nation's 
interconnected inland waterway. An average of 2.2 million tons of cargo 
passes through Chickamauga Lock each year. It also has the largest 
number of lockages on the Tennessee River for recreational traffic. 
Closure would cut off 318 miles of navigable waterway above Chattanooga 
from the inland waterway system. This would create tremendous negative 
impact on economic development, recreation, the environment and 
national defense. Closure would also curtail accessibility to defense 
facilities at Oak Ridge, which ship and receive oversize cargoes that 
cannot move by other modes. Lock closure would result in a payroll loss 
in upper east Tennessee in excess of $75 million annually. It would 
also mean the forfeiture of $25 million annually of shipper savings, a 
rise in regional transportation rates, closure of barge terminals as 
well as water-dependent industries.
    We sincerely request funding for fiscal year 1998 to TVA in the 
amount of $6.6 million to continue the vital work related to 
Chickamauga Lock.
Navigation
    The Tennessee River navigation system has two major federally 
managed components that serve both commercial and recreation 
navigation. These components are the navigation locks and the 
navigation channels. Both TVA and the Corps of Engineers have 
responsibilities for operation of the system. As owner, TVA is the lead 
agency.
    TVA's interface with the Corps is defined in an October 1962 
Memorandum of Agreement (MOA). TVA has primary responsibility for work 
of a capital nature on the navigation system and the Corps has primary 
responsibility for operation and maintenance work. The MOA allows the 
interchange of these responsibilities to provide for efficient and cost 
effective use of each agency's resources. Each partner may assist the 
other when one agency's funds or resources are insufficient to meet 
responsibilities.
    TVA plans and implements capital improvements for the 14 locks at 
10 dams and the navigation channel. TVA performs structural inspections 
of all locks and the structural concrete repair and rehabilitation of 
lock walls. In addition, TVA provides maintenance of the lock 
infrastructure and support facilities such as electrical power cables 
for lock operations, water and waste water systems, and access roads 
and grounds.
    The Corps provides support in daily operation of the 14 locks, 
handles maintenance of lock gates, valves and operating machinery, as 
well as major gate, valve and equipment repair. The Corps also performs 
periodic channel inspections, maintenance dredging to ensure a clear 
channel and barge mooring facility maintenance.
    There have been about 40 subagreements added to the MOA since 1962 
to cover specific actions and the transfer of funds for work on the 
system infrastructure. These have included barge mooring facility 
construction, electrical power feeder cables and equipment, 
communications cables, water and waste water systems, and definition of 
environmental responsibilities.
    A separate MOA was implemented in 1991 for design and construction 
of a new lock at Kentucky Dam. Since the purpose of this project is to 
resolve problems associated with the Kentucky-Barkley navigation 
system, it was deemed appropriate for the Corps to seek project 
authorization and funding.
Water management
    TVA manages 48 dams on the Tennessee River and its tributaries, and 
works to protect and improve water quality and aquatic life in the 
reservoirs and the watersheds that drain into them.
  --TVA controls flooding along 652 miles of the Tennessee River, the 
        Nation's fifth largest river. In 1994, TVA's flood control 
        program prevented an estimated $1 billion in flood damages 
        across the Tennessee Valley. It is also estimated that since 
        TVA's inception their floor control program has saved in excess 
        of $5 billion in devastating flood damages in the area of 
        Chattanooga, Tennessee.
  --TVA manages the navigation system used for recreation and for 
        transporting some 48 million tons of cargo annually.
  --TVA is recognized as a national leader in developing and applying 
        water aeration technologies.
  --TVA provides for watershed protection and improvement, monitors 
        water conditions, pollution, aquatic vegetation growth and 
        mosquito control.
Land management
    TVA is responsible for the stewardship of some 250,000 acres along 
11,000 miles of shoreline. TVA-owned land includes narrow bands of 
shoreline used to maintain its system of dams and lakes to control 
flooding.
  --TVA manages 160 public recreation areas offering opportunities for 
        boating, hunting, fishing, hiking, swimming and camping. 
        Visitors to TVA's reservoir system contributes $1.2 billion to 
        the economy of the Tennessee Valley each year.
  --TVA land holdings protect and provide for the management of 
        extensive cultural resources, threatened and endangered 
        species, critical wetland habitat and scenic areas, consistent 
        with federal mandates.
Environmental Research Center
    TVA's Environmental Research Center in Muscle Shoals, Alabama, is 
development and implementing technologies and strategies to prevent or 
reduce pollution. The focus is on solving air-quality problems, 
developing innovative techniques for waste treatment and protecting 
water quality. The Center is developing creative waste management 
technologies, such as bioremediation for PCB's and other toxic wastes; 
creation of more efficiently constructed wetlands; and working to 
understand the ozone pollution problem and provide a scientific basis 
for future regulation. The Center is also helping agrichemical dealers 
and farmers to prevent surface and groundwater contamination, which is 
one of the Nation's largest pollution problems. The Environmental 
Research Center is on target to becoming financially self sustaining by 
the year 2000.
                issue two: u.s. army corps of engineers
    We also request the following under the U.S. Army Corps of 
Engineers fiscal year 1998 budget.
Kentucky lock addition project
    Situated near the mouth of the Tennessee River, Kentucky Lock 
provides the only economical waterway access from the Mississippi, 
Illinois, Missouri and Ohio River to the Tennessee and Cumberland River 
Valleys region. Kentucky Lock also acts as the door to a backup system 
for the inland waterway. In times of drought or flood, an alternate 
route to the lower Mississippi is available through Kentucky Lock via 
the Tennessee River to the Tennessee-Tombigbee Waterway and hence to 
the Gulf of Mexico. This is economically important as well as 
beneficial to our national defense.
    Kentucky Lock's 600 ft. chamber is too small to handle a modern 15-
barge two without two lockages. The high traffic on this portion of 
river and size of the lock greatly increases the processing time giving 
Kentucky Lock one of the highest transit times in the inland waterways.
    Due to Corps workload and funding ceilings, the construction start 
of Kentucky Lock is projected to be deferred until 2008. Design will be 
deferred after 1998 until 2008 and project completion will be delayed 
until 2020.
    Although the project is being contracted in Kentucky, the cost of 
the impacts from the construction delay will be passed along to the 
people and industries in the Tennessee Valley, Cumberland Valley and 
the Tenn-Tom Waterway because Kentucky Lock is the gateway into these 
waterways. Construction delay will result in the following costs:

                        [In millions of dollars]

Annual increase cost of commodities transported...................  23.3
Annual electrical power cost......................................  15.4
Inflation cost to construction.................................... 203.0
Cost to industry for lock closure for major maintenance and repair 
    (2009)........................................................ 250.0

    The Feasibility report that justified the Kentucky Lock Addition 
Project was completed in 1992. The project was authorized for 
construction in the Water Resources Development Act of 1996. The 
current benefit cost ratio is 2.4 to 1 with a current project cost of 
$395 million (Oct. 1995) which is a saving of almost $100 million from 
the feasibility cost. Through fiscal year 1997 Congress will have 
appropriated $9.5 million dollars for PED. Without funding constraints, 
construction could start in 1999 and be completed by 2009.
    Currently, tows experience an average delay of just over 5 hours to 
lock through Kentucky Lock. Delays have been increasing each year as 
the traffic demands increase and will increase to 10 hours by the year 
2020.
    We sincerely request a $6 million for the Kentucky Lock Addition 
Project in the U.S. Army Corps of Engineers fiscal year 1998 budget. We 
also support a total funding for the Nashville District Corps of 
Engineers in the amount of $96.758 million in fiscal year 1998.
    Mr. Chairman, Members of the Committee, we sincerely appreciate the 
excellent work of this important Committee. We respectfully urge that 
the Committee give thoughtful consideration when deliberating on 
funding for the Tennessee Valley Authority and the U.S. Army Corps of 
Engineers.
    Enclosures: Letters from citizens to the Committee

                                 NASHVILLE DISTRICT FUNDING FISCAL YEARS 1998-98                                
                                            [In thousands of dollars]                                           
----------------------------------------------------------------------------------------------------------------
                                                                                   Fiscal year                  
                                                                            -------------------------           
                                                                   Prior                      1998       Total  
                                                                allocations      1997       present   investment
                                                                             appropriated    budget             
----------------------------------------------------------------------------------------------------------------
By appropriation:                                                                                               
    General investigations....................................  ...........      4,080.5     2,200.0  ..........
    Construction, general.....................................  ...........     28,180.1     4,800.0  ..........
    Operation and maintenance.................................  ...........     55,326.0    52,318.0  ..........
    Flood control and coast emergency.........................  ...........        206.0   .........  ..........
    General regulatory functions..............................  ...........      2,183.0     2,500.0  ..........
                                                               -------------------------------------------------
      Total district (appropriation funds)....................  ...........     89,975.6    61,818.0  ..........
                                                               =================================================
Kentucky lock PED.............................................     6,500.0       2,631.0     1,750.0    10,881.0
Kentucky lock feasibility.....................................     5,802.0   ............  .........     5,802.0
                                                               -------------------------------------------------
      Total Kentucky lock investment..........................    12,302.0       2,631.0     1,750.0    16,683.0
                                                               =================================================
Total requirement for new construction start at Kentucky lock                                                   
 in fiscal year 1998..........................................  ...........  ............    6,000.0  ..........
                                                               =================================================
Additional capability items:                                                                                    
    Harlan, KY................................................  ...........  ............   18,000.0  ..........
    Williamsburg, KY..........................................  ...........  ............    4,690.0  ..........
    Middlesborough, KY........................................  ...........  ............    7,200.0  ..........
    Duck River watershed, TN..................................  ...........  ............      200.0  ..........
    Powell River watershed, VA................................  ...........  ............      200.0  ..........
    Tenn River and tributaries, NC............................  ...........  ............      200.0  ..........
    Rock Creek, KY............................................  ...........  ............      100.0  ..........
    North Chickamauga Creek, TN...............................  ...........  ............      100.0  ..........
                                                               -------------------------------------------------
      Grand total.............................................  ...........  ............   96,758.0  ..........
----------------------------------------------------------------------------------------------------------------

                                 ______
                                 
 Letter From Jim Godfrey, Vice President, Tennessee Farmers Cooperative
                             Tennessee Farmers Cooperative,
                                      Lavergne, TN, March 11, 1997.
Hon. Pete V. Domenici,
Chairman, Subcommittee on Energy and Water Development,
U.S. Senate, Washington, DC.
    Dear Senator Domenici: I am writing in support of the fiscal year 
1998 TVA budget request, which includes the Chickamauga Lock on the 
Tennessee River. The current lock at Chickamauga is rapidly 
deteriorating and must be replaced by 2005. Failure to replace this 
lock will effectively abandon 290 miles of navigable waterway above 
Chattanooga, Tennessee.
    Abandonment of the upper Tennessee River would have tremendous 
negative economic impact on eastern Tennessee, eastern Kentucky, and 
western North Carolina. The inland waterway system is the most 
environmentally sound, and cost efficient transportation mode for 
delivery of many raw materials to, and shipment from this area.
    Specifically, my company ships many thousand tons of fertilizer 
materials to this area by the Tennessee river, and it would create a 
huge cost increase to area farmers, if use of this waterway was 
abandoned.
    Thank you in advance for your support of this project.
            Sincerely,
                                               Jim Godfrey,
                                                    Vice President.
                                 ______
                                 
  Prepared Statement of Leamon Lane, General Manager, R&W Marine, Inc.
    R & W Marine would like to express its support of federal funds for 
the continued operation and maintenance of the Tennessee and Cumberland 
Rivers, as requested on behalf of TVA and Corps of Engineers fiscal 
year 1998 budget. R & W Marine is a towing company which operates out 
of Paducah KY, and also a member of the Tennessee River Valley 
Association and TCWC. Our operation is dependent upon the successful 
operation and maintenance of these particular areas.
    In addition we are in support of the following specific projects:
  --Kentucky Lock Project (Corps) and the Chickamauga Lock Project 
        (TVA).
  --Continuation of navigation flood control, water and land resource 
        development on the Tennessee and Cumberland Rivers, and believe 
        that they should be funded at a level that would provide 
        services no less than what has been provided in the past, no 
        matter which agency has the responsibility.
  --We support inland waterways navigation as an environmentally sound 
        and cost efficient transportation mode in our region, which 
        ultimately helps in reducing freight rate and promoting trade 
        and development.
  --We support the Tennessee and Cumberland Rivers as a vital natural 
        resource, and view their maintenance as paramount in our 
        region, as we are dependent upon successful navigation and 
        flood control. In addition, we are concerned with the community 
        services which are provided from these regions, such as, 
        hydropower generation, recreation, erosion control, 
        agriculture, tourism, fish and wildlife, drinking water, ground 
        and surface water management, water quality, water supply, wet 
        lands, drought management and reservoir management.
  --We support sound economic development efforts to improve Tennessee 
        and Cumberland Rivers as a vital transportation link for the 
        Tennessee and Cumberland River Valleys, to export goods to 
        other national and international markets, via the Inland 
        Waterways System.
    We again reintegrate our strong support of the fiscal year 1998 
Budget and would appreciate any assistance you could provide in this 
regard.
    If R & W Marine can be of any further assistance in demonstrating 
our support of this matter please feel free to contact me at 1-800-283-
4404.
                                 ______
                                 
      Letter From K. Wheeler, Vice President, Orgulf Transport Co.
                                      Orgulf Transport Co.,
                                       Paducah, KY, March 11, 1997.
Hon. Pete V. Domenici,
Chairman, Subcommittee on Energy and Water Development,
U.S. Senate, Washington, DC.
    Dear Senator Domenici: I am writing with regard to fiscal year 1998 
budget, with specific regards to the support of navigation and flood 
control development on the Tennessee and Cumberland Rivers. My company 
operates tow boats and barges on these rivers, as well as other major 
navigation streams throughout the country. I am particularly concerned 
with the administration budget proposal for navigation projects, 
because of the way in which these projects are being funded in the 
fiscal year 1998 budget. By shifting budget moneys from the traditional 
incremental funding status to a fully funded status, the administration 
budget would in effect, stifle any further development of projects that 
are critical to our nations waterways.
    Of particular concern on the Kentucky river is the funding that is 
necessary to continue progress on the Kentucky lock addition project 
and the Chicamauga lock replacement project. Both of these projects are 
vital to the continued improvements in navigation on the Tennessee 
river, which in turn is a fundamental basis for the economic 
development of the entire Tennessee river valley. With this in mind it 
is inconceivable to me that the administration is not taking steps to 
see that both projects are fully funded. Nevertheless, this appears to 
be the case. In the case of Kentucky lock, the administration budget 
has no funds projected for fiscal year 1998 and in the case of 
Chicamauga lock, the Tennessee Valley Authority has announced that it 
is abdicating its responsibility for development of the project. 
Neither of these moves makes any sense to the citizens of the Tennessee 
valley nor to the overall economic health of our country.
    I am requesting your support for full funding of both the Kentucky 
lock project and the Chicamauga lock project in the fiscal year 1998 
budget, regardless of which authority is finally assigned 
responsibility for Chicamauga lock.
            Yours Truly,
                                                K. Wheeler,
                                                    Vice President.
                                 ______
                                 
          Letter From Bob Arnold, Commissioner, Frankfort, KY
                            Office of the Governor,
                            Department of Local Government,
                                     Frankfort, KY, March 10, 1997.
Hon. Pete V. Domenici,
Chairman, Subcommittee on Energy and Water Development,
U.S. Senate, Washington, DC.
    Dear Senator Domenici: As Commissioner of the Kentucky Department 
for Local Government, I am writing to enlist your support for proposed 
funding of the Army Corps of Engineers and the Tennessee Valley 
Authority's fiscal year 1998 budget request.
    Specifically, the Commonwealth of Kentucky supports the Tennessee 
and Cumberland Rivers as a vital natural resource within our region. 
The Kentucky Lock Project (Corps) and the Chickamauga Lock Project 
(TVA) portion of these requests promote sound economic development 
efforts to improve the Tennessee and Cumberland Rivers as a rental 
transportation link for the Tennessee and Cumberland River Valleys.
    I certainly appreciate any support you may provide.
            Sincerely,
                                                Bob Arnold,
                                                      Commissioner.
                                 ______
                                 
      Letter From Frank Pflueger, President, Ag Distributors, Inc.
                                     Ag Distributors, Inc.,
                                     Nashville, TN, March 11, 1997.
Hon. Pete V. Domenici,
Chairman, Subcommittee on Energy and Water Development,
U.S. Senate, Washington, DC.
    Dear Senator Domenici: I am very concerned about, and highly 
supportive of the fiscal year 1998 TVA budget request, which includes 
the Chickamauga Lock on the Tennessee River.
    The current lock at Chickamauga is deteriorating rapidly, and must 
be replaced by 2005. Failure to replace this lock will effectively 
abandon 290 miles of navigable waterway above Chattanooga, Tennessee. 
Abandonment of the upper Tennessee River would have tremendous negative 
economic impact on eastern Tennessee, eastern Kentucky, and western 
North Carolina.
    The inland waterway system is a vital natural resource for our 
region, and its maintenance is required. This waterway system is the 
most environmentally sound, and cost efficient transportation mode to 
import and export goods to and from other national and international 
markets. My company ships many thousands of tons of fertilizer 
materials to this area via the Tennessee river, and it would create a 
huge cost increase to area farmers, if use of this waterway was 
abandoned.
    Thank you in advance for your continued support of this project.
            Sincerely,
                                            Frank Pflueger,
                                                         President.
                                 ______
                                 
                        Letter From Frank McKee
                             Hermitage, TN, March 13, 1997.
Hon. Pete V. Domenici,
Chairman, Subcommittee on Energy and Water Development,
U.S. Senate, Washington, DC.
    Dear Chairman Domenici: It is respectfully requested that you 
support full funding of the Tennessee Valley Authority (TVA) and the 
Corps of Engineers' fiscal year 1998 budget requests. It is vital to 
the economy of this region that work on the Kentucky Lock (Corps) and 
the Chickamauga Lock (TVA) projects continue to move forward without 
delay. These important improvements are essential to the inland 
waterway system and cost-effective river transportation on the 
Tennessee River from Knoxville to its confluence with the Ohio River at 
Paducah, Kentucky.
    Thanks to continued support by Congress over the years, the Corps 
and TVA have provided many multi-state services to this region that 
could not have been accomplished by local or state governments. The 
rainfall, the rivers, and even the mosquitoes, cross county and state 
boundaries and can best be managed on a regional (multi-state) basis by 
a Federal entity such as the Corps or TVA.
    My employment with the University of Tennessee over the past 25 
years as a county government consultant has provided an opportunity to 
be involved with several TVA services and projects that are supported 
by congressional appropriations. TVA led the way with technical 
assistance and demonstrations programs for local governments across the 
201-county, seven state region. TVA worked with many county governments 
to establish energy conservation and management programs, rural fire 
protection and emergency medical services, and solid waste collection 
and disposal systems to help meet Federal mandates. Some 12 years ago I 
worked with Wilson County (TN) to obtain TVA's economic development 
services to select a site for a city/county industrial park. Once the 
proper location was identified and a preliminary design was sketched by 
TVA, the City of Lebanon and Wilson County hired an engineer and moved 
forward with acquisition and development of 250 acres with utilities 
being furnished by the City of Lebanon. The early assistance by TVA 
evolved into a combined county-city economic development board 
interested in expanding local industries and attracting new ones. A 
dozen new or expanded industries/businesses and over 1200 new jobs can 
be attributed to TVA's services. There are many similar examples across 
the TVA region, especially in rural areas.
    I am aware that the TVA Chairman is proposing some major changes 
for the organization that are now under study and evaluation. One 
change is to eliminate Congressional appropriations for TVA's non-power 
programs such as navigation and recreation. Personally, I would like to 
see TVA remain as a unified multi-purpose agency, even if it has to be 
funded by power revenue. There are about 8 million residents in the TVA 
region, so that would amount to approximately one-dollar a month to 
support the appropriated side of TVA.
    I appreciate your hard work and dedicated service as shown on C-
SPAN.
            Sincerely,
                                                       Frank McKee,
                                 ______
                                 
  Letter From Ralph L. Loveless, Executive Vice President and General 
             Manager, Meriwether Lewis Electric Cooperative
                     Meriwether Lewis Electric Cooperative,
                                    Centerville, TN, March 4, 1997.
Hon. Pete V. Domenici,
Chairman, Subcommittee on Energy and Water Development,
U.S. Senate, Washington, DC.
    Dear Honorable Domenici: Meriwether Lewis Electric Cooperative 
(MLEC) serves electricity to over 30,500 members in Hickman, Houston, 
Humphreys, Lewis and Perry counties in middle Tennessee. Along with 158 
other electric distributors valley-wide, we purchase our power from 
TVA. Additionally, we are members of the Tennessee River Valley 
Association (TRVA).
    On behalf of the MLEC board of trustees and employees, I would like 
to express our support for the fiscal year of 1998 TVA and Corps budget 
requests. Specifically, we support funding requests for the Kentucky 
Lock Project (Corps) and the Chickamauga Lock Project (TVA). The 
Tennessee and Cumberland Rivers are a vital natural resource to our 
area and we support the maintenance of them. We support the 
continuation of navigation, flood control and water and land resource 
development on these rivers at no less than the current level, no 
matter which agency has the responsibility.
    Thank you for your time and attention to this matter.
            Respectfully submitted,
                                         Ralph L. Loveless,
                      Executive Vice President and General Manager.
                                 ______
                                 
  Letter From Charles J. Sanders, III, President, Ingram Materials Co.
                                      Ingram Materials Co.,
                                      Nashville, TN, March 5, 1997.
Hon. Pete V. Domenici,
Chairman, Subcommittee on Energy and Water Development,
U.S. Senate, Washington, DC.
    Dear Sir: I am a member of the Tennessee River Valley Association 
and the Tennessee-Cumberland Waterway Council (TRVA/TCWC). I urge you 
to support full funding of both the TVA and USCE fiscal year 1998 
budget requests. These agencies work together to manage the Tennessee 
and Cumberland Rivers for navigation, flood control, recreation, 
hydropower, land use, and wildlife management.
    As major tributary rivers to the Ohio River, the Tennessee and 
Cumberland serve as cost effective shipping lanes to and from both 
domestic and foreign markets. In order to provide this high level of 
service to our national economy, the infrastructure must be maintained, 
then expanded as shipping volumes increase. To this end, I support the 
USCE Kentucky Lock project and the TVA Chickamauga Lock project, both 
improvements to the Tennessee River infrastructure.
    Full funding for the needs of TVA and the Corps will avoid 
compromising the viability of the Tennessee and Cumberland Rivers as 
national resources. TVA and the Corps promote growth through waterway 
management on a cost efficient and environmentally sound basis.
            Sincerely,
                                   Charles L. Sanders, III,
                                                         President.
                                 ______
                                 
  Letter From William H. Hess, Sales Manager, Parker Towing Co., Inc.
                                   Parker Towing Co., Inc.,
                                     Tuscaloosa, AL, March 3, 1997.
Hon. Pete V. Domenici,
Chairman, Subcommittee on Energy and Water Development,
U.S. Senate, Washington, DC.
    Dear Senator Domenici: Parker Towing Company is a major regional 
barge transportation company operating towboats, barges, and port 
facilities mainly on the rivers and waterways of the Southeast and Gulf 
Coast. As a member of the Tennessee River Valley Association, we are 
proud to be a part of a collective effort to maintain and develop the 
Tennessee and Cumberland River Systems for commercial navigation. We 
believe that these waterways are vital transportation links for the 
Tennessee and Cumberland River Valleys for exporting goods to national 
and international markets via our inland waterway system.
    We support continuation of navigation, flood control, water and 
land resource development on the Tennessee and Cumberland Rivers at no 
less than the current level--no matter which agency has the 
responsibility. We fully support the Corps of Engineers' and the 
Tennessee River Valley Association's funding request for fiscal year 
1998. Additionally, we support funding requests for the Kentucky Lock 
Project (COE) and Chickamauga Lock Project (TVA). We hope that we can 
count on your support.
            Sincerely,
                                           William H. Hess,
                                                     Sales Manager.
                                 ______
                                 
          Letter From Julian Price, Mayor, City of Decatur, AL
                                   City of Decatur,
                                       Office of the Mayor,
                                        Decatur, AL, March 4, 1997.
Hon. Pete V. Domenici,
Chairman, Subcommittee on Energy and Water Development,
U.S. Senate, Washington, DC.
    Dear Senator Domenici: The City of Decatur, Alabama, is a member of 
the Tennessee River Valley Association and hereby requests continued 
funding on behalf of the TVA and Corps fiscal year 1998 budget. We 
fully support their testimony request. As Mayor of the City of Decatur, 
I ask that you please consider the following points concerning this 
request.
  --We support the Corps and TVA fiscal year 1998 budget request.
  --We support funding requests for Kentucky Lock Project (Corps) and 
        Chickamauga Lock Project (TVA).
  --We support continuation of navigation, flood control, water and 
        land resource development on the Tennessee and Cumberland 
        Rivers at no less than the current level no matter which agency 
        has the responsibility.
  --We support inland waterway navigation as an environmentally sound 
        and cost efficient transportation mode in our region, helping 
        to reduce freight rates and thus promoting trade and 
        development.
  --We support the Tennessee and Cumberland Rivers as a vital natural 
        resource (and therefore its maintenance) in our region as it 
        pertains to our industries and other vital areas in ways such 
        as: navigation, hydropower generation, recreation and tourism, 
        flood and erosion control, agricultural irrigation, fish and 
        wildlife habitat, drinking water, ground and surface water 
        management, water quality, water supply, wetlands, drought 
        management, and reservoirs management.
  --We support sound economic development efforts to improve the 
        Tennessee and Cumberland Rivers as a vital transportation link 
        for the Tennessee and Cumberland River Valleys to export goods 
        to other national and international markets via our inland 
        waterway system.
    Again, we ask that you please grant this request for continued 
funding. Your approval will benefit not only the City of Decatur, but 
the entire North Alabama region. Thank you for this opportunity to 
express our support for the Tennessee River Valley Association.
            Sincerely,
                                              Julian Price,
                                                             Mayor.
                                 ______
                                 
       Letter From Louis E. Price, Mayor, City of Scottsboro, AL
                                        City of Scottsboro,
                                     Scottsboro, AL, March 3, 1997.
Hon. Pete V. Domenici,
Chairman, Subcommittee on Energy and Water Development,
U.S. Senate, Washington, DC.
    Dear Chairman Domenici: As a member of The Tennessee River Valley 
Association, the City of Scottsboro, Alabama totally supports the Corp 
of Engineers and The Tennessee Valley Authority request for funding for 
the Kentucky Lock Project. We ask the continuation of navigation, flood 
control, water and land development on the Tennessee and Cumberland 
Rivers at nothing less than current levels.
    We feel that inland navigation is environmentally sound and is a 
cost effective mode of transportation for our region. The Cumberland 
and The Tennessee Rivers are seen as vital natural resource and 
therefore maintenance is imperative.
    We request your support of TVA and the Corps fiscal year 1998 
funding for the continued operation and maintenance of these vital 
programs.
            Sincerely,
                                            Louis E. Price,
                                                             Mayor.
                                 ______
                                 
Letter From Larry Bennich, Chairman, Morgan County Commission, Decatur, 
                                   AL
                                  Morgan County Commission,
                                        Decatur, AL, March 6, 1997.
Hon. Pete V. Domenici,
Chairman, Subcommittee on Energy and Water Development,
U.S. Senate, Washington, DC.
    Dear Sir: I am a member of TRVA/TCWC and support their testimony 
requesting support of federal funds for the continued operation and 
maintenance of the Tennessee and Cumberland Rivers on behalf of the TVA 
and Corps fiscal year 1998 budget.
    I would also like to give my support of the following:
  --Funding requests for Kentucky Lock Project (Corps) and Chickamauga 
        Lock Project (TVA).
  --Continuation of navigation, flood control, water and land resource 
        development on the Tennessee and Cumberland Rivers at no less 
        than the current level no matter which agency has the 
        responsibility.
  --Inland waterway navigation as an environmentally sound and cost 
        efficient transportation mode in our region, helping to reduce 
        freight rates and thus promoting trade and development.
  --Tennessee and Cumberland Rivers as a vital natural resource and its 
        maintenance in our region in its use by industry etc.
  --Sound economic development efforts to improve the Tennessee and 
        Cumberland Rivers as a vital transportation link for their 
        River Valleys to export goods to other national and 
        international markets via our inland waterway system.
            Very truly yours,
                                             Larry Bennich,
                                                          Chairman.
                                 ______
                                 
     Letter From J. Richard Hommrich, President, Volunteer Barge & 
                            Transport, Inc.
                          Volunteer Barge & Transport, Inc.
                                      Nashville, TN, March 5, 1997.
Hon. Pete V. Domenici,
Chairman, Subcommittee on Energy and Water Development,
U.S. Senate, Washington, DC.
    Dear Honorable Domenici: I am writing to thank you for your ongoing 
efforts to balance the needs of our country with the tremendous burden 
of budget constraints.
    The needs of our country and its citizens are numerous, but the 
biggest concern for me and my associates and all taxpayers has to be 
with the future of the economy and the need for our strong 
participation in world trade. Much of our foreign exports and 
particularly Grain and Grain Products are dependent on water 
transportation for delivery of these commodities to our ports for 
export to world markets.
    I will try to be brief in listing below the budget items which, in 
the interest of our important waterways and thus our economy I support 
and urge that they be given your consideration and support.
    1. The budgets of the U.S. Army Corps of Engineers and particularly 
for ongoing dredging and maintenance of our rivers and waterways.
    2. He also supports funding requests for Kentucky Lock Project 
(Corps) and Chickamauga Lock project (TVA). The TVA has been 
responsible for these locks since they here constructed 50+ years ago 
and they should not be allowed to abandon them, after shirking their 
lawful mandate to maintain and keep them in good condition, without 
their doing whatever is necessary to bring them up to the standards of 
all of the other new locks that have been built in the last ten to 15 
years.
    3. He support the TVA fiscal year 1998 budget request and 
continuation of navigation, flood control, water and land resource 
development on the Tennessee and Cumberland Rivers at no less than the 
current level. This should be the case no matter which agency, The 
Corps or TVA, has the responsibility.
    Our company is very active in serving the needs of shippers and 
receivers on the Tennessee and Cumberland Rivers. We have been a member 
of the Tennessee River Valley Association/Tennessee Cumberland 
Waterways Council and fully support their program and their testimony 
request.
            Sincerely,
                                       J. Richard Hommrich,
                                                         President.
                                 ______
                                 
  Letter From John B. Herbert, President, and Thomas C. Herbert, Sr., 
                  Vice President, Herbert SanGravl Co.
                                      Herbert SanGravl Co.,
                               New Johnsonville, TN, March 3, 1997.
Hon. Pete V. Domenici,
Chairman, Subcommittee on Energy and Water Development,
U.S. Senate, Washington, DC.
    Dear Sir: We Support the Corps and TVA fiscal year 1998 budget 
request.
    We support funding requests for Kentucky Lock Project (Corps) and 
Chickamauga Lock Project (TVA).
    We support continuation of navigation, flood control, water and 
land resource development on the Tennessee and Cumberland Rivers at no 
less than the current level no matter which agency has the 
responsibility.
    We support inland waterway navigation as an environmentally sound 
and cost efficient transportation mode in our region, helping to reduce 
freight rates and thus promoting trade and development.
    We support the Tennessee and Cumberland Rivers as a vital natural 
resource (and therefore its manintenance) in our region as it pertains 
to our industry, municipality or interests in any number of the 
following ways: navigation, hydropower generation, recreation, flood 
and erosion control, agricultural irrigation, recreation and tourism, 
fish and wildlife habitat, drinking water, ground and surface water 
management, water quality, water supply, wetlands, drought management, 
reservoirs management.
    We support sound economic development efforts to improve the 
Tennessee and Cumberland Rivers as a vital transportation link for the 
Tennessee and Cumberland River Valleys to export goods to other 
national and international markets via our inland waterway system.
            Sincerely,
                                    John B. (Jack) Herbert,
                                                         President.
                                    Thomas C. Herbert, Sr.,
                                                    Vice President.
                                 ______
                                 
   Prepared Statement of Donald G. Waldon, Administrator, Tennessee-
                Tombigbee Waterway Development Authority
    The Tennessee-Tombigbee Waterway Development Authority is pleased 
to have this opportunity to submit its views and recommendations 
concerning funding for water and related programs in fiscal year 1998 
for consideration by you and your committee.
    The Authority is an interstate compact, comprised of the states of 
Alabama, Kentucky, Mississippi, and Tennessee, established to promote 
the Tennessee Tombigbee Waterway and its economic and trade potential.
    We are most concerned about the Administration's budget for the 
Corps of Engineers now before your Committee. For example, it is 
nonsensical to propose cutting funds needed to properly maintain 
projects already completed and in operation. These proposed cuts in the 
Corps' O&M program, if not restored, will reduce the public benefits of 
these investments and will eventually result in structural 
deterioration of the affected projects.
    Tenn-Tom Waterway Funding.--The most irresponsible part of the 
proposed budget for the Corps is the recommended 29 percent cut in the 
waterway's O&M funding, more than for any other waterway. This drastic 
reduction will not provide sufficient funds to operate the project 
without seriously reducing, if not eliminating, its commerce and other 
benefits. We respectfully implore you and your committee to fund the 
maintenance of the Tenn-Tom in 1998 at about the current level of 
funding or $23 million.
    Kentucky Lock.--The existing 50-year-old lock at Kentucky Dam on 
the Tennessee River is one of the worst bottlenecks on the entire 
inland waterway system. The lock can not accommodate current commerce 
causing delays of an average of five hours to transit the antiquated 
structure. These costly delays to shippers are expected to double as 
commerce grows.
    The Administration's budget proposes to delay construction of the 
new 1200-foot lock at Kentucky Dam until 2008 or later. Given the 
importance of this navigational improvement to the nation's waterway 
system, this plan is shortsighted and unacceptable. The Authority 
recommends the $6 million be approved for the Kentucky Lock which will 
permit the Corps to start construction of this much needed facility in 
1998.
    Tennessee Valley Authority.--We are most concerned about the 
potential adverse impacts of the TVA Chairman's unexpected 
recommendation to not seek federal funds after 1998 will have on the 
Tenn-Tom region if approved by the Congress. TVA has been the dominant 
agency for resource development is this region for the past 60 years. 
To relinquish these responsibilities suddenly with little or no thought 
or planning for this transition is unconscionable.
    The Authority does not believe that such a wide sweeping change in 
this agency's fundamental responsibilities should be consummated by the 
budget process. Such drastic changes should only be effectuated by 
legislative amendments to TVA's organic act. This legislative process 
will ensure input from the public affected by the elimination of these 
federal services and that those programs proposed for transfer to other 
agencies or eliminated are more carefully evaluated.
    Again, we thank you for the opportunity to express our views on 
these most important issues affecting our region.
                                 ______
                                 
    Prepared Statement of Fob James, Jr., Governor, State of Alabama
    Thank you, for the opportunity to provide our views concerning the 
Federal water resources activities and projects in Alabama. I join with 
the Tennessee-Tombigbee Waterway Development Authority; the Warrior-
Tombigbee Development Association; the Coosa-Alabama River Improvement 
Association; the Tri-Rivers Waterway Development Association; the 
Tennessee River Valley Association and others in support of the 
continuation of Federal water resource projects in Alabama.
    Our state and Nation have been blessed with water resources which 
lend themselves to the development and use for the benefit of our 
citizens. Water resource developments in Alabama include: the deep 
harbor and extensive port facilities at the Port of Mobile, providing 
export opportunities for the region and nation's products; the 
Tennessee-Tombigbee Waterway providing a vital connecting link to the 
inland waterway system and the heartland of our nation; the Warrior-
Tombigbee Rivers waterway providing opportunities to utilize our 
abundant coal resources for our domestic use and export of steel, pipe, 
and other products; the Coosa-Alabama and the Chattahoochee-
Apalachicola waterway providing the opportunity for development, 
transportation of natural resources, agricultural and forest products; 
the Tennessee River waterway providing a vital transportation link in 
the Tennessee River Valley of Alabama; and the Gulf Intracoastal 
Waterway providing a vital waterway link to the ports of the Gulf of 
Mexico.
    All of the waterways in Alabama are connected to and are an 
integral part of, our national inland waterway transportation system 
providing a conduit for the economical and safe movement of commerce.
    I respectfully request your consideration and assistance by 
providing the Federal funding necessary for the full time operation of 
the Federal waterway facilities and projects in Alabama. This Federal 
support is necessary to ensure the continuation of these projects and 
to allow for use of these important facilities and supporting 
facilities, both public and private. The Federal funding, an essential 
element, represents only a portion of the investment and commitment 
necessary to utilize these resources. A combination of local 
investment, both private and public, is also necessary to gain benefits 
for our citizens and nation.
    In addition to my support of the inland waterway system, it is my 
pleasure to provide the Subcommittee with an up-date on a regional 
water resource conflict between Alabama, Florida, Georgia and the Corps 
of Engineers. On January 3, 1992, the states of Alabama, Florida, 
Georgia and the U.S. Army Corps of Engineers signed a Memorandum of 
Agreement (MOA), concerning interstate water resource issues in the 
Alabama-Coosa-Tallapoosa (ACT) and the Apalachicola-Chattahoochee-Flint 
(ACF) River Basins. This agreement which will terminate on December 31, 
1997. The MOA, temporarily set aside the interstate dispute between the 
parties, while Alabama, Florida, Georgia and the Corps of Engineers 
jointly participate in the ACT/ACF Comprehensive Water Resources Study. 
This study will provide information which will assist in an 
understanding of the capabilities of the water resources to meet the 
forecast needs of the region for the foreseeable future. It is also 
providing tools to evaluate water management options to meet future 
demands with the finite water resources.
    Recently the states (Alabama, Florida and Georgia) and the Federal 
government (represented by the Justice Department) completed 
negotiations on the formation of two interstate compacts, one for the 
Alabama-Coosa-Tallapoosa Basin and another for the Apalachicola-
Chattahoochee-Flint Basin. Both Alabama and Georgia have now completed 
state ratification of the compacts and Florida is currently considering 
the ACF compact, with passage expected shortly. Soon the proposed 
compacts will be forwarded to Congress for consideration and 
ratification. Although much work remains, this is a significant step 
forward and the Subcommittee's past support has been instrumental in 
this very positive step toward resolution of these interstate water 
resource issues.
    With the continued endorsement of the Subcommittee, in providing 
the funding necessary for the Federal water resources projects in 
Alabama, I believe we can successfully address the complex issues 
facing us and best utilize these water resources to the benefit of the 
Nation.
    Thank you, and the other members of the Subcommittee, for your 
support of the Federal water resource projects and activities in 
Alabama and the Nation.
                                 ______
                                 
Letter From Sara Peebles, Director, Industrial Board of Pickens County, 
                                   AL
                        Industrial Board of Pickens County,
                                    Carrollton, AL, March 18, 1997.
Hon. Pete Domenici,
Chairman, Appropriations Subcommittee on Energy and Water Development,
U.S. Senate, Washington, DC.
    Dear Senator Domenici: I am writing to express concern regarding 
the proposed 29 percent cut in funding for operation and maintenance of 
the Tennessee-Tombigbee Waterway for fiscal year 1998.
    Pickens County, Alabama is fortunate to have the waterway running 
through its boundaries. I cannot overstate the importance of the 
Tennessee-Tombigbee Waterway to the economic development of the rural, 
agriculture-oriented area served by this waterway. The impact it has on 
commerce as well as recreation and tourism is crucial.
    All the citizens of Pickens County join me in respectfully 
requesting your Appropriations Subcommittee on Energy and Water 
Development to restore the appropriation for operation and maintenance 
of the Tennessee-Tombigbee Waterway to at least $23 million in fiscal 
year 1998.
    Thank you for your consideration.
            Sincerely,
                                              Sara Peebles,
                                                          Director.
                                 ______
                                 
     Prepared Statement of David J. Tarasevich, President and CEO, 
                            Tuscaloosa Steel
    I was very disappointed to learn of the President's proposed budget 
of $16.2 million versus the requested $23 million by the Waterway 
Development Authority for the operation and maintenance of the 
Tennessee-Tombigbee Waterway during the fiscal year 1998. This 29 
percent reduction is extremely excessive and will drastically affect 
the waterway and its ability to generate benefits.
    When applied across the board these cuts will have a negative 
impact on commercial navigation. Maintenance dredging to maintain 
authorized channels for barge traffic will be drastically reduced, as 
well as public access to recreational facilities, some of which will 
likely be closed. Also wildlife habitat will be reduced to a caretaker 
status.
    Tuscaloosa Steel Corporation is a heavy user of the Tenn-Tom 
Waterway System. We barge into our plant approximately 300,000 tons of 
scrap; 350,000 tons of direct reduced iron pellets; and 50,000 tons of 
pig iron on an annual basis. Outbound shipments over the waterway 
consist of 100,000 tons of finished products annually.
    We solicit your support for the $23 million appropriation as 
supported by the Waterway Development Authority to continue regular 
operation and maintenance of this system.
                                 ______
                                 
 Prepared Statement of Wayne Meunier, Port Director, Paducah-McCracken 
                       County Riverport Authority
    The Paducah McCracken County Riverport Authority strongly opposes 
the Clinton Administration's proposed 26 percent cut in funding for 
operation and maintenance of the Tennessee-Tombigbee Waterway in the 
fiscal year 1998. This cut, if implemented, would not only affect those 
who are located on the Tenn-Tom, but would adversely affect shippers 
and consumers throughout the Inland Waterway System.
    Our terminal facility has enjoyed an increase in domestic, import 
and export product handling since the Tenn-Tom was opened in 1984. We 
feel markets have opened up for a variety of products and services 
which rely heavily on the Tenn-Tom and positive economic development 
has been realized along its route through Alabama, Mississippi, and 
Tennessee.
    We encourage your committee to restore the appropriation for fiscal 
year 1998, to at least $23 million. This would allow this $2 billion 
investment to operate in the manner for which it was intended.
    Additionally, we request Congress to appropriate $6 million to 
begin construction, next year, of the proposed new lock at Kentucky 
Dam. The current lock, with its size limitations creates delays of 
barge traffic to and from the Tenn-Tom. It is imperative the new lock 
project begins and does not remain an obstacle to further economic 
growth along the Tenn-Tom corridor.
    Thank you for your favorable consideration in both matters.
                                 ______
                                 
      Prepared Statement of Gary K. Doom, Director, Marketing and 
               Transportation, RECO Transportation, Inc.
    I am very concerned over the proposed reduction in funding for the 
operation and maintenance of the Tennessee-Tombigbee Waterway in the 
President's proposed budget for fiscal year 1998. If the President's 
inadequate recommendation of $16.2 million is approved by congress, the 
waterway and its ability to generate benefits will be drastically 
affected.
    Our company shipped approximately 750,000 tons of crushed stone 
down the waterway in 1996 to serve coastal markets with economically 
priced construction aggregates. This tonnage is expected to rise to 1.1 
million tons by 1998.
    Funding should be restored to a level of $23 million or about the 
current level. Without these funds, it will be impossible to maintain 
authorized channel dimensions for barge traffic and our tows must be 
diverted to the Mississippi River adding nearly $2 million to our 
annual transportation costs by 1998. This increase ultimately would be 
borne by the consumer. Additionally, recreational facilities and 
wildlife habitat will be adversely impacted.
    I also support a $6 million appropriation to initiate construction 
of the proposed new lock at Kentucky Dam. This 50 year old lock is 
totally inadequate to accommodate growing commerce. Delays are adding 
significant dollars to transportation costs.
    I appreciate your consideration and assistance. Please call on me 
if I can provide further information or help in any way.
                                 ______
                                 
Prepared Statement of R. Todd Vanderpool, President, Columbus, Deposit 
                         Guaranty National Bank
    The proposed level of funding for the operation and maintenance of 
the Tennessee-Tombigbee Waterway for the next fiscal year is very 
disappointing.
    A reduction in funding was expected, but a proposed decrease from 
$22.6 million to $16.2 million is unreasonable. This 29 percent 
reduction for Tenn-Tom is extremely excessive compared to a 5 percent 
cut for the Corps' entire O&M program.
    Since the Tenn-Tom met or exceeded the performance thresholds 
established by the Corps' O&M Cost Reduction Task Force, the reduction 
in funding for the waterway is difficult to comprehend. However, the 
Tenn-Tom has all ready sustained a much greater funding cut than those 
projects that failed these performance tests, causing even greater 
confusion about the budget recommendation.
    Lowndes County and the Eastern counties in Mississippi have greatly 
benefitted from the economic impact that this waterway provides. The 
destruction of this asset through inadequate funding will, as a result, 
have a deleterious effect on our growth and development.
                                 ______
                                 
  Prepared Statement of Thomas E. Day, Secretary, Tennessee Tombigbee 
                      Waterway Development Council
    As current Secretary of the Tennessee Tombigbee Waterway 
Development Council, I would like to make the following plea:
    1. Under the President's current budget, funding for O&M on the 
Tenn-Tom Waterway has been cut approximately 30 percent. We feel that 
the O&M budget should be restored to the approximate level of fiscal 
year 1997 at $23,000,000. There are already approximately $2.5 million 
of O&M that has been deferred for fiscal year 1997. With the current 
flooding that is occurring in the South, an actual increase in O&M may 
be needed. This $2 Billion investment is very important to our area, 
not only as a means of shipping, but from a recreational standpoint.
    2. It is very important that Congress appropriate $6 million to 
begin the construction of an additional lock at Kentucky Dam. The 
current lock is already very congested. In the near future, major 
maintenance will have to be performed on the lock, causing two six-
month closures. If construction begins now on the new lock, it could be 
completed before the maintenance is required.
    Please give these two matters your consideration.
                                 ______
                                 
  Prepared Statement of William H. Dyer, President, Tennessee Valley 
                              Towing, Inc.
    I wish to solicit your support for continued funding of the Tenn-
Tom Waterway and the additional lock at Kentucky lock. Specifically 
that is for $23 million for the Tenn-Tom Waterway for 1998 and $6 
million to start construction on Kentucky lack.
    Our waterway infrastructure is of utmost importance to our 
continued progress and has proven to pay big dividends. The Tenn-Tom 
Waterway (although it has been unjustly maligned) actually has worked 
wonderfully as an economic development effort. The Tenn-Tom Corridor is 
going great guns and appears to have a very bright future and will pay 
back the tax dollars spent in spades. Kentucky lock is already at full 
capacity, which is proof of the Tennessee Valley's growth and vitality 
and the need for a new lock will be desperate by the time it could be 
built. Not to build the new lock would be the equivalent of girdling a 
flourishing tree.
    Please use your influence to keep our river infrastructure 
producing dividends to the whole Country.
                                 ______
                                 
Prepared Statement of Charles A. Haun, Executive Vice President, Parker 
                          Towing Company, Inc.
    My name is Charles A. Haun and I am Executive Vice President for 
Parker Towing Company of Tuscaloosa, Alabama.
    We are a full service marine transportation company operating a 
fleet of boats and barges and twelve ports on the southern portion of 
the U.S. Inland Waterways System. We are involved in the transportation 
of all types of commodities including coal, coke, ores, stone, forest 
products, steel, and manufactured products. We have been in operation 
for over fifty years.
    Parker Towing Company endorses and supports fully the efforts of 
the Warrior-Tombigbee Development Association to improve the overall 
operation of this vital waterway system. The Warrior-Tombigbee System 
and the Port of Mobile are of great importance to our company and the 
industries we serve. Proper and adequate funding of the waterway 
project will ensure that more industries can rely on this energy 
efficient delivery system. The regions' employment and economic well-
being could be adversely affected to a great degree should the 
efficiency of the waterway be degraded.
    As a member of the Warrior-Tombigbee Development Association, 
Parker Towing Company emphatically supports an appropriation of $16.2 
million for the Corps of Engineers for operation and maintenance of the 
Warrior-Tombigbee System for fiscal year 1998 and additional capability 
funding of $4.0 million for a total of $20.2 million. In addition, we 
support the Corps' request for operation and maintenance funds for 
Mobile Harbor in the amount of $23.2 million.
                                 ______
                                 
 Letter From Carlton J. Melton, Vice President, SSA Mississippi River 
                                 System
                              SSA Mississippi River System,
                                        Mobile, AL, March 10, 1997.
Hon. Pete Domenici,
Chairman, Appropriations Subcommittee on Energy and Water Development,
U.S. Senate, Washington, DC.
    Dear Chairman Domenici: This letter is in response to cuts in the 
fiscal year 1998 Operation and Maintenance budget of the Tennessee-
Tombigbee Waterway. It is our understanding that President Clinton has 
recommended to Congress that the funding be at $16.2 million. This 
level of funding will have a drastic negative effect on the waterway 
and its ability to generate benefits.
    Our company has been actively operating on the Tennessee-Tombigbee 
at Columbus, Mississippi, for over ten years. This one facility 
currently employs 15-25 people on a full-time basis and we are in the 
process of expanding our operations to increase this number to 40-50 
people. Considering the support industries and connecting links of the 
logistics chain, our business in Columbus affects approximately 1,000 
people. The proposed cuts seriously endanger the ability of the 
waterway to generate these type jobs and the flow of commerce currently 
being enjoyed on the waterway.
    SSA proposes that the funding level remain at the current level, or 
at least $23 million. As Americans, we thoroughly understand that it is 
our duty to do what we can to reduce the national debt. However, 
considering the jobs and money spent on this project initially, it 
seems imprudent to allow a few million dollars to endanger the jobs and 
commerce currently being realized on the Tennessee-Tombigbee Waterway.
    Thanking you in advance for your consideration to maintain the 
current O&M level funding on the Tennessee-Tombigbee Waterway for 
fiscal year 1998, I remain.
            Sincerely yours,
                                         Carlton J. Melton,
                                                    Vice President.
                                 ______
                                 
   Letter From Charleigh D. Ford, Jr., Executive Director, Columbia-
                Lowndes Economic Development Association
         Columbus-Lowndes Economic Development Association,
                                      Columbus, MS, March 13, 1997.
Hon. Pete Domenici,
Chairman, Appropriations Subcommittee on Energy and Water Development,
U.S. Senate, Washington DC.
    Dear Senator Domenici: I am writing you with regards to our concern 
for the proposed funding of the Tennessee-Tombigbee Waterway for the 
fiscal year 1998. It is our understanding that the Clinton 
Administration is proposing a drastic cut in the funding for 
maintenance and upkeep on the waterway. In our opinion, should this cut 
be implemented, the Tennessee-Tombigbee Waterway would be drastically 
diminished as an effective economic development tool for this area.
    Our organization is charged with the responsibility of industrial 
development for Columbus and Lowndes County area. We are fortunate to 
have the Tennessee-Tombigbee Waterway running through our county and 
the headquarters of both the Corps of Engineers' offices and the Tenn-
Tom Waterway Development Authority located here. We are very much aware 
of the economic impact this waterway has on our area and certainly 
would not want anything to happen to the overall effectiveness of this 
major transportation facility.
    In our economic development presentations, our transportation 
assets are very important. Of course, a major part of the 
transportation offerings here is the ability to ship by barge on the 
Tenn-Tom Waterway. If that is taken away or diminished to the point 
that it is no longer a viable option to shippers and manufacturers, 
then we lose a tremendous advantage that we have begun to enjoy in this 
region.
    For these reasons, we strongly encourage your Appropriations 
Subcommittee on Energy and Water Development to restore the 
appropriation for the operation and maintenance of the Tennessee-
Tombigbee Waterway in fiscal 1998 to at least $23 million.
    I know I join with the many communities and organizations that 
benefit from the Tenn-Tom Waterway in respectfully requesting your 
consideration on this matter. Should you desire additional information 
or would like for any of us to come and testify before your committee, 
we would be glad to do so.
            Sincerely,
                                    Charleigh D. Ford, Jr.,
                                                Executive Director.
                                 ______
                                 
 Prepared Statement of Ted Moore, Executive Director, Humphreys County 
                                 E.D.C.
    Humphreys County, Tennessee is a small rural community of 16,000 
citizens located along the Tennessee River, approximately 65 miles west 
of Nashville. In fact, our entire western boundary is the Tennessee 
River. Several major employers are located in this area and these 
employers are dependent on river transportation.
    In the early 1980's a large aluminum plant employing 1,200 workers 
closed, sending our community into a depressed county status. Our 
unemployment rate rose to a high of 25 percent. Only recently Tennessee 
removed Humphreys County from their listing as a depressed county. 
However, our unemployment is still in double digits, (approximately 12 
percent).
    Major capital projects are being planned or are in process by river 
dependent industry that will help bring our economy back to an 
acceptable level. One of these projects is a public port. Our county is 
fortunate to have river, rail and interstate highway (I-40) located 
within its boundary. We are the only county in the region with these 
assets.
    If the Tennessee-Tombigbee recommended budget for 1998 of $23 
million is lowered to the proposed level of $16.2 million, 
transportation and recreational activities could be drastically 
affected. It is crucial that the Tenn-Tom be operated and maintained at 
proper levels to insure commercial navigation and public access to 
recreational facilities.
    Even though we are a small rural community, our existing industry 
produces goods distributed in excess of seventy foreign markets. River 
transportation and the Tenn-Tom are important for access to these 
markets.
    With proposed dismantling of TVA and excessive cuts in Tenn-Tom's 
budget to the point of affecting usage, the rural waterway communities 
and industry in mid-America appear to be under seize by our Federal 
government.
    I applaud the effort of our elected officials to balance the 
Federal budget but let's get rid of the waste first.
                                 ______
                                 
     Letter From Lawrence L. Merrihew, Vice President, Regions Bank
                                              Regions Bank,
                                        Mobile, AL, March 17, 1997.
Hon. Pete Domenici,
Chairman, Appropriations Subcommittee Energy and Water Development,
U.S. Senate, Washington, DC.
    Dear Senator Domenici: I'm writing concerning the operation and 
maintenance of the Tennessee-Tombigbee Waterway for the next fiscal 
year. It's my understanding the waterway has suffered a drastic 
decrease from the current level of funding of $22.6 million to $16.2 
million in fiscal year 1998. This amounts to a 29 percent deduction, 
and is obviously outside the O&M budget cut of 5 percent.
    When we began constructing this waterway, numerous studies were 
done to prove the cost-benefit ratio. The waterway has now proven its 
benefit to the nation, and in fact, just this past year, reached nine 
million tons. Every year, the tonnage increases, as does waterway 
dependent employment. Now we see a great increase in tourism related 
industries, and continued conservation of the wildlife habitat even 
further enhances the value of this great asset.
    There's no question, reduced funding will have a very negative 
impact on this region's economy. We employ you to please consider level 
funding, or no more than a 5 percent decrease, as paralleling the O&M 
budget. We sincerely appreciate your diligence and efforts to utilize 
our tax dollars efficiently, and appreciate your consideration of this 
plea.
            Respectfully yours,
                                      Lawrence L. Merrihew,
                                                    Vice President.
                                 ______
                                 
  Prepared Statement of H.P. Dorlon, Jr., Regional Manager, Sales and 
                    Operations, Vulcan Materials Co.
    I am very concerned over the proposed reduction in funding for the 
operation and maintenance of the Tennessee-Tombigbee Waterway in the 
President's proposed budget for fiscal year 1998. If the President's 
inadequate recommendation of $16.2 million is approved by congress, the 
waterway and its ability to generate benefits will be drastically 
affected.
    Our company shipped approximately 750,000 tons of crushed stone 
down the waterway in 1996 to serve coastal markets with economically 
priced construction aggregates. This tonnage is expected to rise to 1.1 
million tons by 1998.
    Funding should be restored to a level of $23 million or about the 
current level. Without these funds it will be impossible to maintain 
authorized channel dimensions for barge traffic and our tows must be 
diverted to the Mississippi River adding nearly $2 million to our 
annual transportation costs by 1998. This increase ultimately would be 
borne by the consumer. Additionally, recreational facilities and 
wildlife habitat will be adversely impacted.
    I also support a $6 million appropriation to initiate construction 
of the proposed new lock at Kentucky Dam. This 50 year old lock is 
totally inadequate to accommodate growing commerce. Delays are adding 
significant dollars to transportation costs.
    I appreciate your consideration and assistance. Please call on me 
if I can provide further information or help in any way.
                                 ______
                                 
Prepared Statement of W.R. McKinzey, Jr., Mayor, City of Aliceville, AL
    The City of Aliceville is very disappointed to learn that there is 
a proposed cut in funding for the Tennessee-Tombigbee Waterway for the 
next fiscal year. This will cause a great hardship on our area.
    We have located in our area four ports and four recreation areas 
which employ a large number of persons. In addition, the largest RV 
Park on the river is located in Pickensville, as well as another large 
RV Park. The Tenn-Tom Visitor Center is located in Pickensville. A 
Marina is located on The Aliceville Lake just north of the Tom Bevill 
Lock and Dam.
    There is a tremendous amount of fishing by the general public and 
numbers of fishing tournaments are held on the river each year. When 
these people come to the county and cities they spend many dollars 
which helps the local economy. In addition to fishing, there is lots of 
hunting on and around the river.
    There are hundreds of boats of all sizes that use the river and 
there is one of the largest boat dealership in the State of Alabama 
located in Pickensville that would not be here without the river.
    The recreation aspect of the river alone is worth the entire cost 
of building and maintaining the river.
    There are also hundreds of houses along the waterway and are 
directly there as a results of the river. Most of these houses are of 
the more expense type and help the tax base tremendously. This has 
caused the population of the county and cities to increase resulting in 
store openings or reopenings.
    Another benefit of the river is flood control. In the last 12 years 
or so we have had only three floods and these were all in one year in a 
period of about 3-4 months.
    It will be very detrimental in many ways for less funding of the 
Tenn-Tom Waterway. As stated above the river is of a great benefit to 
our area and we are sure the same is true for the entire length of the 
river.
    Please do everything in your power to help in not reducing the 
amount of funds needed to operate the waterway.
                                 ______
                                 
         Letter From Jimmy Fannon, Mayor, City of Columbus, MS
                                          City of Columbus,
                                      Columbus, MS, March 17, 1997.
Hon. Pete Domenici,
Chairman, Appropriations Subcommittee on Energy and Water Development,
U.S. Senate, Washington, DC.
    Dear Senator Domenici: I am writing you with regards to our concern 
for the proposed funding of the Tennessee-Tombigbee Waterway for the 
fiscal year 1998. It is our understanding that the Clinton 
Administration is proposing a drastic (29 percent) cut in the funding 
for operation and maintenance on the waterway. In my opinion, should 
this cut be implemented, the Tennessee-Tombigbee Waterway would be 
drastically diminished as an effective economic development tool for 
this area.
    We are fortunate to have the Tennessee-Tombigbee Waterway running 
through our county and the headquarters of both the Corps of Engineers' 
offices and the Tenn-Tom Waterway Development Authority located here. 
We also have a paper manufacturing company, a class A port facility and 
a chemical company that has either located or expanded in our area as a 
result of the availability of the Tenn-Tom Waterway. We are very much 
aware of the impact this waterway has on our area and certainly would 
not want anything to happen to the overall effectiveness of this major 
transportation facility.
    A major part of the transportation offerings for our community is 
the ability to ship by barge on the Tenn-Tom Waterway. If that is taken 
away or diminished to the point that it is no longer a viable option to 
shippers and manufacturers, then we lose a tremendous advantage that we 
have begun to enjoy in this region.
    For these reasons, we strongly encourage your Appropriations 
Subcommittee on Energy and Water Development to restore the 
appropriation for the operation and maintenance of the Tennessee-
Tombigbee Waterway in fiscal year 1998 to at least $23 million.
    I know I join with the many communities and organizations that 
benefit from the Tenn-Tom Waterway in respectfully requesting you 
consideration on this matter. Should you desire additional information 
or would like for any of us to come and testify before your committee, 
we would be glad to do so.
            Sincerely,
                                              Jimmy Fannon,
                                                             Mayor.
                                 ______
                                 
    Prepared Statement of John B. Herbert, President, and Thomas C. 
             Herbert, Vice President, Herbert SanGravl Co.
    We request appropriation of $23 million for the operation and 
maintenance of the Tennessee-Tombigbee Waterway in fiscal year 1998. 
Our company depends on commerce going and coming on the Tennessee-
Tombigbee Waterway from the Tennessee River.
    We also request the appropriation of $6 million to start 
construction of the proposed new lock at Kentucky Dam.
    Our company depends on the Tennessee-Tombigbee Waterway and 
Kentucky Lock for half of our business. Thirty six employees at our 
company ask you to save their jobs.
                                 ______
                                 
 Prepared Statement of Gregory Woodell, President, American Shore and 
                     Beach Preservation Association
                       america's coastal heritage
    Beaches are a vital part of American's heritage from ``sea to 
shining sea.'' As President of the American Shore and Beach 
Preservation Association, I am speaking for countless Americans who 
want America's beaches preserved and maintained as a national asset.
    America's beach heritage is now at risk because the Administration 
threatens to walk away from the Federal government's traditional role 
protecting American lives and property from hurricane and storm 
disaster. More people have died in the United States from coastal 
hurricane flooding than any other natural disaster. Ironically, loss of 
America's protective beaches is largely caused not by natural forces 
but by Federal navigation, inland flood control, and water-supply 
projects. For example, peer-reviewed studies by Professor Robert Dean, 
University of Florida, show that 80-85 percent of Florida's erosion is 
caused by Federal navigation jetties interrupting natural longshore 
sand flow and also by dredged-material disposal beyond the littoral 
zone. Other studies show that dams built for inland-flood control and 
water supply in southern California have impounded the sand that 
naturally flows to the coast and maintains beaches. Similarly, Federal 
dams on the east coast are impounding vast quantities of sand that 
would naturally maintain east-coast beaches. Many people have heard 
that the tremendous erosion problems of Egypt's Nile delta are caused 
by the high Aswan dam impounding sand, but are unaware that Federal 
dams in America produce the same problem, but at a much larger scale.
    If the Federal government successfully turns its back on the beach-
erosion problems it largely creates, I predict the court system will be 
inundated with lawsuits to force the Federal government to mitigate 
erosion damages it produces. Currently, most local and state 
governments and individuals are waiting to see whether the Federal 
government is going to walk away from its obligations. A few lawsuits 
have been filed such as one recently in Browared County, Florida. If 
these suits are pressed and are successful, the Federal government may 
face beach-erosion problems alone without its current coastal state and 
local cost-sharing partners.
    The current administration policy on coastal flooding and storm-
damage is a policy of armoring and destroying America's beaches. The 
only way a coastal community can obtain the Federal flood-control 
assistance available to all other Americans is to armor its beaches 
since the Administration supports armoring for coastal flood-damage 
reduction, but not beach nourishment.
    I would like to submit for the record economic studies that show 
travel and tourism is the Nation's leading industry, employer, and 
earner of foreign revenue. Beaches are the Nation's leading tourist 
destination with 85 percent of all tourist revenues coming from coastal 
states. Foreign tourists spend $80 billion annually in the U.S. and are 
responsible for the largest trade surplus in America's overall trade 
deficit. More than 90 percent of foreign-tourist spending is from 
coastal states largely due to the attraction of beaches. The Federal 
government receives about $4 billion annually in tax revenues just from 
foreign tourists. This is about 200 times as much as the Federal 
government spends annually on beach-nourishment projects. In fact, 
Federal tax revenues just from the two million foreign tourist who 
visit Miami beach each year are about six times greater than annual 
Federal government spending for all U.S. beach-nourishment projects. In 
contrast, Spain is spending more on beach nourishment in five years 
than the U.S. has spent in the last 50 years. If America's beaches are 
not maintained, foreign tourists will go to foreign beaches that are 
maintained, and Federal tax revenues will suffer. The Federal 
government receives the majority of foreign-tourist tax revenues with 
local governments receiving just 14 percent of these tax revenues. 
Maintenance of beach infrastructure cannot be solely a local 
responsibility since local governments receive a minority of beach-
tourist tax revenues.
    The Federal government must not walk away from America's beach-
erosion problems that it has largely created, must not promulgate 
policies that support armoring of America's coasts, and must not allow 
deterioration of beaches that are the largest factor in reducing 
America's trade deficit and generate far more Federal tax revenues from 
foreign tourists alone than the Federal government spends maintaining 
beaches.
    I am confident that Congress will respond to the will of the 
American people and ultimately prevent implementation of the 
Administration's ill-conceived policies. However, I have serious 
concerns that this process will be drawn out and in the mean time 
America's beaches will suffer and life and property will be put at risk 
by project delays. I fear the Corps of Engineer's infrastructure that 
supports shore-protection and coastal-flood projects will be 
eliminated. Will Corps of Engineers Coastal experts be the first to be 
eliminated in the Corps' manpower cutbacks because the mission question 
is unresolved? Will Corps of Engineers's need to reduce costs and 
improve performance of shore protection and coastal-flooding projects 
be eliminated? Will critical Corps' long-term measurements of coastal-
wave climate, hurricane surge, and beach-nourishment performance be 
abandoned because the mission question is unresolved?
    The Administration needs to immediately withdraw its policy 
abandoning America's beaches. The American Shore and Beach Preservation 
Association would like to work with the Administration and Congress in 
determining how to maintain the Federal government's traditional 
commitments in this area of needed deficit reduction. However, many 
issues can be explored such as changes in the Federal cost share, 
increased minimum benefit-coast ratios, and the length of Federal 
commitment. The strong rejection by Congress of proposed Administration 
mission changes was bipartisan. It is time the Administration works 
with Congress, state and local governments, and citizen groups to 
fairly and rationally determine how to maintain the Nation's beach 
heritage in a cost-effective way and protect coastal citizens from 
coastal-flooding disasters. I pledge the support and participation of 
the American Shore and Beach Preservation Association in this process.
                                 ______
                                 
   Prepared Statement of Howard Marlowe, President, American Coastal 
                               Coalition
    The American Coastal Coalition appreciates this opportunity to 
provide the Subcommittee with our views concerning the Civil Works 
water programs of the Army Corps of Engineers. ACC is a nonprofit, 
national advocacy organization for our nation's coastal communities. 
Our members consist of government entities, government officials, 
business people, trade associations, property owners and others who 
share a common concern for the welfare of Coastal America.
    We are grateful that the Subcommittee has provided significant 
funding for the Corps' civil works programs over the past two years. 
Your statements of opposition to the Administration's proposed policy 
changes for these programs helped to pave the way for the passage of 
the Shore Protection Act last year (Sec. 227 of the Water Resources 
Development Act of 1996). That legislation made shore protection one of 
the missions of the Corps. Now, it rests in the hands of this 
Subcommittee to determine whether that legislation will be enforced.
    ACC believes that the shore protection, flood control, and 
navigation programs of the Corps are vital to our nation's economy. We 
have selected shore protection as the focus of our efforts since this 
program was a Corps `stepchild' prior to passage of the Shore 
Protection Act. The Corps has been involved in shore protection 
projects for decades. However, most of this involvement resulted from 
its storm damage and flood control missions. Congress has now stated 
that shore protection is a vital concern that can stand on its own 
merits. That is because the nation's 97,000 miles of coastline are a 
vital part of its economy and ecology. Half of our population resides 
in coastal regions (including the Great Lakes). Our ports have been 
critical to the growth of our economy since the country was founded. 
Our beaches are a precious natural resource that attract far more 
visitors than all of our national parks combined. In many parts of our 
country, ports and beaches exist side-by-side. They are inseparable as 
part of a region's economy, yet that is not the way they have been 
treated by federal policy.
    Two years ago, the Administration proposed a revision in the role 
of the Corps that was intended to stop future dredging projects of 
small harbors and the future construction of most shore protection 
projects. Despite the fact that this proposal has been rejected by 
Congress, it is being implemented by the Administration. For fiscal 
1998, the President has proposed more than a 40 percent cut in funding 
for shore protection projects. That is a mere $60.5 million for shore 
protection and beach erosion projects, compared to the $106.7 million 
appropriated by Congress for the current fiscal year. No matter how the 
figures are sliced and diced, this is bad news for both the Corps and 
Coastal America. There is a 56 percent cut in studies and 
investigations. That means fewer projects are moving through the 
pipeline toward their construction phase. There is 42 percent reduction 
in construction dollars. That means fewer projects are being built.
    The ACC does not support specific projects. Rather, we support 
program and appropriations policies that will benefit Coastal America. 
There are two key actions this Subcommittee can take that will 
demonstrate its commitment to the preservation of America's sandy 
public beaches. First, we urge the appropriation of at least $100 
million for shore protection studies and construction projects in 
fiscal 1998. That is the level agreed upon by Congress last year. While 
it is less than the demand for currently authorized projects that 
either have received favorable reconnaissance studies or are ready for 
construction, this level of funding will enable many projects already 
in the pipeline to proceed without undue delay.
    Second, we strongly urge this Subcommittee to provide funding for a 
reconnaissance study of at least one `new start' shore protection 
project. A $100,000 appropriation is all that it takes to demonstrate 
that Congress rejects the Administration's anti-shore protection 
policies. There has been no appropriation for a reconnaissance study of 
a new shore protection project since the Administration announced its 
`proposed' policy changes. Unless this Subcommittee funds such a study, 
the pipeline of new shore protection projects will be cut off. Without 
such a study, there will be an end to the federal shore protection 
program over the next 15 to 25 years as the life of existing projects 
comes to an end.
    Again, we emphasize that the Water Resources Development Act of 
1996 explicitly provided for an ongoing federal role in the placement 
of sand on eroded beaches. Yet, the Administration has chosen to ignore 
that mandate. All Corps reports finding a national interest in new 
shore protection projects have been modified to state that, under 
Administration policy, the Corps proposes all funding to come from non-
federal sources. In other legislative venues, the ACC has proposed 
program changes which would achieve the Administration's goal of 
bringing more fiscal restraint to its shore protection efforts. So far, 
the Administration has not supported any of these changes. Instead, it 
has remained opposed to any continued federal shore protection role. It 
has referred to sandy beaches as places of recreation as if that term 
were a four-letter word. Yet, recreation and tourism is the country's 
second largest industry. It yields billions of dollars for the federal 
treasury, as well as the enormous dollar and job benefits its provides 
at the local and regional level. At the same time, the Administration 
has ignored the disaster mitigation role that sandy beaches play. Every 
time a major storm hits a coastal region, the beaches absorb the brunt 
of that storm's force. Healthy beaches protect property and save lives. 
Eroded beaches cannot perform that function. Ignoring the ongoing 
threat of erosion and the subsequent damage caused by storms is a 
costly and possibly life-threatening course of action.
    Earlier in my statement, I referred to the integral nature of ports 
and beaches. In some parts of the country, beach erosion is caused in 
large part by the existence of federally-maintained channels. Yet, the 
Administration would continue to spend money on maintaining these 
channels without recommending the expenditure of a single dollar to 
mitigate the beach erosion they cause. That policy makes no sense. It 
also invites costly legal challenges.
    In other parts of the country, the Administration proposes to end 
federal maintenance for smaller harbors. This is disastrous for both 
commercial fishing and recreational interests. It is especially 
harmful, however, in areas such as the West Coast where the dredged 
material from these harbors has been used successfully to repair 
adjacent beach erosion. There are also examples on the West Coast where 
human intervention (sometimes by the Corps) has resulted in a diversion 
of the natural watershed run-off, thus depriving a coastal region of 
the source of sand needed to replenish its beaches.
    We urge this Subcommittee to fund those projects which (a) assure 
that damage to adjacent beaches caused by federally-maintained channels 
is mitigated, and (b) permit the sand from federally-maintained 
channels to be placed on nearby public beaches. In addition, we are 
especially concerned that the Corps has used its authority to reprogram 
funds in a manner that has the effect of thwarting the policies set by 
Congress. Attached to this statement is correspondence between Members 
of Congress and the Corps which reflects that concern. We understand 
the importance of giving the Corps sufficient flexibility to make 
funding adjustments. However, it is equally important that the Corps be 
held fully accountable for each of its reprogramming decisions. If the 
Corps cannot assure Congress that it will replace, without further 
congressional appropriations, any funding for a project no later than 
the following fiscal year, we believe the Corps should not be permitted 
to enter into such a reprogramming.
    As the Corps restructures itself, there are two additional goals we 
urge this Subcommittee to support. First, the Corps must heighten its 
efforts to become `customer-friendly.' Its programs and policies need 
to be explained in a manner that the public can understand. For shore 
protection projects, the Corps' policies and guidelines are adopted 
without notice and public comment and published in a manner that makes 
it almost impossible for all-but-veteran Corps employees to find. 
Second, a way must be found to spread the shore protection expertise 
that can be found in three or four District offices of the Corps to 
other parts of the country. Non-federal sponsors of projects on the 
Gulf and West Coasts deserve to have access to the same level of Corps 
program and technical knowledge as those on the East Coast.
    If the federal shore protection program is allowed to wither, the 
inevitable result will be the armoring of America's coastline. Sea 
walls and other hard structures will be erected as property owners face 
the prospect of losing their residences and businesses to the ocean. 
The impact on our economy and environment of such a fortification of 
our coasts must be avoided.
    Mr. Chairman, there is no difference between riverine flooding and 
coastal flooding. Both are equally disastrous. The American Coastal 
Coalition urges this Subcommittee to give the nation's coastal 
residents the federal support they need and deserve.
                                 ______
                                 
           Prepared Statement of the City of Miami Beach, FL
    Mr. Chairman and Members of the subcommittee: The City of Miami 
Beach would first like to thank the members of the subcommittee for all 
their efforts in the past to provide support for the State of Florida's 
beaches and in particular, those of Miami Beach. Now, as you begin the 
difficult process of crafting the fiscal year 1998 Energy and Water 
Appropriations Bill, the city would like to bring to your attention an 
ongoing erosion problem for which a solution is desperately needed.
    Beaches are Florida's number one tourist ``attraction.'' Last year, 
beach tourism generated more than 16 billion dollars for Florida's 
economy and more tourists visited Miami Beach that visited the three 
largest national parks combined.
    In addition to their vital economic importance, beaches are the 
front line defense for multi-billion dollar coastal infrastructure 
during hurricanes and storms. When beaches are allowed to erode away, 
the likelihood that the Federal government will be stuck with 
astronomical storm recovery costs is significantly increased. The Army 
Corps of Engineers estimated that more than 70 percent of the damage 
caused to upland properties in Panama City Beach by Hurricane Opal 
could have been prevented if their pending beach renourishment project 
had been completed before the storm.
    The Florida Department of Environmental Protection estimates that 
at least 276 miles (35 percent) of Florida's 787 miles of sandy beaches 
are currently at a critical state of erosion. This includes the entire 
six miles of Miami Beach. As a result of the continuing erosion process 
and more dramatically, the intense winter storm occurring last 
November, almost all of the dry beach and sand dune were lost 
throughout the middle segment of Miami Beach. In addition, most of the 
Middle Beach dune cross-overs were declared safety hazards and closed, 
as the footings of the boardwalk itself were in immediate jeopardy of 
being undercut by the encroaching tides. If emergency measures, costing 
approximately $400,000 had not been taken by the City, there would have 
been considerable risk of coastal flooding west of the dune line in 
residential sections of Miami Beach. As you can see, this example 
points to the commitment we as a beach community have to our beaches, 
but federal assistance remains crucial. Our beaches must be maintained 
to ensure that our residents and coastal properties are afforded the 
best storm protection possible. Our beaches must also be maintained to 
ensure that beach tourism, our number one industry, is protected and 
nurtured.
    In 1987, the Army Corps of Engineers and Metropolitan Dade County 
entered into a fifty year agreement to jointly manage restore and 
maintain Dade County's sandy beaches. Since then, Metropolitan Dade 
County has been responsible for coordinating and funding the local 
snare of the cost for the periodic renourishment of our beaches.
    In order to ensure that adequate funding will continue to be 
available, the City of Miami Beach supports and endorses the 
legislative priorities and appropriation requests of Metropolitan Dade 
County, as they relate to the restoration and maintenance of Dade 
County's sandy beaches. Specifically, the City supports the $3.5 
million request for renourishment of the Surfside and South Beach 
areas.
                                 ______
                                 
   Prepared Statement of David M. Beasley, Governor, State of South 
                                Carolina
    Mr. Chairman, Members of the Committee, thank you for the 
opportunity to submit for the record comments regarding the 1998 Water 
and Energy Appropriations Bill.
    As stated last year in my testimony to this committee, South 
Carolina enjoys a positive and ongoing, partnership with the Federal 
Government in our efforts to maximize the investment on and return 
from, our states natural resources, upon which South Carolina's economy 
is so very dependent.
    Our lakes and reservoirs are critical to hydro-electric power 
production; intracoastal waterways and ports are key economic 
development components; and our beaches and shoreline essential to 
recreation and tourism.
    In the absence this year of oral testimony to your committee, my 
formal input for the record will be centered on areas considered 
significant to South Carolina's current economic vitality and future 
growth. Accompanying my statement are key supporting documents germane 
to the discussion, including short descriptions of U.S. Army Corps of 
Engineers approved projects that are currently ongoing or proposed, and 
individual S.C. State agency letters from the South Carolina State 
Ports Authority; South Carolina Department of Natural Resources; South 
Carolina Department of Commerce; South Carolina Office of Ocean and 
Coastal Resource Management (Department of Health and Environmental 
Control); South Carolina State Energy Office.
    It's obvious that the contents of this Appropriations Bill, and the 
actions of this subcommittee, have wide spread implications for the 
state of South Carolina.
    In commenting on this legislation, it's important to recognize the 
commitment South Carolina is making to support the Administration's 
goal of maximizing the return on investment with regard to scarce 
resources. We are supporters of balancing the budget, and are 
sympathetic to the difficult choices being made in the allocation of 
those scarce resources. Through our partnership with the Federal 
Government, South Carolina is leveraging the Federal contribution 
through improved economic development, job creation, promotion of 
private sector investment, and protection of the environment.
    South Carolina's economic development incentives are proving 
beneficial not just to our state, but the nation as a whole. For two 
straight years we've broken the five billion dollar barrier in capital 
investment, much to international corporations. South Carolina has 
created over 50,000 new jobs over the same period.
    It is my intention to convey to this committee the value of our 
partnership, and highlight those areas both where we can further the 
Administration's goals, and where we need Federal assistance sustaining 
critical project/program implementation. Only through mutual support 
can South Carolina effectively embark on crossing the ``bridge to the 
21st century''.
                         the port of charleston
    With regard to the Water and Energy Appropriations Bill and U.S. 
Army Corps of Engineers funding, South Carolina's ``center of gravity'' 
is the great Port of Charleston. A national asset, Charleston ranks 
behind only New York on the East and Gulf coasts as a container port. 
The Water Resources Development Act of 1996 authorizes the deepening of 
Charleston Harbor to 45 feet, yet the project was among those not 
included in the President's fiscal year 1998 Budget as a new 
construction start. This is an area of great concern to the citizens of 
South Carolina, and we urge you to reconsider its inclusion. The 
Charleston District of the Corps of Engineers has an approved 
capability for this project of $94,854,000. While full funding may not 
be attainable for fiscal year 1998, we request you include minimum 
funding in the amount of $1.5 million so that critical, time-consuming 
efforts such as coordination, approval, and signing of the Project 
Cooperation Agreement, and the advertisement of the first construction 
contract can be accomplished. This would allow fiscal year 1999 to be a 
productive year of construction. This project is vital to the State of 
South Carolina's economic development, for both domestic and 
international markets, and to delay construction start beyond fiscal 
year 1998 will have an adverse effect on not only our state, but the 
southeast U.S. as well. Please refer to the accompanying letter from 
the State Ports Authority for amplifying information on the importance 
of Charleston Harbor and the Port of Charleston.
    I would like to comment on three principle appropriation accounts 
within the Corps of Engineers (Civil Works) fiscal year 1998 budget 
proposal that have direct impact on South Carolina and its quality of 
life; General Investigations (Studies); Construction General; and 
Operations and Maintenance (O&M).
                                studies
    We are grateful for the support identified for the Santee, Cooper, 
Congaree Rivers; Charleston Estuary; Yadkin-PeeDee River Watershed; and 
the Atlantic Intercostal Waterway studies. They are all worthwhile, and 
valid, projects. The Director of South Carolina's Department of Natural 
Resources has elaborated on the importance, and necessity for such 
studies in his accompanying letter.
    With the navigational dependent growth and expansion taking place 
in Charleston Harbor, now is the time to investigate the feasibility of 
extending the deep draft navigational channel to the industrial 
facilities located above the upper limits of the Federally-maintained 
channel along the Cooper River. Present and future development along 
the Cooper River is currently being based on erroneous assumptions 
concerning the suitable navigability of the channel. This study will 
help qualify/quantify the navigational constraints of the existing 
channel and determine if a federal interest exists in extending the 
length, easing bends, and widening of the channel. We will be pursuing 
authorization for a Charleston Harbor extension study with our S.C. 
legislative delegation and the Charleston District of the Corps of 
Engineers. This study is urgently needed to help in the ``economic 
development'' decision-making process.
                              construction
    As alluded to earlier, the glaring exception to the construction 
appropriation for fiscal year 1998 is the omission of the Charleston 
Harbor deepening and widening project. Out of the $3,694,250,000 the 
President has requested for the Civil Works program of the Army Corps 
of Engineers, hopefully resources can be identified to protect the 
viability of a national asset like Charleston Harbor. To re-emphasize, 
this construction is a key component in the region's economic 
development planning, and is considered a ``show-stopper'' for 
industrial growth if not pursued as soon as possible.
    An essential program the Corps of Engineers has very successfully 
managed in South Carolina is the Continuing Authorities Program (CAP). 
This is a cost-shared program between the Federal Government and a non-
Federal sponsor.
    The CAP allows the Corps of Engineers to plan, design, and 
construct certain types of water resources improvements without 
specific Congressional authorization. The Charleston District Corps of 
Engineers Office currently has six requests for assistance from non-
Federal sponsors which are currently on hold due to lack of Federal 
funds. The requests include potential projects at Cow Castle Branch 
(Orangeburg County); Goose Creek (Berkeley County); Castle Pinckney 
(Charleston County); Johnsons Swamp (Georgetown County); and Ireland 
Creek (Colleton County). These projects are good candidates to be 
earmarked in the CAP budget as they represent a maximizing of Federal 
investments.
    Also within the construction appropriation account is the Aquatic 
Plant Control (APC) Program. In fiscal year 1996, funding was 
drastically reduced, and in fiscal year 1997, all appropriated funding 
was for research, and none for treatment. Aquatic Plant Control is a 
matter of serious concern to South Carolina. Productivity of our 
waterways and hydro-electric dams are essential to our economy. To 
date, millions of dollars of state revenues have been spent on 
treatment and eradication efforts, but Federal assistance is necessary 
to stem the tide of these destructive weeds. A worsening of the problem 
will only add future costs to Federal efforts in maintaining navigable 
waterways. An ounce of treatment now, may well be worth a pound of 
cure, later. South Carolina remains ready to shoulder its share of 
matching funds, and we seek your support in obtaining funding for field 
management operations in our waters.
                    operations and maintenance (o&m)
    The continued viability of the Corps of Engineers Operations and 
Maintenance (O&M) Program is clearly in the national interest. Designed 
to preserve the nation's existing infrastructure, the program provides 
for operation and maintenance of Federal projects such as navigation, 
flood control, multiple use power, national emergency preparedness, and 
recreation facilities at completed projects. The Corps of Engineers 
operates and maintains ten navigation projects in South Carolina. There 
is an anticipated shortfall within the operations and maintenance 
budget for fiscal year 1998.
    Due to Harbor related expansion, the Daniel Island dredge disposal 
area will be lost to Federal use in fiscal year 1999, leaving Clouter 
Creek Disposal area as the only accessible, available site for disposal 
of material unsuitable for ocean disposal. Providing additional funding 
will be necessary for diking operations at Clouter Creek in fiscal year 
1998 to enhance its capacity, or exponentially greater costs will be 
incurred post fiscal year 1998 to locate and open a less accessible 
site, or transport disposal material to the ocean. It's estimated 
$900,000 will be needed in fiscal year 1998 to carry out the task.
    Funding was also omitted in the President's budget for annual 
maintenance dredging in Town Creek, located in McClellanville, S.C. The 
local economy, not just the town of McClellanville, centers on seafood 
harvesting, and not performing this dredging will deny entrance to 
commercial fishing fleets, resulting in a serious, if not devastating, 
impact on the entire area's economic well being. I strongly urge you to 
restore funding of $360,000 for the dredging of Town Creek, and prevent 
what would amount to the collapse of this water resource dependent 
economy.
    In the area of energy, South Carolina is very proud of its 
proactive programs, which provide both a necessary service to our 
citizens and protection of the environment. As a state which produces 
no fossil fuels, we believe there is significant value in maintaining a 
variety of forms of renewable energy in our nation's overall fuel mix. 
Solar and biomass-based energy are examples of energy and fuel 
diversity sources we strongly support. As a state with a strong pulp 
and paper industry, we stand ready to work as partners with the 
Department of Energy on joint venture projects in the renewable energy 
area. Federal, State and private sector partnerships produce valuable 
advances in technology while boosting job creation opportunities.
    Another national asset located in the Palmetto State, is the U.S. 
Department of Energy's Savannah River Site (SRS), near Aiken, S.C. We 
support the continued investment DOE is making to the valuable SRS 
mission, and appreciate the Corps of Engineers' willingness to partner 
in SRS projects.
    Mr. Chairman, I appreciate your committee's willingness to 
entertain our citizen's concerns with regard to this legislation. We 
solicit your support in identifying funding for the economy dependent 
projects I've discussed; South Carolina is prepared to commit its share 
of resources to the endeavor.
    In closing, South Carolina occupies a unique position in our 
national interest. Key military installations, coastal geography, 
interstate trade routes, and international commerce are all dynamics at 
work within our borders. We remain a willing and responsible partner 
with the Federal Government, but as a small state, we depend upon co-
sponsorship for critical programs as they relate to energy and water.
    We look forward to continuing our partnership with the Federal 
Government as we strive to improve the quality of life for our 
collective constituents.
                                 ______
                                 
   Letter From Bernard S. Groseclose, Jr., President and CEO, South 
                     Carolina State Ports Authority
                      South Carolina State Ports Authority,
                                        Charleston, SC, March 1997.
Hon. Pete Domenici,
Chairman, Subcommittee on Energy and Water Development,
U.S. Senate, Washington, DC.
    Dear Senator Domenici: I am writing to you on behalf of the State 
of South Carolina and the South Carolina State Ports Authority. It has 
come to our attention some of the new channel construction projects 
authorized by Congress in the Water Resources Development Act of 1996 
are not designated for funding in the 1998 budget. This lack of funding 
causes us grave concern.
    WRDA96 authorized the deepening of Charleston Harbor to 45 feet. 
Charleston is the main port of our state, moreover, it is one of the 
main container ports of our nation, ranking only behind New York on the 
East and Gulf Coast of the United States. Over 650 businesses in South 
Carolina use the Port of Charleston regularly. In addition, Charleston 
serves 26 other states and a total of 5,000 major United States 
businesses. Our ports are a national asset both for economic 
development in times of peace and for defense supplies in times of war, 
most recently Desert Storm.
    Over one million container boxes move through Charleston harbor 
each year. They move on 1,650 vessels, many of which are twice the size 
of vessels which called only twenty years ago. Ships 965-feet long and 
drawing 41 to 42 feet of water are common today. In the next 2-3 years 
major steamship lines will receive from the shipbuilders 100 new 
container ships over 1,040-feet in length, carrying 5,000 to 6,000 
teus, (twenty-foot equivalent units of container boxes), and drawing 
from 41 to 46 feet of water. Bringing the situation home to Charleston 
is the fact that the Port's major steamship line customers already have 
on order 41 mega container ships. The need for deeper water is staring 
us in the face.
    In order to accomplish both regular maintenance dredging and the 
Charleston Harbor deepening project, the Corps of Engineers must be 
able to use its Clouter Creek disposal area. This area was recently 
made available to the Corps by the Navy when it closed its Charleston 
base. The Navy had not properly maintained the site for many years, and 
in order to use it, three cells totalling approximately 1,300 acres 
must have major dewatering and diking. Clouter Creek Disposal Area is 
the only disposal area available that could be utilized for disposal of 
material unsuitable for ocean disposal. Funds in the amount of $900,000 
are urgently required for this work.
    The global competitive edge our port system has brought to our 
state, and the 78,000 plus South Carolina jobs brought by the world 
business conducted through our port must not be lost. These 78,000 jobs 
create an economic impact of over $11 billion. Over $240 million in 
taxes accrue to state and federal coffers from Port impact every year. 
Customs receipts total over half a billion dollars a year at our Ports 
and harbor maintenance fees add another $30 million annually. The money 
spent on deepening Charleston harbor will be returned many fold.
    The funding for Charleston is a major part of the funding needed, 
however while Charleston is our state's largest port, South Carolina 
also benefits strongly from having a Port at Georgetown. The industries 
around Georgetown depend solely on that industrial port for the 
materials of their businesses. Frequently the lack of routine 
maintenance dredging causes re-routing of vessels to other ports out of 
state which costs South Carolina industries heavily in transportation 
fees. If Georgetown is fully funded for its maintenance plan it will be 
a significant boom to the well-being of those industries.
    Trade is the lifeline of our economy. Ship channels are the 
highways to the world which bring thousands of jobs as well as vessels 
to our ports. The ports of South Carolina handle half again as much 
export cargo as import cargo. The State Ports Authority has received 
the Presidents E Award for excellence in the promotion of exporting and 
the E Star Award for continued excellence. For the national good the 
State Ports Authority asks that you please do what you can to get the 
funding flowing for this singularly most important public program for 
South Carolina. I will be available to provide information and support 
whenever you wish.
            Sincerely,
                                Bernard S. Groseclose, Jr.,
                                                 President and CEO.
                                 ______
                                 
Prepared Statement of Robert V. Royall, Jr., Secretary, South Carolina 
                         Department of Commerce
    The South Carolina Department of Commerce is the state agency 
responsible for ensuring that South Carolina citizens are able to 
maintain the highest quality of life through the attraction of private 
investment and encouragement of commerce and trade. We have programs 
designed to encourage growth of existing industries, expand exports and 
encourage investment by new companies which will provide good jobs and 
income to South Carolina citizens.
    We have reviewed the U.S. Army Corps of Engineers budget proposal 
for the upcoming fiscal year and have identified several projects which 
we strongly support because of the potential to directly enhance our 
efforts to create jobs and increase wealth in South Carolina.
                         the port of charleston
    Charleston's Port and its continued viability is critical, not only 
to the Charleston region, but also to the Southeastern United States. 
Products manufactured in 25 states are shipped to their international 
destinations through the Port of Charleston. In fact, Charleston's Port 
moves 25 percent of Georgia's total exports and 30 percent of North 
Carolina's exports. The total value of exports alone was $10 billion in 
1996, making Charleston the 6th largest container port in the United 
States. Revenue to the federal government in the form of Harbor 
Maintenance Taxes was $30 million. Deepening and widening the harbor 
would dramatically improve the port's performance and increase its 
value to South Carolina and to the companies which it serves.
    Port accessibility is a critical factor in the location decisions 
of a number of major, private national and international companies. The 
state of South Carolina enacted the Rural Development Act in 1996 which 
provides extraordinary incentives to new job creation projects in the 
Charleston area in recognition of the needs created by the Naval Base 
closing. This investment by South Carolina combined with the investment 
in port enhancement through widening and deepening has the potential to 
produce dramatic returns in terms of jobs, capital investments and 
increased exports.
             the charleston harbor extension study project
    The extension of the navigable area of Charleston Harbor further 
upstream into the Cooper River would dramatically enhance it's 
desirability as an industrial location. Industry already located in the 
area would be more likely to expand and the market potential for 
previously identified sites would be enhanced. Enhancement of the 
area's economic development potential is critical because of the 
lingering effect of the Charleston Navy Base closing. The impact of the 
closing on the area was dramatic with 18,380 direct, and 20,000 
indirect jobs lost. Annual payroll loss was approximately $1.1 billion.
    Recent investments by some large corporations located along this 
stretch of the Cooper River include Nucor Steel. Their investment has 
helped somewhat to offset the loss of payroll and jobs and are an 
indicator of the potential of this area. Nucor's leadership tell us 
that their organization has the capability to double the size of their 
operation and add $150 to $200 million in new investment, and 100 new 
jobs if they can develop national and international markets for their 
steel. The water transportation enhancement will be a key factor in 
their decision process.
    Our experience shows that most of our investment comes from growth 
of existing companies. Attachment A shows the existing industries which 
would be directly impacted by enhanced water transportation 
accessibility. In addition, Attachment B shows the potential industrial 
sites which would be enhanced by the harbor extension.
    In this particular project to expand the port's navigable area up 
the Cooper River, a rather small public sector investment could 
leverage potentially remarkable private sector investments. This public 
sector venture would provide an excellent model of a public-private 
partnership with a substantial return on investment to the taxpayers.
                    new savannah bluff lock and dam
    This project is critical to the further growth of the Kimberly 
Clark facility in Aiken, South Carolina. Kimberly Clark now has 1,100 
employees and has potential for a great deal more. This project would 
have a substantial potential pay back for the taxpayers through jobs 
and capital investment.
      support to the department of energy and savannah river site
    The Savannah River Site is critical to the economy of the adjoining 
counties of Barnwell, Aiken, Allendale and to the entire region 
including counties in South Carolina and Georgia. Recent cutbacks have 
already negatively impacted the economy, and we support the continuance 
of the presence of the Corps of Engineers to administer construction 
contracts, undertake environmental remediation and maintain their 
employment levels at the site.
    South Carolina has been hit hard as a result of the Charleston and 
Myrtle Beach Base Closings as well as the continuing cutbacks at the 
Savannah River Site. We believe that the projects mentioned above are 
wise taxpayer investments and should be adopted by Congress to support 
South Carolina's economic development program and the development of 
export markets accessible from South Carolina manufacturers.
                                 ______
                                 
 Prepared Statement of James A. Timmerman, Jr., Ph.D., Director, South 
                Carolina Department of Natural Resources
    Thank you for the opportunity to offer this testimony.
    Noxious aquatic plants adversely impact the ecological balance and 
beneficial use of public waterways throughout South Carolina as well as 
the rest of the nation. The Corps of Engineers Aquatic Plant Control 
Program has served as a model of effective state/federal cooperation. 
Through an equal match of resources, this program has provided a 
financial bulwark to adequately defend against the spread of these 
foreign invaders and to minimize their impact. We are concerned about 
the drastic reductions in funding levels for the program over the past 
two years and in the large portion provided to research as opposed to 
control of these noxious species. Funding for the program was reduced 
from about $9 million in fiscal year 1995 to $4 million in fiscal year 
1996 to $2.5 million in fiscal year 1997. All funding for fiscal year 
1997 was allocated to research by the Corps. This loss of matching 
funds has severely reduced our ability to implement management 
operations. Consequently, we anticipate an increase in aquatic weed 
problems statewide. We ask that you consider increasing the funding for 
the Corps' Aquatic Plant Control Program to $6 million nationwide and 
earmarking a majority of the funds for cost-share with the states.
    The reconnaissance study on the Santee, Cooper, and Congaree Rivers 
has identified several possible projects that the Department of Natural 
Resources is presently negotiating with the Corps. The President's 
Budget identifies $300,000 for fiscal year 1998 and we support that, 
although it may prove to be insufficient. The study offers tremendous 
environmental restoration opportunities for the State of South 
Carolina. In particular, restoration of critical historical fishery 
spawning grounds in Lake Moultrie is a pressing need which lends itself 
to an opportune State-Corps cooperative project. Additionally, this 
study would address waterfowl habitat restoration in the Santee Delta, 
a focus area of the North American Waterfowl Management Plan. The study 
would also address water quality restoration and flood control in the 
Goose Creek Reservoir and basin. We stress the importance of these 
environmental restoration efforts and request your support of these 
studies/projects.
    There is, however, a serious point of contention represented here. 
One of the proposals being addressed as a part of this study is the 
migration of fish at the Pinopolis and Santee (USACE) dams. Assisting 
anadromous fish migration continues as a major issue in this country 
and that certainly holds true for us in the lowcountry of South 
Carolina. We would stress that the $1.06M recommended by the 
reconnaissance study to aid this migration is solely an obligation of 
the Corps as the facilities in question are Corps facilities and we 
request that this amount be appropriated to satisfy that obligation.
    Within the Savannah District, the Operations and Maintenance 
Program supports mitigation funding for the construction of Richard B. 
Russell Lake. These funds have previously been used for the purchase of 
land to replace that which was flooded. Sufficient funding of this 
program will insure the availability of the $185,000 obligation for the 
operation and maintenance of those mitigation lands. Further 
compensatory mitigation is required for the Corps' operation of the 
ordinary generating facilities at the lake. If the Corps decides to 
operate the pump-back portion of that facility, additional mitigation 
will be required, the amount dependent on the extent to which it is 
operated. This would approximate $1.5 million average mitigation per 
year, preferably under an appropriation of $25,000,000 to create an 
annuity for mitigation costs over the life of the project.
    The Port of Charleston continues as a valuable national asset in 
terms of international trade and state and national economic 
development. The estuary which serves as the port has been 
substantially modified in recent years due to the U.S. Army Corps of 
Engineers Rediversion Program and it will be further modified by the 
deepening of the harbor's channels. While a number of studies have been 
completed in the Charleston estuary, a number of questions remain. 
Appropriate management strategies for maintaining the estuary as a port 
and a biological asset can only be developed with an extended study of 
the harbor, to include previously agreed to monitoring outside the 
estuary in the Charleston Ocean Dredged Material Disposal Site.
    Recently the U.S. Environmental Protection Agency developed a 
series of recommendations through the Savannah River Basin Watershed 
Project. While this was a serious accomplishment, the needs of the 
Savannah Basin reach beyond these recommendations and should be 
addressed through a comprehensive study as authorized by Section 414 of 
the Water Resources Development Act of 1996 (Public Law 104-303). The 
results of such a study could be the mechanism by which the flows of 
the Savannah can best be optimized to meet the many and varied demands 
of often competing interests. The ``normal'' limit for reconnaissance 
studies of $100,000 and 6-12 months will not be sufficient due to the 
size of this basin and its inherent complications. An appropriation of 
$600,000 will be needed.
    While on the subject of the Savannah River, we support the funding 
for the needed rehabilitation of turbines at Lakes Hartwell and 
Thurmond. However, we are very concerned that none of the $18M in the 
President's Budget is designated for raising the dissolved oxygen in 
the release water from these projects to State water quality standards. 
Our support for the improvements to the generating facilities hinges 
therefore on the Corps' ability to address satisfactorily the dissolved 
oxygen issue. We request that your markup address this.
    The Charleston District is responsible for administering federal 
programs regulating certain activities in waterways and wetlands of 
South Carolina. These programs provide an important mechanism for 
protecting the natural resources of our state. Recognizing the 
importance of these programs, the Department of Natural Resources has 
established a comprehensive process by which we review and provide 
comment on all Corps permit applications that may impact the resources 
within our purview. We are concerned that in South Carolina the 
principle federal regulatory emphasis in being placed on our eight 
coastal counties. We believe that in large part this situation is due 
to inadequate funding for the regulatory programs and the lack of a 
sufficient presence in the non-coastal portion of South Carolina. We 
request that funding for the Charleston District's regulatory program 
be adequately increased to allow the establishment of a branch 
regulatory office in Columbia in order to better serve our 38 county 
non-coastal area, while maintaining the effective administration along 
our coast.
    The Yadkin-Pee Dee River Basin is the largest watershed draining to 
the Southeast of the United States. A Reconnaissance Study has been 
started this year under the new, accelerated guidelines. Funding will 
be required in fiscal year 1998 for the feasibility studies that 
address flooding and navigation restrictions on the Pee Dee and 
associated tributaries which are clogged with downed trees. Slow 
drainage and stagnant water pools within the drainage basin cause 
periodic fish kills and restrict forest regeneration. The fiscal year 
1998 study will investigate the feasibility of correcting flooding 
problems, identify water supply sources, and environmental restoration 
solutions.
    Environmental restoration projects, as a part of the Continuity 
Authorities Program, have been threatened by Congressional action to 
identify and fund specific projects. These funds have historically been 
made available to the districts in such as way as to allow maximum 
flexibility for the local districts and their cost sharing partners. 
This practice has resulted in timely and efficient cooperation and 
should be continued with as little earmarking as possible.
    The Reconnaissance Study of the AIWW in South Carolina is underway. 
While we support funding for those feasibility studies that will 
result, particularly with regard to the concept of compatible uses of 
dredge disposal areas for wildlife management and environmental 
restoration, realignment and enlargement questions are just that to us, 
questions. Our reservations regarding realignment and enlargement will 
be addressed more specifically after they are accurately known. We 
appreciate and support the $500,000 set out in the President's Budget 
for this item.
    In closing, I would like to commend the Charleston District for its 
proactive work with the South Carolina Department of Natural Resources 
to ensure that their civil works projects are properly monitored and 
mitigated. Other programs also benefit from the close physical 
proximity of our offices and good working relationships which lead to 
fruitful communications and cooperation.
                                 ______
                                 
 Prepared Statement of Douglas E. Bryant, Commissioner, South Carolina 
             Department of Health and Environmental Control
    Thank you for the opportunity to provide this information to the 
Senate Subcommittee on Energy and Water Development regarding fiscal 
year 1998 U.S. Army Corps of Engineers projects in the State of South 
Carolina.
    Ninety-five percent of all United States international trade moves 
by ship. South Carolina's Charleston container port is third in 
containers handled on the east and gulf coast and sixth nationally. The 
Charleston Port is a shipping hub for businesses located in 26 states. 
A significant link in our shipping hub is the Atlantic Intra-Coastal 
Waterway. The AIWW is fundamental to the safe and reliable movement of 
intra-state bulk goods and material along the Atlantic Seaboard, as 
well as use for recreational and other purposes. The U.S. Army Corps of 
Engineers maintains the waterway as a priority federal interest. The 
State of South Carolina is a partner in this effort by providing for 
dredged material disposal along the waterway. This arrangement has been 
in place for almost 60 years. During this time the Corps and the State 
have reacted to problems as they arose--problems associated with 
maintenance dredging, erosion, navigational safety, encroachments, and 
disposal easements. These problems continue to grow as additional 
pressures are placed upon the AIWW from increased use of the waterway 
and especially from rapid changes in adjacent land use. Our options for 
improvements to the AIWW are diminishing with time. At no time have we 
been able to stand back and address the AIWW in a comprehensive manner. 
The Corps has received $100,000 to initiate and complete an expedited 
reconnaissance study. The Corps has identified interrelated disposal 
and environmental issues related to operation and maintenance of the 
AIWW. The Corps is requesting funding for fiscal year 1998 to initiate 
a phased comprehensive feasibility analysis. This project is sorely 
needed and long overdue. We whole-heartedly support this effort.
    In three hours during the night of September 21, 1989, the State of 
South Carolina suffered over $5 billion dollars in damage from 
Hurricane Hugo. A lesson we learned is that advance storm damage 
reduction efforts pay off. We strongly support the Yadkin-Pee Dee River 
Watershed project with the incorporation of a Pawleys Island, South 
Carolina, storm damage reduction element. The last reconnaissance 
report for Pawleys Island was completed in June, 1989, just three 
months before the Island was hit by the worst hurricane in 35 years. As 
a result of the hurricane, a 50 foot breach isolated 25 homes on the 
southern spit, in addition to causing massive erosional damage 
elsewhere on the Island. The Corps and the State expended over $550,000 
in emergency beach restoration (220,000 cubic yards of sand) for 
Pawleys Island, not including a portion of the $1.2 million in dune 
revegetation that took place from North Myrtle Beach to Folly Beach. 
The 1989 reconnaissance report must be updated to protect that 
investment and determine the current status of storm protection. The 
estimated cost for the feasibility study is $300,000. The State and 
residents of Pawleys Island wholeheartedly support this Yadkin-Pee Dee 
River Watershed effort.
    The Charleston Harbor Estuary represents a myriad of competing uses 
and values--international and intrastate shipping, military and 
commercial users, recreational boating, fishing, tourism, historical 
and archaeological values, flora and fauna habitat, and biological 
processes for the marine environment at all levels. A major 
modification to the physical characteristic of the harbor by increasing 
shipping channel depths can affect all uses. An investigation to map 
the distribution and bioeffects of sediment contaminants within and 
near maintained channels of the estuary would be extremely useful in 
developing appropriate management strategies for maintaining the harbor 
as a port and protecting biological resources. The cost for the general 
investigation is $400,000.
    The State of South Carolina appreciates your consideration of these 
requests. For additional information, please contact me or Mr. Chris 
Brooks at our Office of Ocean and Coastal Resource Management in 
Charleston, SC, (803) 744-5838.
                                 ______
                                 
  Prepared Statement of Mitch Perkins, Director, South Carolina State 
                        Budget and Control Board
    We urge the Energy and Water Subcommittee to retain sight of the 
value of a variety of forms of renewable energy in our nation's overall 
fuel mix. Solar energy and biomass-based energy resources are two 
important hopes for states such as South Carolina which produce no 
fossil fuels.
    In the past, the solar energy accounts in the budget have been cut. 
These cuts may be short-sighted. America's energy security is dependent 
on fuel diversity. In South Carolina we believe that renewable energy 
resources will be a significant source of high-technology job 
opportunities, economic development and environmental enhancement. We 
stand ready to work with industry and the Department of Energy on joint 
venture projects in the renewable energy area. Increased focus should 
be applied to deployment programs to support these technologies.
    Specifically, we support the Department of Energy's funding 
requests for the following programs: the Solar Building Technology 
Research Program ($4 million), the Photovoltaic Energy Systems Program 
($77 million), the Solar Thermal Energy Systems Program ($19.8 
million), the Biofuels Energy Systems Program ($76.54 million), the 
Renewable Energy Production Incentive Program ($4 million), the 
International Solar Energy Program ($7 million), the Solar Technology 
Transfer Program ($1.36 million), and the National Renewable Energy 
Laboratory ($2.8 million). We also strongly support the request of 
$45.5 million for Electric Energy Systems and Storage.
    We have a strong pulp and paper industry in South Carolina, and we 
believe that federal-state-private partnerships should be promoted to 
ensure that renewable fuels inherent in the pulping process are 
optimized, resulting in job maximization and dollar outflow 
minimization.
    Thank you for your consideration.
    District: Charleston
    Appropriation: Construction General (Aquatic Plant Control)
    Program: Aquatic plant control
    Amount requested: $1,000,000
    Sponsor: Cost-shared with the State of South Carolina.
    Program description: This program provides for the control of water 
hyacinth, alligatorweed, hydrilla, and other noxious aquatic plant 
growths from navigable waters, tributaries, streams, connection 
channels, and other allied waters of the United States. This program is 
cost-shared at the rate of 50 percent Federal and 50 percent non-
Federal. This program was identified for termination after fiscal year 
1995; however, reduced funding was provided to the Corps of Engineers 
in fiscal year 1996, most of which was designated for research purposes 
as opposed to treatment purposes. Termination of this program will 
result in a rapid expansion of aquatic plants and the resultant 
restriction on the use of affected water areas within South Carolina. 
Although the State is increasing the level of their aquatic plant 
control spending each year in an attempt to gain control of the aquatic 
plant problem, the reduction or elimination of Federal participation 
will severely impact the State's capability to maintain navigable 
waters. This program must be funded at the requested level to continue 
with the essential treatment of state waters.
    District: Charleston
    Appropriation: General Investigations (Review of Authorized 
Projects)
    Study: Atlantic Intracoastal Waterway (AIWW)
    Amount requested: $500,000
    Sponsor: No State funding required.
    Study description: The Atlantic Intracoastal Waterway (AIWW) is a 
naturally protected navigation route which generally parallels the 
Atlantic coast between Norfolk, Virginia, and the St. John's River in 
Florida. In South Carolina, the channel is 12 feet deep and not less 
than 90 feet wide and was constructed in the early 1940's. This study 
is a multipurpose initiative. We will investigate existing and future 
commercial shallow draft navigation needs, address ways to reduce 
operations and maintenance costs and improve safety and navigational 
efficiency. It will address possible realignment/enlargement of the 
waterway at specific locations as a result of planned bridges and ease 
difficult bends and blind areas for safer operation by the users. Other 
areas of interest to be investigated include environmental restoration, 
identification of surplus easements for possible release back to local 
sponsors, erosion control/bank stabilization, and easement encroachment 
problems.
    District: Charleston
    Appropriation: General Investigations (Watershed/Ecosystem 
Reconnaissance Study)
    Study: Charleston estuary
    Amount requested: $100,000
    Sponsor: The SCDHEC, Ocean and Coastal Resource Management is the 
potential sponsor.
    Study description: The estuary covers portions of Charleston, 
Berkeley and Dorchester Counties and includes over 50,000 acres of 
coastal marshes and associated flora and fauna. The major water bodies 
in the estuary are the tidal reaches of the Ashley, Cooper, Stono and 
Wando Rivers and the lower portions of Charleston Harbor. This 
comprehensive study will identify problems from current land uses and 
associated runoff, characterize important species and habitants, 
identify historic recent losses of important habitats and populations 
of important species, develop water resource management plans and 
ecosystem restoration. Our goal is to integrate Federal, state and 
local efforts to pursue multiple objectives, including environmental 
restoration while providing for reasonable economic development of the 
area.
    District: Charleston
    Appropriation: (Surveys)
    Study: Charleston Harbor extension
    Amount requested: Not funded. Requires study resolution.
    Sponsor: Department of Commerce is the potential sponsor.
    Study description: This study will evaluate the feasibility of 
extending the navigation channel in Charleston Harbor to provide for 
deep-draft navigation to industrial facilities located above the upper 
limits of the federally-maintained channel on the Cooper River. This 
study will help qualify/quantify the navigational constraints of the 
existing channel and determine if a federal interest exists in 
extending the length, easing the bends, and widening the channel.
    District: Charleston
    Appropriation: Construction General (Navigation)
    Project: Charleston Harbor (deepening/widening), SC
    Amount requested: $1,500,000
    Sponsor: SC State Ports Authority.
    Study description: Charleston Harbor is located on the coast of SC 
about 15 miles south of the midpoint of the coastline, 165 miles south 
of Wilmington Harbor, NC and 105 miles north of Savannah Harbor, GA. 
The SPA expressed a need for deepening the Charleston Harbor and 
construction of a turning basin for the proposed Daniel Island 
Terminal. The plan of improvement is to deepen the Entrance Channel 
from 42 feet deep to 47 feet deep and the inner channels from 40 feet 
deep to 45 feet realign/widen various channels/reaches, construct a new 
turning basin opposite the future Daniel Island terminal, construct a 
new contraction dike, reconstruct two existing dikes, and remove the 
third existing dike. The total cost of the project in October 1995 
dollars is estimated at $116.6M ($72.8M Fed/$43.8M Non-Fed) with a 
benefit/cost ratio of 1.69 to 1.
    District: Charleston
    Appropriation: Construction General
    Program: Continuing authorities program
    Requested funding:
    Description: The Secretary of the Army, acting through the Chief of 
Engineers, is authorized to plan, design and construct certain types of 
water resources and environmental improvements without specific 
Congressional Authorization. This program is cost shared between the 
Federal Government and the non-federal sponsor. Cost shared amounts 
differ depending on the type of project being undertaken. These 
authorities are called the Continuing Authorities Program. They consist 
of:
    Section 14, Flood Control Act of 1946 (Public Law 79-526), as 
amended: For emergency streambank and shoreline erosion protection for 
public facilities and services.
    Section 103, River and Harbor Act of 1962 (Public Law 87-874), as 
amended: For hurricane and storm damage reduction.
    Section 107, River and Harbor Act of 1960 (Public Law 86-645), as 
amended: For navigation.
    Section 111, River and Harbor Act of 1968 (Public Law 90-483), as 
amended: For mitigation of shoreline erosion damage caused by 
navigation projects.
    Section 205, River and Harbor Act of 1948 (Public Law 80-858), as 
amended: For flood control.
    Section 208, Flood Control Act of 1954 (Public Law 83-780), as 
amended: For snagging and clearing for flood control.
    Section 1135, Project Modification for Improvement of the 
Environment (Public Law 99-662) as amended: For Environmental 
Restoration.
    District: Charleston
    Local governments in South Carolina support this program and have 
continued to request assistance from the Corps of Engineers. There are 
currently five study requests waiting for funds:
  --Cow Castle Creek, Orangeburg County--Section 205
  --Johnson's Swamp/Andrews, Georgetown County--Section 205
  --Castle Pinckney, Charleston County--Section 103
  --Goose Creek, Berkeley County, Section 205
  --Ireland Creek, Colleton County--Section 205
    During fiscal year 1996, the Charleston District completed 
construction on the Section 103 Battery Pringle Project. The Section 14 
Indian Bluff Project was completed in fiscal year 1997. In addition, 
construction is on going for Murphy Island (Section 1135) and SCDOT 
Bridges (Section 14).
    District: Charleston
    Appropriation: Construction General (Navigation Projects)
    Project: Cooper River, Charleston Harbor
    Amount requested: $2,738,000
    Sponsor: None required.
    Project description: The project called for construction of a 
diversion canal and powerhouse to direct flows from the Cooper River 
back to the Santee River, thereby reducing shoaling in Charleston 
Harbor. The project was initiated in March 1977; the power-on-line date 
was March 1985. Cost-to-date of constructing this project is 
approximately $203,000,000.
    District: Charleston
    Appropriation: General Investigations (Storm Damage Reduction)
    Project: Myrtle Beach storm damage reduction project
    Amount requested: $10,000,000
    Sponsors: This project has three sponsors--City of North Myrtle 
Beach, City of Myrtle Beach, and Horry County. Additional financial 
sponsors include the State of South Carolina, Georgetown County and the 
City of Surfside Beach. The State of South Carolina is providing 50 
percent of the local sponsors matching funds for all three reaches.
    Project description: The Myrtle Beach project is located along the 
northern coast of South Carolina and extends from Little River Inlet at 
the North Carolina border, in a southerly direction, to Murrells Inlet 
for a total distance of approximately 37 miles. It includes the entire 
coast of Horry County and a portion of the coastal area of Georgetown 
County. The project consists of placement of 5.1 million cubic yards of 
sand for initial construction on 25.4 miles of protective beach, 
encompassing three separable reaches. Material will come from offshore 
borrow sites. Periodic nourishment is authorized for a 50-year period 
and will be required about every eight to 10 years. The value of 
protected property for the 37 mile project reach is estimated to be in 
excess of $1.4 billion.
    District: Charleston
    Appropriation: Operations and Maintenance
    Program: Operations and Maintenance Program
    Amount requested: Fund the District's Request
    Sponsor: None.
    Program description: The purpose of this program is to preserve the 
Nation's existing infrastructure. It provides for the operation and 
maintenance of Federal projects in the following categories: 
Navigation; Flood Control; Multiple Purpose Power; Protection of 
Navigation; National Emergency Preparedness Program; and Recreation 
Facilities at Completed Projects.
    Within South Carolina, the Corps of Engineers annually operates and 
maintains ten navigation projects as listed: Atlantic Intracoastal 
Waterway; Shipyard River; Charleston Harbor; Town Creek; Georgetown 
Harbor; Little River Inlet; Port Royal Harbor; Murreils Inlet; Folly 
River-Cooper River, Charleston Harbor.
    Work performed on these projects consists of maintenance dredging 
and diking, condition surveys, monitoring efforts, and operating and 
maintaining the powerhouse at our Cooper River, Charleston Harbor 
project. In addition, our National Emergency Preparedness Program 
ensures that the Corps of Engineers can provide support for the Nation 
during national security threatening events.
    Our annual expenditures over the past five years have averaged 
approximately $16.0M.
    District: Charleston
    Appropriation: Operations and Maintenance
    Project: Charleston Harbor, SC
    Amount requested: $4,715,000. This amount is $900,000 above the 
amount contained in the President's Budget Request. The additional 
funds are required to perform management activities/diking on Clouter 
Island. Daniel Island will not be available to the Corps for use after 
fiscal year 1998. Clouter Island is the only upland site with easy 
access available for use. Without funding in fiscal year 1998, the site 
will not be ready for use as a disposal site in fiscal year 1999.
    Sponsor: None required.
    Project description: The district maintains 33.5 miles of channel, 
three turning basins and one anchorage basin.
    District: Charleston
                               fact sheet
        charleston harbor--clouter creek disposal area concerns
    Background.--The Clouter Creek Disposal Area has been used for a 
number of years as a dredged material disposal area. Aerial photographs 
indicate that it was used to a limited extent prior to World War II; 
however, it was not until the late 1950's and early 1960's that it 
received significant use as Charleston Harbor began to experience the 
full effect of diversion of Santee River flow down the Cooper River.
    In 1958, the Corps obtained a perpetual easement for disposal from 
the South Carolina State Ports Authority for the northern 618 acres. 
The Navy owned the remainder of the disposal area, approximately 1,397 
acres. Through a joint use agreement, the Corps has used the Navy's 
portion.
    The Clouter Creek Disposal Area represents a substantial percentage 
of the inner harbor disposal area volume and is extremely important to 
the long-term viability of Charleston Harbor. Due to the problems 
involved in developing new disposal areas, it is important that the 
Clouter Creek Disposal Area continue to be available for its current 
purpose and used to its maximum efficiency. Storage capacity in the 
range of 100 million cubic yards could be developed which could serve 
the harbor well into the twenty-first century.
    Status.--The Senate added $1,200,000 to our fiscal year 1996 
Operations and Maintenance budget to accomplish ditching, clearing, and 
site preparation for diking of the south and middle cells. That work 
commenced in late fiscal year 1996. Work has been completed in the 
south cell and this cell is ready for diking in fiscal year 1998. 
Ditching, clearing and site preparation for diking will be completed in 
the middle cell by the summer of 1997.
    District: Charleston
    Appropriation: Operations and Maintenance
    Project: Town Creek
    Amount requested: $360,000
    Sponsor: None required.
    Project description: The project provides a channel ten feet deep 
by 80 feet wide from the AIWW to the mouth of Five Fathom Creek, a 
distance of 62 miles. The project includes an entrance channel twelve 
feet deep by 100 feet wide across the ocean bar, a distance of 4.0 
miles. Without funding to dredge the inside shoals, the Town Creek 
project will not be accessible for seafood harvesters. Lack of funding 
for dredging will have a devastating economic effect on the livelihood 
of the Town of McClellanville.
    District: Charleston
    Appropriation: General Investigations (Comprehensive Studies)
    Study: Santee, Cooper, and Congaree rivers
    Amount requested: $300,000
    Sponsor: The SC Department of Natural Resources is the potential 
sponsor.
    Study description: The study area includes portions of western NC 
and extends to the SC coast, flowing through portions of 16 counties in 
SC. The total drainage area of the basin is over 16,000 square miles, 
of which the portion within SC encompass 33 percent of the State's 
total land area and includes over 60 percent of the State's population. 
This basin-wide ecosystem study will consider water resource needs 
including municipal and industrial water supply, water quality, 
hydropower, recreation, and environmental enhancement/restoration. The 
State has expressed a keen interest in this study because it offers an 
opportunity for comprehensive ecosystem planning and improvement.
    District: Charleston
    Appropriation: General Investigations (Watershed/Ecosystem 
Reconnaissance Study)
    Study: Yadkin-Pee Dee River watershed
    Amount requested: $300,000
    Sponsor: The South Carolina Department of Natural Resources is the 
potential sponsor.
    Study description: The Pee Dee River Basin, the second largest 
basin on the Atlantic Coast, extends northwest from the coast at 
Georgetown, across the North Carolina state line into western North 
Carolina, with a small portion into Virginia. The basin drainage area 
is about 18,000 square miles, of which 7,600 square miles are in South 
Carolina, 10,250 square miles in North Carolina, and about 150 square 
miles in Virginia. The major tributaries to the Pee Dee River are the 
Rocky, Lynches, Little Pee Dee, Lumber, and Black Rivers. The Pee Dee 
and many of these tributaries are clogged with downed trees which 
restrict water flow as well as navigation. Residents in these areas are 
concerned about the effects and problems downed trees have on increased 
flooding, safety, and health. Fallen trees and shoaled inlets create 
slow drainage and stagnant water pools throughout the drainage basin. 
Forest regeneration is hindered and periodic fish kills occur due to 
the degraded water quality in these stagnant areas. Communities 
throughout the basin are concerned about the decreasing sources of 
water supply and are seeking means to identify new sources. This study 
is a multipurpose study. We will identify the extent and magnitude of 
flooding and environmental problems, investigate the need for and 
feasibility of existing and future navigation projects, and identify 
new water supply sources.
                                 ______
                                 

               SOUTHWESTERN U.S. WATER RESOURCE PROJECTS

     Prepared Statement of George Miller, Mayor, City of Tucson, AZ
    The people of Tucson greatly appreciate the funding support your 
Committee has given over the years to the Central Arizona Project. A 
crucial element of Tucson's planning for reliance on CAP water has been 
the provision of delivery reliability for Southern Arizona through the 
construction of a storage reservoir and related facilities as part of 
the Project. This feature of the Project is commonly known as Terminal 
Storage. In the past three years, quality problems with CAP water have 
caused the City to suspend direct delivery of the water to customers. 
However, the City is taking steps to resolve those problems and will 
need to resume direct deliveries in the near future.
    I am writing to urge that the Bureau's ongoing environmental, 
design and planning work for Terminal Storage be continued--so that the 
City can be assured of CAP delivery reliability when the City shifts 
its water supply from groundwater to CAP water. The Bureau has 
requested that $490,000 be appropriated for the Bureau's ongoing 
environmental and planning work for Terminal Storage. We support that 
request and urge that the requested funds be included in the fiscal 
year 1998 appropriation so that our City can be assured of CAP delivery 
reliability as the City works to shift its water supply from 
groundwater to CAP water.
    In addition, there is strong regional interest in the most 
effective and efficient reuse of effluent. On March 17, 1997 a workshop 
to discuss initiation of a joint regional effluent study was convened 
in Tucson by the Bureau of Reclamation. The workshop was attended by 
the City, Pima County, the Towns of Oro Valley, Marana and Sahuarita, 
Green Valley, the Metropolitan Domestic Water Improvement District, the 
Tucson Regional Water Council, the San Xavier District of the Tohono 
O'odham Nation, the Arizona Departments of Water Resources and 
Environmental Quality and the Bureau. There appeared to be a strong 
consensus that a regional joint effluent reuse study should be 
initiated in partnership with the Bureau. The participants agreed to 
request an appropriation to provide the federal matching funds for 
commencing the study. We believe the study would be a constructive step 
in joint regional water planning for the Tucson area.
    The City requests that $250,000 be appropriated to fund a water 
reclamation study for the Tucson area. Section 1609 of the Reclamation 
Wastewater and Groundwater Study and Facilities Act authorizes the 
Secretary of the Interior, in cooperation with the State of Arizona and 
appropriate local and regional entities, to conduct a feasibility study 
of a comprehensive water reclamation and reuse system for Southern 
Arizona. A similar study for the Phoenix area was authorized in Sec. 
1608 of the Act and is currently being conducted. The study for Tucson 
has not been funded. The Secretary is entitled to 28,200 acre feet of 
effluent as part of the Southern Arizona Water Rights Settlement Act; 
the City is entitled to 90 percent of the remaining effluent. A 
regional study under Sec. 1609 of the Act would assist the Secretary, 
the City and other regional water entities in their long-range water 
planning efforts.
                      background re cap in tucson
    Until the arrival of Colorado River water through the CAP aqueduct 
in late 1992, Tucson was one of the largest metropolitan areas in the 
United States wholly dependent upon groundwater. Since the early 
1900's, Tucson has been forced to mine groundwater--withdraw more 
groundwater than is naturally replenished to the basin--to provide 
water to its growing population. Recognizing the finite nature of the 
groundwater resource, Tucson committed in the 1970's to a conservation 
ethic. Over the years this has resulted in significant reductions in 
per capita groundwater use. Nonetheless, current demands for water in 
this basin exceed renewable supplies by a ratio of nearly two to one.
    Since the 1970's, Tucson has been a major supporter of the Central 
Arizona Project to import Colorado River water to the metropolitan 
areas of the state. Tucson recognizes that CAP water will be the most 
viable long-term water source to sustain Tucson's economic and 
population growth, meet the Arizona groundwater code requirements, and 
conserve and preserve the City's groundwater resource for the future.
    In 1989, after a lengthy process of study and public input, Tucson 
adopted a long range Water Resources Plan. As part of that Plan, Tucson 
made a policy decision of rapid transition from mined groundwater to 
surface water, much earlier than required by Arizona's Groundwater 
Management Code. For the past thirteen years, Tucson has been shifting 
its economic resources from drilling new wells and maintaining the well 
fields, to reorienting the water delivery system, and to the 
construction of a large treatment plant capable of delivering 
sufficient treated CAP water to substitute renewable water for nearly 
all of the groundwater the City was delivering. Tucson invested over 
$160 million in the facilities required for reliance on CAP water.
    Unfortunately, when Central Arizona Project water arrived in the 
Tucson area, the interaction between treated surface water and old 
galvanized steel pipes in some portions of the city resulted in the 
delivery of discolored water to seven percent of our customers who 
received the water. Although major efforts were undertaken to correct 
the problem, progress was slow. In November 1995, the city's voters 
passed an initiative measure, Proposition 200, which bars Tucson Water 
from making direct delivery of CAP water unless it receives enhanced 
treatment to substantially reduce the total dissolved solids in the 
water.
    Consequently, Tucson is planning to recharge a significant portion 
of its CAP water, and continue to pump groundwater until the problems 
associated with direct delivery have been resolved. Because the direct 
delivery of CAP water has been delayed, questions have been raised 
concerning the need for Terminal Storage. A purpose of my testimony 
today is to assure you that Tucson plans to solve the water quality 
problems and to resume direct delivery of CAP water. Tucson needs 
Terminal Storage.
    Growth projections put the Tucson area's population at 1.2 million 
by 2025, and at 2.5 million 100 years from now. Tucson Water delivered 
more than 108,000 acre-feet of water in 1995. This area is projected to 
need more than 200,000 acre-feet in 2025, and over 400,000 acre-feet in 
the year 2100. Tucson has a potential service area which includes most 
of eastern Pima County, north of the San Xavier Indian Reservation. The 
City's allocation of CAP water is 148,420 acre feet, with an additional 
25,000 acre feet allocated to private water companies and state land in 
the area. Tucson's long range plan indicates that this area's current 
CAP allocations will be totally utilized by the year 2025. The plan 
calls for the City to acquire additional CAP water.
    Tucson is, and must remain, committed to the Central Arizona 
Project to support the City's future growth. I assure this Committee 
that Tucson's long-term commitment to the CAP remains intact, despite 
water quality problems experienced by the City when it directly 
delivered CAP water to its customers. After describing these problems, 
I will address our support for the proposed appropriations for the 
Tucson Reliability Division of the CAP for fiscal year 1998.
            technical cap implementation problems in tucson
    Conversion of Tucson Water's service area population of nearly 
600,000 people from groundwater to surface water has been a significant 
challenge for the City. In order to comply with anticipated new 
stringent EPA requirements, Tucson constructed a state-of-the-art water 
treatment plant. We operated a pilot plant in Phoenix to identify and 
deal with the problems that could be encountered when CAP water was 
introduced in Tucson. A major public relations campaign was implemented 
to prepare our customers for the changes they might encounter when CAP 
water arrived. When the first 84,000 customers were transferred from 
groundwater to CAP water early this year, 7 percent of those customers 
experienced problems on a scale that had not been anticipated. The 
surface water caused encrusted materials in old galvanized steel pipe 
to break loose and resulted in the delivery of discolored water to 
approximately 6,000 customers. The City established a special office to 
deal with customer complaints and employed nationally recognized 
experts to help solve the problem. However, a quick solution could not 
be achieved.
    During 1994, the City continued to deliver treated CAP water to a 
limited number of customers in areas with newer pipelines. After the 
CAP aqueduct was closed down in November and December for siphon repair 
however, the Mayor and Council decided that deliveries of treated CAP 
water would not be resumed to any customers until the water quality was 
sufficiently high for delivery to all Tucson Water customers.
    To assure that direct delivery of CAP water would not resume until 
the quality of the water improved, the voters of the city enacted an 
initiative known as Proposition 200 last November. It provides that CAP 
water cannot be directly delivered to Tucson Water customers unless the 
quality is equivalent to high quality groundwater in Avra Valley west 
of Tucson. Enhanced treatment will be needed if CAP water quality is to 
be improved to Avra Valley standards.
    Last year the City contracted with the Bureau of Reclamation to 
conduct pilot plant tests of enhanced treatment techniques and estimate 
costs. When that study is complete, we plan to poll our water customers 
to determine the acceptability of enhanced treatment.
    Meanwhile the City is developing ways to continue to purchase CAP 
water and store it for future use. The Mayor and Council have been 
clear and united in continuing their commitment to taking substantial 
quantities of CAP water each year. However, the City must deal with the 
quality issues which have arisen because of the flow of CAP water 
through the City's older pipe system. Economic consequences will 
include pipeline repair and accelerated replacement, costs for 
homeowner damages, and, as described above, the possible construction 
of a new demineralization plant.
    We will preserve our basic conservation ethic, and our long-term 
need for CAP water to meet the needs of Tucson's growing population 
will continue. The CAP Use Study for Quality Water by Dames & Moore, 
completed last Fall, reported on alternatives for utilization of the 
City's CAP allocation. Its long-term recommendation included direct 
delivery of substantial quantities of treated CAP water. Terminal 
Storage is critically necessary for such direct delivery.
    The City is accelerating its main replacement program so that by 
the end of this year nearly half of the 200 miles of old galvanized 
water pipes will have been replaced. Earlier this month, the City 
announced a major new program to determine the level of water quality 
acceptable to our water customers and the methods for assuring that 
this level is maintained.
                            terminal storage
    The problems Tucson has had switching from groundwater to CAP water 
highlight the need for a storage facility near the terminus of the 
aqueduct--Terminal Storage, as the final element of the Central Arizona 
Project in Southern Arizona. A reliable supply of CAP water is very 
important to Tucson. It is also quite important to the Tohono O'odham 
Nation. The Nation has a contract for 37,800 acre feet of CAP water, 
and is to receive an additional 28,200 acre feet of water under the 
terms of the Southern Arizona Water Rights Settlement Act of 1982. This 
may also be CAP water. The Nation has urged that Terminal Storage be 
provided as part of the Central Arizona Project so that a reliable 
supply of water will be provided to the Nation and its people.
    The Bureau has been doing detailed planning and continuing the NEPA 
processes on a terminal storage proposal that has been approved by the 
City and the CAWCD board. The principal elements of the proposal are as 
follows:
  --A 15,000 acre foot surface storage reservoir with 350 cfs gravity 
        flow to the Tucson Water Treatment plant;
  --Joint CAP recharge facilities with the CAWCD;
  --Recovery of recharged water from:
      a. Two of Tucson Water's existing exterior wellfields, Avra 
        Valley and Santa Cruz, with the flexibility to introduce flows 
        either at the treatment plant or into the surface reservoir; 
        and
        b. A new Central Avra Valley wellfield, located on City-owned 
        property with the pumped supply introduced directly into the 
        CAP canal on the discharge side of the Brawley Pumping Plant.
  --Operation of the Tucson wellfields to be turned over to the CAWCD, 
        under a cooperative agreement, during any CAP outages.
    The estimated cost of the federal portion of this project is $88 
million for the storage facility; the cost of the local portion is 
approximately $50 million for existing and new wellfields and 
pipelines. The draft Environmental Impact Statement for Terminal 
Storage was completed in April 1995. The final EIS is being worked on 
and is scheduled to be completed later this year.
    We have urged the Bureau to continue the environmental work and 
planning for Terminal Storage and the Bureau plans to do so, albeit at 
a reduced level. Its appropriation request seeks $.49 million for work 
in fiscal year 1998 related to Terminal Storage. The City respectfully 
asks that this request be approved so that Terminal Storage can remain 
alive while Tucson resolves its CAP problems and develops its programs 
to return to direct delivery of CAP water.
                                 ______
                                 
      Prepared Statement of Gov. Fife Symington, State of Arizona
    Mr. Chairman: This testimony submitted on behalf of the State of 
Arizona asks for continued support of funding for the various water 
related projects and programs which affect the State. Construction 
projects underway by the Bureau of Reclamation include: the Central 
Arizona Project, safety of dams work, and the Colorado River Basin 
Salinity Control Program, Colorado River Front Work/Levee System, and 
the Colorado River Water Quality Improvement Program. Construction 
projects by the Corps of Engineers include the Clifton, Holbrook, 
Nogales Wash, and Rillito River Drainage Flood Control Projects. 
Additionally, this testimony addresses the various planning, 
environmental and endangered species, and operation and maintenance 
programs by both the Bureau of Reclamation and Corps of Engineers.
    This testimony supports appropriation levels that adequately fund 
the projects and programs within Arizona under consideration by this 
Subcommittee. Based upon a review of the fiscal year 1998 proposed 
budget released by the President, the State of Arizona has the 
following specific funding recommendations.
                        central arizona project
    The Central Arizona Project (CAP) continues to be the highest 
priority water supply project in Arizona. The importance of this 
project for the future of the State of Arizona cannot be overstated. 
The reliable delivery of Colorado River water to users in central and 
southern Arizona is essential to meet the demands of an ever increasing 
population.
    There has been some very significant activity related to the CAP 
since I submitted testimony to this Subcommittee last year. I am 
pleased to report that last year the Legislature passed and I signed 
into law an ambitious program to maximize the use of the State's 
Colorado River supply deliverable via the CAP--the Arizona Water 
Banking Authority. This innovative program enables Arizona to meet many 
of its long-term water policy challenges by providing the opportunity 
to do the following: firm-up the water supplies of communities along 
the Colorado River and those dependent on water delivered via the CAP, 
enhance Arizona's ability to meet its water management goals, and 
assist with the settlement of Indian tribe claims to water rights in 
Arizona.
    The Water Bank plans to bank more than 323,600 acre-feet of water 
in 1997, raising Arizona's Colorado River use to about 2.74 million 
acre-feet of its 2.8 million acre-foot entitlement. Beginning in 1998, 
the Water Bank's activities will enable the State to use its full 
Colorado River allotment.
    The program also provides a mechanism that can be used to 
facilitate short-term interstate water transfers with California and 
Nevada. This element may assist these states to meet their interim 
water needs while enhancing groundwater storage within Arizona. The 
Secretary of the Interior has stated his support for the program and 
has initiated the process for developing rules and regulations to 
facilitate interstate banking of Colorado River water.
    The Arizona Water Banking Authority, and the support it enjoys 
among Arizona's leaders and water users, demonstrates the strong, 
united support in Arizona for the successful operation of the CAP and 
full utilization of the State's Colorado River entitlement.
    The success of the CAP would not have been possible without 
consistent levels of Congressional appropriations. These appropriations 
have fulfilled the Congressional commitments made in 1968 when the CAP 
was authorized, and in 1986 when a comprehensive cost sharing agreement 
was executed among several entities in Arizona and the U.S. Department 
of the Interior. The State of Arizona appreciates the Subcommittee's 
past support and hopes that it will look favorably on the CAP-related 
activities that continue to require funding.
    Arizona requests a fiscal year 1998 appropriation of about 
$61,000,000 from the Lower Colorado River Basin Development Fund for 
CAP facilities. These funds will support construction principally 
focused in six major areas: continued work on the damaged siphons, 
awarding facility relocations and site improvement contracts for 
Waddell Dam, close out work on the enlarged Roosevelt Dam, continued 
studies associated with the Tucson aqueduct, continued design and 
construction of Indian delivery systems, and the continued construction 
of sulfur dioxide scrubbers for the Navajo Generating Station.
    The budget for the Hayden-Rhodes Division of the CAP Aqueduct 
covers a number of activities, most notably the continued replacement 
of siphons. The CAP provides water for a number of cities in central 
and southern Arizona. That supply must be reliable with a minimum 
chance of interruption, which requires that the faulty siphons be 
replaced as soon as possible. To fund completion of existing contract 
closeouts and for administration of claims, Reclamation requests 
$900,000. The State believes that a significant portion of this request 
($690,000) represents Reclamation's estimated costs of litigating a 
claim against the contractor that installed the defective siphons. 
Arizona believes Reclamation should pursue this litigation. However, 
the State supports the Central Arizona Water Conservation District's 
(CAWCD) proposal to finance the costs of siphon litigation from funds 
advanced by CAWCD, a proposal that would make unnecessary a federal 
appropriation for this purpose.
    For the Regulatory Storage Division of the CAP, Arizona supports 
Reclamation's request for $7,100,000 to complete activities associated 
with Roosevelt and New Waddell Dams. These include continuing section 7 
consultation activities associated with enlarged Roosevelt Dam based 
upon the 1996 biological opinions for the endangered southwestern 
willow flycatcher. In addition to the federal funding request, the 
cities of central Arizona have committed approximately $5,200,000 for 
the Roosevelt Dam improvements. The federal funding estimate also 
includes money for relocation of facilities at New Waddell and 
recreational facilities development at both New Waddell and Roosevelt.
    The budget for the Indian water delivery and distribution division 
covers a number of ongoing projects intended to help Indian communities 
with contracts for CAP water put this supply to use. Arizona supports 
the Reclamation budget request of approximately $26,400,000 for this 
effort. This appropriation is related to other activities in the State 
to implement Indian water rights settlements. In particular, the State 
supports appropriations for the Southern Arizona Water Rights 
Settlement Act which is discussed later in this testimony.
    The Navajo Generating Station near Page, Arizona provides power to 
the 14 pumping stations along the CAP's three aqueducts. To meet 
visibility requirements of clean air standards, the Department of the 
Interior, the Environmental Protection Agency, the Salt River Project, 
the State of Arizona and the Grand Canyon Trust agreed to install 
sulfur dioxide scrubbers at the generating station. For fiscal year 
1998, the federal government's share of this effort is about 
$20,000,000.
    Approximately $3,700,000 has been requested for protection of 
native fishes. About $3,450,000 of this is requested to implement a 
1994 biological opinion pertaining to the delivery of water via the CAP 
to the Gila River Basin. Although the State supports the protection of 
native fishes, several scientific issues need to be addressed before 
money should be spent on implementation of the biological opinion. In 
fact, Ms. Rita P. Pearson, Director of the Arizona Department of Water 
Resources (ADWR), in a June 29, 1995 letter to the Secretary of the 
Interior, requested that Reclamation reinitiate consultation under 
section 7 of the Endangered Species Act regarding this issue. The 
request was based on ADWR's belief that the hydrologic and biological 
data supporting the biological opinion was fundamentally contrary to 
other available information and data. The State, therefore, recommends 
that appropriations for implementation of the biological opinion's 
reasonable and prudent alternatives be contingent upon a re-evaluation 
of the consultation process and timely resolution of the issues raised 
by ADWR.
    The State supports a federal appropriation of about $1,500,000 to 
begin construction of the Sierra Vista effluent recharge project. This 
valuable project will balance the water needs of the area's federal, 
state, local and environmental water users by helping to ensure that 
future groundwater pumping won't adversely effect flow in the San Pedro 
River. State and local contributions to the project exceed $3,500,000. 
It is important to note that this project is not related to the CAP. 
Therefore, the State recommends that funding for this effort be 
separate from those appropriated under the CAP's authority.
    Terminal storage is critical to the City of Tucson's ability to 
fully utilize its CAP supply. The City is committing significant 
resources to ensure that CAP water will ultimately be directly 
delivered to a substantial portion of its service area. However, 
without terminal storage and the reliability it will bring, Tucson 
cannot prudently invest in the necessary enhanced treatment technology. 
As the City commits millions of dollars to solve the CAP issues, 
Arizona urges the Subcommittee to continue to fund the Bureau's 
planning and environmental work related to terminal storage. Arizona 
requests that approximately $500,000 be placed in Reclamation's budget 
to continue system design and associated environmental programs for 
Tucson's CAP terminal storage.
                             safety of dams
    Arizona hopes to see sufficient funding in the fiscal year 1998 
budget for the Bureau of Reclamation to complete construction of safety 
of dams work in Arizona. Although work is largely completed on 
Roosevelt Dam on the Salt River, and Bartlett and Horseshoe Dams on the 
Verde River, work is still required on Horse Mesa Dam on the Salt 
River. This dam, located up stream of the two million residents of the 
Phoenix metropolitan area, has safety deficiencies. The Plan 6 Cost 
Sharing Agreement executed in 1986 provides that the Salt River Project 
will pay for a portion of the necessary repairs on the dam. A total of 
about $15,610,000 should be budgeted for this important effort. Arizona 
supports Reclamation's fiscal year 1998 budget request of the full up-
front funding to complete the safety of dams repairs to Horse Mesa Dam, 
although Reclamation's budget actually obligates $1,200,000 toward this 
effort in 1998. Funds associated with safety of dams should be 
appropriated to ensure timely completion of construction and 
elimination of concerns over the integrity of the structures.
                  other bureau of reclamation projects
    Arizona's Colorado River entitlement is its single largest source 
of long-term renewable water supplies. Therefore, Arizona is concerned 
about the future water quality of this supply and supports 
Reclamation's Colorado River water quality improvement program, 
authorized under Title II of the Colorado River Basin Salinity Control 
Act. The program responds to salinity control needs of Colorado River 
water users in the United States. The program is cost-shared: the 
states provide 25 to 30 percent of the costs associated with project 
facilities, operation and maintenance. Arizona supports Reclamation's 
fiscal year 1998 budget request of about $16,000,000.
    Arizona also supports funding, under Title I of the Act, about 
$9,600,000 for maintaining the ready reserve status of the Yuma 
Desalting Plant, and maintaining the United States and Mexican Bypass 
Drains. Also, as part of Title II, Arizona supports Reclamation's 
budget request for $60,000 to continue monitoring, program verification 
and evaluation, and salinity model support in conjunction with the 
Colorado River Water Quality Improvement Program.
    Arizona supports Reclamation's continued efforts associated with 
the Colorado River Front Work and Levee System. The $4,200,000 
requested in Reclamation's budget request will continue construction of 
levees along the main Gila River conveyance channel associated with 
protecting federal, state, and private lands and facilities. 
Additionally, these funds will be utilized to complete the important 
floodway boundary maps and other requirements of the 1986 Colorado 
River Floodway Protection Act (Public Law 99-450).
    Arizona supports Reclamation's commitment to the conservation of 
endangered species in the lower Colorado River region. Arizona urges 
appropriations for Reclamation's participation in the Native Fish Work 
Group ($1,350,000), and other activities within Arizona for a total 
commitment of about $3,700,000. Among those activities is the 
Multispecies Conservation Plan (MSCP), an outstanding cooperative 
effort to address endangered species issues involving several state, 
federal and environmental entities. Because of Reclamation's 
responsibilities on the Colorado River, Reclamation should continue to 
be a major participant in the development of the MSCP.
    Arizona requests approximately $7,000,000 in federal funding for 
the Southern Arizona Water Rights Settlement Act. This funding will 
help the Tohono O'odham Nation to use its CAP water.
    Arizona's economic prosperity is tied to the availability of water 
and the success of federal reclamation and water resources projects 
that this Subcommittee has helped fund. Many of these projects are 
nearing completion and the State hopes to fine tune them to address 
issues resulting from redirecting and channelizing Arizona's water 
resources to promote economic growth. For example, the City of Phoenix 
and the surrounding communities are working with the Bureau of 
Reclamation to help restore a nine mile segment of the Salt River in 
the southwestern corner of the city. The Tres Rios Demonstration 
Project is authorized and ready to move forward. Local sponsors will 
match federal funding in this 50/50 cost-share program. The State 
supports the federal funding request of $1,000,000 for the 
demonstration project. Please note that the State also supports the 
$400,000 recommendation for this project contained in the budget for 
the Corps of Engineers.
    Arizona supports Reclamation's fiscal year 1998 budget request for 
approximately $200,000 to be cost-shared with non-federal funds to 
assist with the Southern Arizona Regional Water Management Study. This 
study will help Tucson-area water providers develop a comprehensive 
water management plan for the Tucson basin. Also, the State supports 
the $200,000 fiscal year 1998 budget requests for the Verde River Basin 
Management Study and $150,000 for the West Salt River Valley Water 
Management Study. These studies will collect hydrologic data regarding 
existing water supplies, develop hydrologic modeling architecture, and 
develop water and wastewater infrastructural systems.
    Finally, Arizona supports Reclamation's efforts in the Yuma region 
associated with water and energy management and development, land 
management and development, operation of existing Reclamation 
facilities, and continued maintenance of the infrastructure of the 
Lower Colorado River system. Specifically, these programs and 
activities include: a well inventory program, a water use accounting 
program, continued development and modification of water and power 
contracts, water conservation studies, scheduling of water deliveries 
to Mexican and American water users, maintenance and restoration of 
fish and wildlife facilities, continued river channel dredging 
activities, and technical support and maintenance of area and field 
offices. Arizona supports the budget request for a fiscal year 1998 
appropriation of about $13,500,000 for these activities and programs.
                      corps of engineers projects
    Arizona has several ongoing projects under the aegis of the U.S. 
Army Corps of Engineers (Corps). Arizona supports the Corps' fiscal 
year 1998 budget request of $2,300,000 to continue construction of the 
Clifton, Holbrook Nogales Wash, and Rillito River flood control 
projects and $825,000 for the planning and engineering design for the 
Tucson Drainage Area project. In the past, Arizona has experienced 
devastating floods. The State must continue to have an active flood 
control program. The Corps projects will add significantly to Arizona's 
flood control and flood damage prevention capability.
    Also, the Corps' general investigation studies should continue to 
be funded. These flood damage prevention studies include the Rio Salado 
study, the North Scottsdale Drainage Area Study, Tortolita Drainage 
Area study, the Rio De Flag study and the Santa Cruz Basin study. 
Arizona supports the Corps' budget request of approximately $1,125,000 
for completion of these studies.
    In cooperation with the City of Tempe, Phoenix is pursuing a long-
term restoration of the Salt River basin near downtown Phoenix and 
Tempe. The Rio Salado project, currently in the feasibility phase, 
requires an additional $540,000 to keep the project on schedule. To 
help complete the feasibility study, the State requests an 
appropriation of $1,500,000 under the Corps' Research and Development 
program. These funds will support an important evaluation of wetlands 
creation technology.
    As noted earlier, regarding the Tres Rios project, the State 
supports the $400,000 recommended for the project in the Corps' budget.
    In summary, the State urges this Subcommittee's continued support 
for funding for water-related projects in Arizona. The CAP with related 
safety of dams and Indian water distribution system needs is at the top 
of the State's list with a total request of about $87,000,000. 
Additionally, the budget for the Colorado River Basin Salinity Control 
Project must be continued. The Corps of Engineers' budget is also 
necessary for continued flood control activities in the state with an 
additional request of funding for six needed studies.
    Thank you for your attention to these very important matters.
                                 ______
                                 
     Prepared Statement of Grady Gammage, Jr., President, Board of 
         Directors, Central Arizona Water Conservation District
    Mr. Chairman: The Central Arizona Water Conservation District 
(CAWCD) is pleased to offer the following testimony regarding the 
fiscal year 1998 Energy and Water Development Appropriations Bill for 
the Central Arizona Project.
    The Central Arizona Project or ``CAP'' was authorized by the 97th 
Congress of the United States under the Colorado River Basin Project 
Act of 1968. We thank the Committee for its continuing support of the 
CAP. The CAP is a multi-purpose water resource development project 
consisting of a series of canals, tunnels, dams, and pumping plants 
which lift water nearly 3,000 vertical feet over a distance of 336 
miles from the Colorado River to the Tucson area. The project was 
designed to deliver the remainder of Arizona's entitlement of Colorado 
River water into the central and southern portions of the state for 
municipal and industrial, agricultural, and Indian uses. The Bureau of 
Reclamation initiated project construction in 1973, and the first water 
was delivered into the Phoenix metropolitan area in 1985. CAWCD 
delivered over 1.1 million acre-feet of water to project water users in 
1996 and anticipates delivering 1.25 million acre-feet in 1997.
    CAWCD was created by the Arizona legislature in 1971 for the 
specific purpose of contracting with the United States to repay the 
reimbursable construction costs of the CAP that are properly allocable 
to CAWCD. In 1983, CAWCD was also given authority to operate and 
maintain completed project features. Its service area is comprised of 
Maricopa, Pima, and Pinal counties. CAWCD is a tax-levying public 
improvement district, a political subdivision, and a municipal 
corporation, and represents roughly 80 percent of the water users and 
property taxpayers of the state of Arizona. CAWCD is governed by a 15 
member Board of Directors elected on a population basis from each of 
the three counties it serves. CAWCD's Board members are public officers 
who serve without pay.
    The Bureau of Reclamation declared the CAP water supply system 
substantially complete in 1993, and declared the regulatory storage 
stage, or Plan 6, complete in 1996. Project repayment is provided for 
through a 1988 Master Repayment Contract between CAWCD and the United 
States. Project repayment began in 1994 and, in 1997, CAWCD's first 
payment for the regulatory storage stage (other than monies advanced by 
CAWCD during construction) was made. To date, CAWCD has contributed or 
repaid over $350 million toward project construction costs.
    CAWCD and the Bureau of Reclamation are actively litigating over 
the amount owed by CAWCD to the United States for CAP construction, in 
addition to other issues. In developing its estimates of CAWCD's 
construction cost repayment obligation, the Bureau of Reclamation has 
completed a series of project cost allocation studies. According to 
Reclamation's most recent analysis, CAWCD will owe $2.33 billion to the 
United States for reimbursable CAP construction costs. In CAWCD's view, 
CAWCD's repayment obligation cannot exceed $1.781 billion under the 
Master Repayment Contract. Indeed, the $2.33 billion figure exceeds by 
more than $330 million even Reclamation's own interpretation of the 
repayment ceiling provided for in the Master Repayment Contract. 
Nevertheless, Reclamation continues to request funds to support 
reimbursable CAP activities that may be unnecessary and has made no 
arrangements with CAWCD to repay these additional costs. Furthermore, 
CAWCD is concerned that Reclamation's current project cost estimate may 
not properly account for CAP construction costs and that its cost 
allocation studies do not properly allocate these costs among 
authorized project functions.
    The Bureau of Reclamation is requesting $61,242,000 for the Central 
Arizona Project in fiscal year 1998. Of this amount, $26,422,000 is 
requested for the construction of Indian distribution systems, and 
$20,389,000 is requested for continuation of construction of sulfur 
dioxide scrubbers at the Navajo Generating Station (NGS). This leaves 
$14,431,000 for other CAP activities.
    It is worthy of note that virtually all features of the project 
that are subject to repayment by CAWCD and are likely to be constructed 
(other than reliability features for the Tucson area which have been 
deferred) are now complete, are in repayment status, and are being 
operated and maintained by CAWCD. Significant work remains to be done 
to complete Indian distribution systems and some work remains to be 
done to install sulfur dioxide scrubbers at NGS; however, much of this 
work is being accomplished by entities other than Reclamation. For 
example, the NGS scrubber project is being completed by the Salt River 
Project, and the distribution system for the Gila River Indian 
Community (GRIC) is being constructed by the Community itself under an 
Indian self-governance agreement. CAWCD fully supports appropriations 
necessary to complete all Indian distribution systems and the NGS 
scrubbers.
    Of the remaining funds ($14,431,000) that are not related to NGS or 
to Indian distribution systems, a significant percentage is requested 
to support Reclamation's non-contract costs. These non-contract costs 
total about $5,400,000. While CAWCD recognizes that some moneys are 
needed to support Reclamation's non-contract costs, CAWCD recommends 
that the total requested for these non-contract costs be reduced by 
fifty percent, with discretion left to Reclamation to determine how to 
apportion amounts appropriated for non-contract costs among its 
remaining activities.
    Non-contract costs typically represent Reclamation's labor and 
associated overhead costs, such as utilities, rent and travel, which 
are incurred for the administration of Reclamation's construction 
program. CAWCD questions the level of Reclamation's requested non-
contract expenditures since the bulk of Reclamation's construction 
program is complete. While CAWCD congratulates the Bureau of 
Reclamation for its efforts to reduce the size of its workforce as the 
project nears completion, significant additional reductions are needed 
in fiscal year 1998 as work requirements continue to decline.
    CAWCD urges the Committee to consider the following areas of 
concern in determining fiscal year 1998 appropriations for CAP:
Hayden-Rhodes Aqueduct, Siphon Repairs, Non-contract Costs.--$900,000.
    This represents Reclamation's estimated cost of closing siphon 
repair and other contracts and litigating a contract claim against the 
contractor that installed defective CAP siphons. CAWCD firmly supports 
pursuit of this litigation. However, the Committee should know that 
CAWCD, as a partial settlement of one of the issues between CAWCD and 
the United States in the repayment litigation, has made a proposal 
which would allow Reclamation to finance the costs of the siphon 
litigation from funds advanced by CAWCD, without the need for 
appropriations for this purpose. Reclamation has not responded to 
CAWCD's proposal; a positive response would obviate the need for 
$690,000 of this budget request.
    The remainder, $210,000, is requested by Reclamation to continue 
activities associated with closing construction contracts for the 
Hayden-Rhodes Aqueduct. Reclamation has notified CAWCD that eight such 
contracts still remain open, but five will be resolved in 1997. CAWCD 
is concerned about the length of time these contracts have remained 
open and the appropriateness of Reclamation's request for continuing 
non-contract expenditures for this activity.
New Waddell Dam, Non-contract Costs.--$2,075,000.
    New Waddell Dam is the central feature of the CAP regulatory 
storage stage and was completed several years ago. The reservoir formed 
by New Waddell Dam was first filled in early 1994, and the dam was 
declared substantially complete in October 1996. Reclamation is 
requesting $2,075,000 in fiscal year 1998 to cover non-contract costs 
to support its remaining activities at New Waddell. Reclamation has 
indicated to CAWCD that its remaining activities include closing nine 
construction contracts in 1997, 10 more in 1998, and administering 
several active contracts for recreation development, various 
relocations, access road construction, and remaining environmental 
work. Upon reviewing these remaining activities, CAWCD questions the 
level of funding requested by Reclamation and the amount of time being 
taken to close construction contracts. With a total program of 
$5,146,000, about 40 percent or $2,075,000 is identified for non-
contract activities. These non-contract costs appear excessive and, in 
CAWCD's judgment, should be significantly reduced.
Modified Roosevelt Dam, Non-contract Costs.--$1,574,631.
    Like New Waddell Dam, Modified Roosevelt Dam was declared 
substantially complete in 1996. Reclamation is requesting $1,574,631 in 
fiscal year 1998 to cover non-contract costs to support its remaining 
activities at Modified Roosevelt Dam. Reclamation has indicated to 
CAWCD that its remaining activities at Modified Roosevelt Dam include 
closing three construction contracts and continuing work associated 
with accomplishing reasonable and prudent measures necessary to protect 
the endangered Southwestern Willow Flycatcher. CAWCD supports 
appropriations necessary to protect this endangered species; however, 
upon reviewing Reclamation's other remaining activities, CAWCD 
questions the level of funding requested by Reclamation to support its 
non-contract costs. Out of a total request for $7,173,000, about $5.2 
million is for work to be done by others, with Reclamation identifying 
$1.6 million of the remaining amount for non-contract activities. CAWCD 
believes that some portion of the $1.6 million should be eliminated 
from Reclamation's budget request.
Middle Gila Division.--$10,000; Upper Gila Division.--$10,000; Drainage 
        Division.--$10,000.
    These divisions of the CAP have been ``indefinitely deferred.'' 
CAWCD does not believe that appropriations are necessary for these 
features.
Permanent Operating Facilities, Non-contract Costs.--$248,000.
    Reclamation indicates that this budget request is intended to cover 
its demobilization costs for moving Reclamation staff from the CAP 
headquarters complex in Phoenix, Arizona. CAWCD met with Reclamation on 
January 31, 1997 and again on February 28, 1997, to discuss this and 
other issues, and was advised that Reclamation's demobilization would 
be accomplished by September 30, 1997. Therefore, CAWCD questions the 
need for fiscal year 1998 funds for this activity.
Other Project Costs, Water Allocations, Non-contract Costs.--$172,000.
    Reclamation has indicated that these funds are requested to support 
staff activities associated with allocations and subcontracting for CAP 
water. The reasons for Reclamation's request are not clear since there 
are no current or anticipated activities in this area associated with 
CAP, and all costs of transferring existing CAP allocations have been 
borne by the prospective subcontractors.
Other Project Costs, Curation Facilities, O&M.--$407,000; Non-contract 
        Costs.--$75,000.
    Reclamation's plans for providing for permanent storage and 
curation of artifacts unearthed during CAP construction are not clear. 
These funds are being requested to pay National Park Service charges to 
rent space to store these artifacts at the Federal building in Tucson, 
Arizona, and to support non-contract costs. Reclamation is planning a 
permanent repository on the Gila River Indian Reservation. CAWCD 
supports the construction of this facility; however, it is not clear if 
this facility will house all the artifacts, or how, by whom, or at 
whose expense the facility is to be staffed and operated. CAWCD would 
be willing to provide temporary storage space for these artifacts at 
its headquarters complex in Phoenix, Arizona, until the permanent 
facility is completed. This would allow Reclamation to apply the 
requested fiscal year 1998 funds toward accelerating construction of 
the permanent repository.
Other Project Costs, Native Fish Protection.--$3,650,000.
    Most of these funds ($3,450,000) are requested to implement a 1994 
biological opinion of the U.S. Fish and Wildlife Service (FWS) 
pertaining to delivery of CAP water to the Gila River Basin. The funds 
are for construction of fish barriers ($2,745,000), payments to FWS for 
non-native fish eradication and native fish conservation ($500,000), 
and Reclamation's non-contract costs ($205,000). An environmental 
organization has now sued Reclamation and FWS on the basis that the 
reasonable and prudent alternatives of the biological opinion are not 
stringent enough. CAWCD, on the other hand, believes that the 
biological opinion is not supported by fact or science. This matter 
will be at issue for some time. Since the litigation may produce a 
result which is very different from that currently provided for in the 
biological opinion, no funds should be appropriated to implement the 
biological opinion until the pertinent issues are resolved. Reclamation 
has indicated to CAWCD that it needs the $205,000 in non-contract costs 
to defend the lawsuit, however, and CAWCD does not object to an 
appropriation for this purpose. CAWCD also does not object to the 
requested appropriation of $200,000 in support of the Endangered 
Species Act activities on the Santa Cruz River Basin. Of the total 
requested ($3,650,000), CAWCD believes that no more than $405,000 
should be appropriated under this item.
Fish and Wildlife Management and Development.--$1,450,000.
    CAWCD has no objection to the expenditure of funds for this 
purpose; however, since it is not CAP related, CAWCD requests that 
funds be appropriated under other authority.
Indian Distribution Division, Non-contract Costs.--$1,788,000.
    As previously stated, CAWCD strongly supports full funding for 
construction of Indian distribution systems. CAWCD understands that the 
GRIC distribution system is being developed by GRIC itself, that 
certain Indian distribution systems will be constructed by other Indian 
communities pursuant to 638 contracts, and that Reclamation will 
construct the other facilities. Reclamation's requests for funds to 
support its non-contract costs to administer construction of Indian 
facilities may be inconsistent when compared to work anticipated to 
commence in fiscal year 1998 or work already underway. These requests 
warrant scrutiny.
                               conclusion
    Virtually all essential reimbursable features of the CAP have been 
declared to be substantially complete, are in repayment status, and are 
being operated and maintained by CAWCD. CAWCD and the United States are 
engaged in litigation about the amount owed by CAWCD for CAP 
construction.
    CAWCD is actively working toward resolution of the repayment 
dispute and looks forward to restoration of a positive working 
relationship with the Bureau of Reclamation. However, in CAWCD's view, 
the remaining federal role associated with CAP can be effectively 
discharged with a smaller Reclamation staff, and additional staff 
reductions are needed. Therefore, CAWCD believes that reductions in 
Reclamation's budget for non-contract costs are called for. In 
addition, CAWCD believes that a review of Reclamation's accounting of 
CAP construction costs and its allocation of these costs among 
authorized project functions is essential.
    CAWCD welcomes this opportunity to share its views with the 
Committee, and would be pleased to respond to any questions or 
observations occasioned by this written testimony.
                                 ______
                                 
Prepared Statement of Jim Dunlap, Board Member, New Mexico Rural Water 
                              Association
    Mr. Chairman, thank you for allowing me, as a Board Member for the 
New Mexico Rural Water Association and representative for the over 800 
small communities with water systems in New Mexico to appear before 
this Committee today. I am also here on behalf of the all the other 
State Rural Water Associations and rural water folks all over this 
country to thank you for your personal support for small and rural 
water systems over the past twenty years.
    Today, I am here on a different subject from the Safe Drinking 
Water Act and EPA Funding. Today, I would like to discuss the 
importance of the Bureau of Reclamation and its water projects to rural 
communities in the west and the need to initiate a new relationship 
between the Bureau and the small and rural water system in each state. 
These water projects are of growing significance to many small and 
rural communites in their effort to improve the public health and 
strengthen local economic opportunity. I am here today to request the 
support of you and the Committee for providing funding for a Rural 
Water Technical Assistance Initiative in each of the 17 western states.
    Specifically, we are requesting $2.5 million for the expansion of 
grassroots on-site technical assistance program to fund a full time 
person working within each state rural water association. This person 
would assist small systems and rural communities to coordinate their 
short and long range water needs with the broader federal and state 
water supply and conservation programs. This could include creation of 
regional water systems, centralized water treatment, tradeoffs for 
water rights from irrigation supplies, or increased use of surface 
supplies to save groundwater. Also this person would be available to 
work with water systems officials on Indian and tribal lands.
Background
    Over the past ten years, rural communities have found themselves to 
be part of a much larger problem involving the securing and 
distribution of increasingly scarce western water supplies. In 
addition, the enforcement of the 1996 amendments to the Safe Drinking 
Water Act have placed pressure on small systems to improve water 
quality through consolidation or obtaining new water sources.
    As a result, the future of rural water is now tied to emerging 
state and federal water plans in the western states. Depletion of 
aquifers, changing water rights, and construction of distribution 
systems over wide geographic area are going to be the major issues 
facing rural water system in the immediate future.
    What is needed is a new focus on integrating the needs of rural 
water systems into the larger strategies of state and federal 
governments for water supply, water conservation and water distribution 
systems. The access and delivery of water will determine the quality of 
drinking water to rural communities.
    There is a need for a full time person working within each state 
rural water association to assist small systems and rural communities 
to coordinate their long range water needs with the broader water 
supply and conservation programs. This could include creation of 
regional water systems, centralized water treatment, tradeoffs for 
water rights from irrigation supplies, or increased use of surface 
supplies to save groundwater.
    The primary objective of the program is to define an approach for 
more effectively integrating the grassroots on-site technical 
assistance of state Rural Water Associations with the major water 
resources responsibility of the Department of the Interior in the 17 
western states. Both the Environmental Protection Agency and the USDA 
Rural Utility Service use the state rural water association in each 
state to improve compliance with the Safe Drinking Water Act and to 
assist high risk small communities to obtain funding for new systems. 
The Bureau of Reclamation needs to do the same.
    Our initiative is an alternative to increased federal regulations. 
We believe that technical assistance operated by local governments 
provides more environmental benefits than increasing the size of the 
regulatory bureaucracy. We also feel that we are able to work in a 
special environment because we are not the regulators. This ``good 
neighbor'' element allows acceptance in Indian Lands and with local 
elected officials where environmental regulators may have more 
difficulty.
Proposal
    The Bureau of Reclamation--Rural Water Association Partnerships 
would add an important new dimension to the Bureau's efforts to improve 
water management and water use in the more arid western states. The 
program would provide a full--time person in the 17 Western States to 
demonstrate the effectiveness of mobilizing the state Rural Water 
Associations resources to:
  --Provide on-site assistance to communities that have access or are 
        seeking access to Bureau water resources. This includes the use 
        of consolidations, new construction and changed operating 
        procedures to improve local water quality.
  --Where appropriate and in some states, provide on-site assistance at 
        the request of and support of Indian Tribal Reservation and the 
        Indian Health Service in their efforts to improve the delivery 
        of quality drinking water throughout the reservation. This 
        circuit rider would strengthen the local operation capability 
        and allow tribes to improve water system management similar to 
        those improvements achieved by small community water systems 
        through similar circuit rider programs funded by the Department 
        of Agriculture.
  --Work with BOR, state government and local communities to develop a 
        simple strategy for improving the use of Bureau of Reclamation 
        water resources for rural domestic consumption. This strategy 
        would tie BOR priorities into the funds spent through the USDA 
        Rural Utilities Service and the new EPA drinking water state 
        revolving loan funds.
  --Other primary services provided to water utilities will include 
        water conservation programs for water utilities and irrigation 
        districts, water audits, leak detections, water meter 
        installations/repairs, drought preparedness, regional water 
        supply development, water rates structure, and wastewater 
        systems improvements.
Proposed Appropriation for Project
    Provide $2,500,000 for the seventeen state rural water association 
grassroots circuit rider technical assistance programs. Each state 
rural water association would receive $107,000 per program and the 
National Rural Water Association would be responsible for managing, 
evaluating, and reporting on the effectiveness of the overall project.
Examples of Work
    The impact of the Bureau of Reclamation on the improvement of 
community water systems in the west is best illustrated by the role 
that the Bureau of Reclamation sponsored multi county rural water 
systems such as Webb, Tricounty and others have played in South Dakota. 
Without these Bureau of Reclamation projects there would be inadequate 
safe drinking water supplies in much of rural South Dakota. The South 
Dakota Bureau projects have increasingly relied on the rural water 
association circuit riders to assist in resolving small system 
relationships with major water supply efforts. It is this growing need 
that establishes the reason for requesting BOR funding for a circuit 
rider in each state with the primary responsibility for coordinating 
small community needs with the BOR water resources available in rural 
areas.
    On a corresponding need in most states the assistance provided to 
Indian Reservations by these same circuit riders provides the missing 
interface between local governments, water projects, and reservations 
that is so frequently requested. Our experience is that on-site 
discussions solve the vast majority of water supply problems and set 
the groundwork for long range solutions. This is needed if the federal 
government, state and local governments and tribes are going to 
conserve scarce water supplies in the west. The following are examples 
of the type of tribal assistance that would be addressed by this 
program.
    North Dakota, Trenton.--The city of Trenton is located in Williams 
County and serves 150 connections. The city of Trenton is primarily an 
Indian community and is located on the very western edge of North 
Dakota. Recently they started to purchase their water from the city of 
Williston. Since the city has started purchasing their water, the 
system has been losing money in its water account. After going over the 
system's expenses and water rates, a new rate structure was 
recommended. Previous to this, the system still had a declining water 
rate--as in, the more water used, the cheaper the cost per thousand. 
Now that the system is purchasing water, the rate would remain 
constant. The long-term benefits to the water system in assisting them 
change their water rates will be that they will be able to more easily 
cover all their cost and start building a much needed reserve fund for 
future needs. This shows them that closer attention must be contributed 
to water rates and other charges. Every gallon of water purchased and 
lost is money lost to the system.
    Arizona, Eden.--The Eden Water Company is located in Graham County 
and serves 100 connections. Verna Rae Colvin from the Eden Water 
Company requested assistance from the Arizona Small Utilities 
Association Circuit Rider. The system had been experiencing a water 
loss problem. The system is losing more water than is being sold to 
customers for the last two months. Long transmission lines 
(approximately 8 miles) are carrying water to the distribution systems 
with some customers on transmission lines. The main line and crossing 
valves are buried, and some have never been found in the last 10 to 15 
years. The Circuit Rider assisted with valve location and leak 
detection and customers meter testing throughout the water system. 
Daily meter readings at the source of supply are now being taken. As a 
result of this contact, accounting for water loss and correcting the 
problem will save the Eden Water Company approximately $7,000 per year 
in purchased water. Locating main line water valves will limit 
customers who would be out of water during the water main and service 
line breaks. By conducting a valve exercise program, water line valves 
will be operational when needed. The operator is more aware of the 
system due to valve, meter and service crossing locations.
    Idaho, Harrison, DW.--The City of Harrison is located in Kootenia 
County. The city water source is from metered ground water. There are 
approximately 150 metered connections and the system does not have 
full-time disinfection. The operator, Rhonda Wilcox, is full-time, but 
not certified. The Idaho Rural Water Association Circuit Rider was 
requested to assist the operator. The system was losing approximately 
100,000 gallons of water per day. The Circuit Rider delivered the Idaho 
Rural Water Association's leak detector to the City of Harrison. The 
operator was instructed on the use of the detector and instructions on 
how to survey the distribution system. The Circuit Rider and operator 
began checking every meter on the system. The operator was comfortable 
with using the equipment to proceed with attempting to locate the water 
leak. The following day, the operator located the leak. A one-inch 
water meter had frozen and broken. The repairs were made and the water 
loss eliminated. The operator was trained on the proper use of the leak 
detector and how to survey the water system. In the future, the 
operator will be able to use the training provided to locate water loss 
in the water system.
    Idaho, Shoshone County.--Avery water system is located in Shoshone 
County and serves 29 unmetered connections. The system is supplied by a 
well which is chlorinated and unmetered. The operator is part-time and 
is not certified. Their pump was running almost continually. The Idaho 
Rural Water Association's Circuit Rider reviewed the system and began 
isolating parts of the system. Two leaks were located with the IRWA 
leak detection equipment. A shut-off valve was also located with the 
IRWA locator. The Circuit Rider reviewed their well and made some 
recommendations for improving their system. The recommendations were to 
install a run light, and a meter at the well head. Due to the leaks 
found and repaired, the system will save in excess of $60 per month in 
power savings. The operator will be able to use the leak detector loan 
equipment offered by IRWA. By installing a well head meter and run 
light, the operator will be able to monitor the well production and run 
time. Use of this information will help the operator to recognize the 
next time a leak occurs.
    Montana, Deer Lodge.--The city of Deer Lodge is located in Powell 
County, Montana, and serves nonchlorinated water to 1,230 non-metered 
connections. The system is supplied by a groundwater source consisting 
of two metered wells. The full-time operator, Don Roberts, is 
certified. The operator contacted the Circuit Rider early one Sunday 
morning and requested immediate assistance with locating a water leak. 
The city's 2\1/2\ million water tank had only one foot of water in it. 
The Circuit Rider and the operator began a systematic check of the 
system in an attempt to locate the problem. The Circuit Rider 
determined that the ``leak'' was due to high usage because of hot 
weather and connections that were not metered. At their second well, a 
pilot control valve had been installed, and the pump had not been put 
back into operation. The Circuit Rider immediately checked the 
installation and found everything to be in order. He instructed the 
operator on the operation of the new control valve and the pump was 
started. By 7:00 am the next morning, the tank was three-quarters full. 
The Circuit Rider met with the mayor and recommended installing water 
meters which would save the system approximately $1,000 per month.
    Nevada, Pioche.--Leak detection training was provided for Pioche 
Public Utility. Three leaks were located in a 2-inch distribution line 
which serviced three houses. The repair of leaks will stabilize line 
pressure above the minimum pressure required by the Safe Drinking Water 
Act, plus save utility district money.
    Nevada, Steamboat Springs.--Steamboat Springs System is located in 
Washoe County, Nevada and serves unchlorinated water to 290 connections 
that are not metered. The system is supplied by a groundwater source 
which is metered. Tom Reese is the new full-time operator; he is not 
certified. The water system requested the Circuit Rider's help in 
locating some valves. The Circuit Rider was also asked to explain fire 
hydrant operation and maintenance. The operator received assistance in 
the location of the valves. He now has knowledge of the proper 
operation and maintenance of fire hydrants, including the importance of 
a regular exercise program for valves and fire hydrants.
    North Carolina, Woodfin.--Woodfin Sanitary District is in Buncombe 
County and serves 2,100 connections. The water system was experiencing 
water pressure problems in upper areas and water loss. The State 
Regulatory people were pushing for some results. The problem area was 
located and later pinpointed by process of elimination due to 
interference in attempting to use leak detection equipment. The leak 
was located under a railroad track where an 8 inch water line was in 16 
inch casing. The leak was midway of the encasement and flowed to the 
end drainage directly into a damaged sewer line. This explained some of 
the difficulty in locating the leak. It had become an 11,000,000 gpd 
leak and, when fixed, pressure from the other water system was 
eliminated. The staff is now much better prepared to deal with this 
type of problem due to the on-site assistance and training using leak 
detection equipment and pressure recording equipment, as well as simple 
field tools, and, most importantly, the process of elimination approach 
when necessary.
    South Dakota, Butte-Meade, DW.--The Circuit Rider was requested to 
join the cooperative efforts of the Butte County Extension Office, FmHA 
District Office, and Butte-Meade Sanitary District during a public 
hearing to discuss the water system projected expansion project. The 
Circuit Rider was the main speaker, discussing the benefits, process, 
and potential addition of area ranchers, residents and communities, and 
the funding process needed. This system needed guidance and information 
to present to the attendees who are very concerned and in dire need of 
quality water. The water in this area is difficult to find, and it 
would be very costly to drill a new well. The benefits of the users 
hooking up to this system are many; most of all they would receive good 
quality water. At the present time, many ranchers in the proposed area 
have to haul the water for livestock and household use. Many people who 
live on acreage or just a household are also faced with poor quality 
water and must also haul water. The end result from this meeting was 
the information provided to the attendees of the possibility of a water 
system's capability to serve them a sufficient supply of quality water.
    Colorado, General, DW.--Spread Eagle Water System is located 
approximately sixteen miles northwest of Westcliffe, CO. This system 
serves fifteen year-round connections and uses a ground water source to 
supply the system. Joe Defries, system operator, contacted CO Rural 
Water for assistance. The Circuit Rider conducted leak detection on 
three different sections of water line. Four leaks were found. The 
amount of water being lost was approximately 3.3 gallons per minute. As 
a result of this contact, the system saved approximately $500 in leak 
detection costs and water loss.
    Idaho, Lapwai.--The Circuit Rider worked with the Nez Perce Indian 
tribe on five separate housing developments, investigating meter 
installation and some type of utility billing system. Possible 
connection to the city of Lapwai water system for one of the 
developments was also discussed.
Case Study
    Idaho.--The following local water issues represent candidates for 
assistance:
  -- Lapwai.--The possibility of the City of Lapwai taking over the 
        operation and maintenance of the NezPerce tribe drinking water 
        and wastewater systems that are in close proximity to the city.
  -- Worley.--Currently discussing the possibility of the Coeur D' 
        Alene tribe assisting with the construction of a new well and 
        storage tank. In return the city would operate the system which 
        is on the reservation and includes the city of WORLEY.
  --Kamiah.--Discussions in first stages for the city to take over the 
        operation and maintenance of the Indian drinking water system 
        in close proximity to the city.
  --Fort Hall.--Major contamination problem with the water supply. 
        Contamination may be related to chemicals that were used on 
        Indian ground that may by used be some farmers in the area. The 
        system has put in a charcoal filter but the problem still is 
        being discussed.
                                 ______
                                 
                Prepared Statement of the Navajo Nation
    Mr. Chairman and Members of the Subcommittee, on behalf of the 
Navajo Nation, America's largest Indian nation, and President Albert 
Hale, the Navajo Nation appreciates this opportunity to present the 
Navajo Nation's fiscal year 1998 funding request to the Subcommittee.
    At the outset, I want to thank Chairman Domenici and Ranking 
Minority Member Reid, as well as the other Subcommittee Members for 
their attention to the Navajo Nation's needs in the past years. We look 
forward to continuing our productive relationship with the Subcommittee 
on funding efforts for Indian energy and water development programs.
                           the navajo nation
    The Navajo Nation encompasses 17.5 million acres, spanning the 
states of Arizona, New Mexico, and Utah. The Navajo Nation lies on the 
arid and semi-arid uplands of the Colorado Plateau, with an average 
elevation of 6,000 feet above sea level, and an average annual 
precipitation ranging from less than 6 inches in the Painted Desert and 
San Juan River Valley, to more than 20 inches on isolated mountain 
peaks.
    The Navajo Nation is also endowed with significant renewable and 
non-renewable natural resources, including surface and groundwater, 
rangelands and woodlands, irrigated farmlands, forests and lakes, fish 
and wildlife, and substantial reserves of coal, oil, and natural gas.
    Despite these natural endowments and our significant economic 
potential, socio-economic conditions on the Navajo Nation are 
comparable to those found in underdeveloped third world countries. The 
Navajo Nation is characterized by unemployment levels ranging 
seasonally from 31 percent to 50 percent; per capita income averaging 
$4,106; and over 56 percent of its people live below the poverty level. 
Basic ``necessities'' of life, taken for granted elsewhere in America 
are sorely lacking in the Navajo Nation: 77 percent of Navajo homes 
lack plumbing, 72 percent lack adequate kitchen facilities, and 76 
percent lack telephone service.
    Our rural development deficit contributes to a seemingly never-
ending downward spiral. We are constantly seeking to attract jobs and 
businesses to our reservations to spur economic growth and address our 
massive infrastructure deficiencies, but those infrastructure 
deficiencies (and the resulting higher non-wage costs facing businesses 
locating on reservations) continually undercut and frustrate our 
efforts. The Navajo Nation's primary source of revenue is derived from 
its natural resources. Accordingly, the Navajo Nation has made 
substantial investments of its limited financial resources into the 
management and development of Navajo natural resources, including water 
resources development and maintenance.
    However, the Navajo Nation's own revenues from taxes and royalties 
are decreasing; we estimate by as much as 10 percent in the coming 
year. Depletion of the oil and gas resources and the expected negative 
impact on coal sales by the recent deregulation of the American energy 
market has jeopardized the flow of the Navajo Nation's revenue stream. 
And unlike a very small percentage of Indian nations, the Navajo Nation 
has not legalized nor benefitted from Indian gaming.
    Therefore, the Navajo Nation requests that the Subcommittee direct 
the Bureau of Reclamation to support the Navajo Nation with the same 
level of attention, expertise, and assistance which have long 
benefitted other regions and made possible the prosperity of the west. 
The federal trust responsibility is not in the province of a single 
agency, but instead is shared by all federal agencies.
    Some of the projects needed in the Navajo Nation are obvious and 
have been defined for some time. For example, there are at least 12 
major unsafe dams in Arizona and New Mexico. These twelve dams total 
71,130 acre-feet for surface water storage, approximately 90 percent of 
the total Navajo Nation storage capacity. Eight of these dams are 
currently listed as ``high'' or ``significant'' hazards on the 
Department of the Interior's technical priority list of deficient dams. 
Correction of deficiencies to these dams may require as much as $100 
million.
    Another project for which planning was first authorized in 1971, is 
the Navajo-Gallup Pipeline. This pipeline would serve the eastern part 
of the Navajo Nation, Window Rock, AZ, and the city of Gallup, NM--a 
widespread area where groundwater is not available in quality or 
quantity. Planning assistance for the Pipeline is critical at this time 
to answer questions raised by constraints on water availability 
dictated by the application of the Endangered Species Act in the San 
Juan River Basin. Additionally, the Navajo Nation requires research and 
planning to determine solutions to the other water needs of the Navajo 
Nation.
                     fiscal year 1998 funding need
    The Navajo Nation is seeking continued assistance from the Bureau 
of Reclamation and the Department of the Interior to actively manage 
the future development of Navajo water resources and these requests 
reflect necessary funding for the following high priority programs.
Indian Dam Safety Technical Assistance ($500,000)
    In 1994, Congress enacted the Indian Dam Safety Act (Public Law 
103-302), providing for the maintenance of dams on Indian lands. This 
Act (Section 4(g)) authorizes the Secretary of the Interior to ``obtain 
technical assistance on a non-reimbursable basis from other department 
and agencies.'' The Navajo Nation strongly recommends that the 
Subcommittee provide funding to the Bureau of Reclamation for this 
program, since annual appropriations funded under the Bureau of Indian 
Affairs do not come close to meeting the needs of the Navajo Nation.
    The Navajo Nation Safety of Dams program was created to coordinate 
with the BOR and the BIA all activities related to the completion of 
structural improvements to hazardous dams. This program will continue 
the necessary actions and improvements to address the safety 
deficiencies identified through the safety evaluations of existing dams 
project.
Drought Contingency and Water Management Plan ($200,000)
    In 1997, the Navajo Nation and Bureau of Reclamation will begin 
Phase 3 of an ongoing project (started in 1995) to develop detailed 
plans and recommendations for a drought response and rural water supply 
plan, and develop a database and data base management system for 
groundwater monitoring within the Navajo government. Phase 1 identified 
issues that water management planning efforts needed to address. Phase 
2 will develop public consensus for the proposed planning effort.
Technical Studies for the Navajo Nation Clear Creek/Chevelon Water 
        Supply Project ($225,000)
    Funding is requested to evaluate water development projects on the 
Navajo Nation. This request would assist the Navajo Nation in 
developing a plan for water pipeline to serve Navajo communities in the 
southern portion of the Navajo Nation and to acquire technical 
information to develop a project description adequate for Endangered 
Species Act Section 7 consultation and NEPA requirements. The study 
area is the three canyon area south of the Navajo Nation, which 
includes Clear Creek, Chevelon Creek, and Jacks Canyon Creek. The 
proposed project will deliver water from this area to the communities 
near Leupp, AZ for municipal and industrial purposes.
Planning Activities for the Navajo-Gallup Pipeline Project ($150,000)
    Existing groundwater supplies in northwest New Mexico and 
northeastern Arizona are inadequate to meet expected future demands. 
This funding for preliminary studies for the San Juan River Navajo-
Gallup Pipeline Supply Project will assist in the planning of a water 
pipeline to serve communities in the eastern portion of the Navajo 
Nation and the City of Gallup, NM. Obstacles created by the Endangered 
Species Act seriously jeopardizes the completion of this project.
                               conclusion
    On all Indian reservations water is life. The Navajo Nation hopes 
that the Members of this Subcommittee understand the importance of 
water resource development and protection to not only the Navajo 
people, but also to the entire Southwest. The Navajo Nation appreciates 
the support of the Subcommittee.
                                 ______
                                 
Prepared Statement of Iris Z. Bletsch, Chairman, Board of Directors and 
Gale Wm. Fraser, II, P.E., General Manager/Chief Engineer, Clark County 
             Regional Flood Control District, Las Vegas, NV
    Presented herewith is testimony in support of appropriations in the 
amount of $30,400,000 necessary for the U.S. Army Corps of Engineers to 
continue construction of the Tropicana/Flamingo Washes flood control 
project. This project is located in the rapidly growing Las Vegas 
Valley in Southern Nevada.
    The Las Vegas Valley has experienced unprecedented growth over the 
past twenty-five years and all signs indicate that this growth will 
continue for several more years. People have moved into the area from 
all parts of the nation to seek employment, provide necessary services, 
and become part of this dynamic community. Clark County's population 
has boomed from 616,650 to slightly more than 1.1 million during the 
past decade. It is estimated that 5,800 people relocate to the Las 
Vegas Valley every month of the year. The latest statistics show that 
nearly 30,000 residential units are built annually. Once all these 
factors are combined, the result is that the Las Vegas Valley is one of 
the fastest growing areas in the nation.
    Since 1960, the area has also experienced at least seven ``million 
dollar floods''--floods which caused in excess of $1,000,000 in damages 
to public and private properties. In that same time frame at least 23 
people have lost their lives in nine separate flash flood events. In 
1990, three people died in separate flooding incidents, two drownings 
occurred in 1992, and in 1995 there was still another death by 
drowning.
    Much of this devastation and loss of life has occurred along the 
Flamingo Wash. In all likelihood, the level of damages and deaths would 
have been severely diminished or would have been non-existent had the 
projects proposed by the Corps of Engineers been in place. These 
facilities are designed to collect the flood flows from a 160 square 
mile contributing drainage area, funnel them into detention basins, and 
then release these flows through the urbanized area of the Las Vegas 
Valley at non-damaging rates. Because flow over the alluvial fans which 
ring the Valley is so unpredictable in terms of the direction it will 
take during any given flood, all of the components of the Corps' plan 
are critical.
    The plan identified in the Corps' Feasibility Study for the 
Tropicana and Flamingo Washes Project includes four debris basins, four 
detention basins, 28 miles of primary channels, and a network of 
lateral collector channels. The debris basins are designed to collect 
flood flows from undeveloped areas at the headwaters of the alluvial 
fans and trap large bedload debris before it enters the channels and 
causes erosion damage. The detention basins will function to greatly 
reduce the magnitude of the flood flows so that the flows can be safely 
released through the developed urbanized area at non-damaging rates. 
The outflow from the debris basins and the reduced flows from the 
detention basins will be contained in the primary channel system which 
will also serve as outfalls for the lateral collector channels. While 
this latter element is considered to be a non-federal element of the 
entire plan, it is a necessary element for the plan to function 
properly.
    The Feasibility Report for this project was completed in October 
1991, and Congressional authorization was obtained in the Water 
Resources Development Act (WRDA) of 1992. The first federal 
appropriations to initiate construction of the project became available 
through the Energy and Water Resources Development Appropriations Bill 
signed into law by the President in October 1993. Subsequent 
appropriations have allowed for the continued implementation of the 
project. Appropriations to date have totalled $27,945,000. The total 
cost of the project is $217,500,000.
    Last year the Regional Flood Control District was notified by the 
District Engineer of the Los Angeles District, U.S. Army Corps of 
Engineers, that due to reduced federal budget expenditures, fiscal year 
1997 funding was greatly reduced along with subsequent year anticipated 
expenditures. The delay in funding, in the fastest growing community in 
the nation, will mean increased costs due to lost opportunities and 
inflation. The net result is expected to delay the completion of the 
project from year 2001 to year 2006, a five year delay.
    Certain elements of the Corps' plan have already been constructed 
by the local community but require modifications in order to fit into 
the Corps' plan and fulfill the need for a ``total fan approach'' to 
the flooding problems of the Las Vegas Valley.
    The Red Rock Detention Basin was constructed by Clark County in 
1985 and modifications by the U.S. Army Corps of Engineers were 
recently completed in September 1996. The releases from the basin have 
been reduced and its capacity to hold flood waters are enhanced by a 
combination of increasing the height of the embankment, and excavating 
additional material from the impoundment area, thereby increasing the 
level of downstream protection provided by this feature. Although this 
was the first feature constructed, the immediate benefits realized was 
the removal of approximately five square miles and 4,754 parcels from 
the alluvial fan flood zones.
    Clark County also constructed the Upper Flamingo Detention Basin. 
This facility was completed in February 1992 and is one of the main 
components of the entire program. Under the Corps' plan, the releases 
from this feature will also be reduced and its storage capacity 
increased. The Regional Flood Control District and Clark County have 
been working with the local development community in an effort to have 
them remove the excess sand and gravel from the impoundment area of 
this facility. Our goal is to have local contractors remove this 
surplus material for their own use at no cost either to the federal or 
local governments, thus providing a significant savings to total 
project costs as well as to the construction schedule.
    As local sponsors for this important flood control project, both 
the Regional Flood Control District and the Clark County Public Works 
Department anxiously anticipate the construction start of each feature 
of this project. The Project Cooperation Agreement was fully executed 
in February 1995 and construction of the different features is expected 
to continue over the next years. The District has completed a right-of-
way acquisition plan which identifies the land ownership of all of the 
parcels in the area of the Corps' project. As soon as the Corps 
establishes the alignment for each individual feature of the project we 
are in a position that will allow us to acquire the necessary parcels 
in the most expeditious manner possible. The District has also been 
setting aside over $600,000 each month in order to accrue sufficient 
funds to meet our share of the total project costs. This may not sound 
like a significant amount in terms of the federal budget; however, it 
is important to realize that $600,000 is roughly 25 percent of the 
District's total monthly revenues. Obviously, this is a very important 
public works project to this thriving community.
    Details of the Administration's fiscal year 1997 Civil Works Budget 
Request indicates that $20,000,000 is proposed for the continued 
construction of this project. The Los Angeles District of the U.S. Army 
Corps of Engineers informs us that their capability for fiscal year 
1998 is $30,400,000. This funding will allow the project to begin to 
get back on schedule as originally envisioned when the Project 
Cooperation Agreement was executed. Furthermore, funding at this level 
will allow the project to take advantage of opportunities that will 
present themselves during 1998. While these opportunities are hard to 
quantify, opportunities in the fastest growing region in the nation 
will become available and will probably consist of construction of 
certain features in advance of other local infrastructure, thereby 
avoiding construction conflicts and increased construction costs.
    This is an important public safety project designed to provide 
flood protection for one of the fastest growing urban areas in the 
nation. We ask that the committee provide the Secretary of the Army 
with the $30,400,000, the Corps of Engineers' capability in fiscal year 
1998, in order to allow the U.S. Army Corps of Engineers to continue 
the design and construction of additional phases of this desperately 
needed flood control project.
    The committee is aware that proactive flood control is the 
investment required to prevent loss of life and damages. Flood control 
is a wise investment that will, in the long run, pay for itself by 
preserving life and property and reducing the probability of repeatedly 
asking the federal government for disaster assistance. Therefore, when 
balancing the federal budget, a thorough analysis should prove that 
there will be substantial future federal savings in disaster assistance 
that will warrant the continued level of funding through the Civil 
Works Budget appropriations.
                                 ______
                                 

              MIDWEST WATER RESOURCE DEVELOPMENT PROJECTS

 Prepared Statement of J.M. Peterson, President, and Darrel G. Curry, 
     Vice President, Missouri River Bank Stabilization Association
    Mr. Chairman and Members of the Subcommittee: The Missouri River 
Bank Stabilization Association, its officers and members, thank you for 
the opportunity to present this statement to you concerning the fiscal 
year 1998 budget.
    The project to which this statement applies is the Missouri 
National Recreation River project, authorized by the Congress in 1978 
per Section 707 of Public Law 95-625. The Association's request for 
fiscal year 1998 is $200,000 for operation and maintenance of 
structures built prior to 1978 pursuant to Section 32 of the Streambank 
Erosion Control and Demonstration Act. Funding is also needed for 
providing additional access to the river, securing shoreline easements 
to increase wildlife habitat, protecting timber stands along the river, 
providing bank protection where needed and to meet such other needs as 
may be required to maintain progress toward completion of this project.
    This project covers the fifty-nine mile segment of the Missouri 
River from Yankton, South Dakota, to the Ponca, Nebraska, State Park. 
Here, the Missouri is still in a relatively natural or wild state. 
Marking the boundary between South Dakota and Nebraska, it is the sole 
remaining reach of the river below the mainstem dams which is still in 
a relatively natural state. The Missouri below Yankton differs markedly 
from that above. Upstream, the Missouri occupies and is confined by a 
geologically young ``valley'', a valley reshaped and narrowed by the 
latest glaciation. Below Yankton, the Missouri flows in a 
``geologically old'' valley. Here, in a miles-wide valley, the Missouri 
meanders at will until reaching its channelized segment near Ponca, 
Nebraska. While the mainstem dams have all but eliminated the 
Missouri's flooding in the fifty-nine mile reach, the river's historic 
appetite for erosion persists. Indeed, its capacity for erosion has 
increased as its sediments have been deposited in the slack waters 
above the dams. The largely sediment-free waters discharged into the 
reach of river here involved have an increased capacity for erosion. In 
places, this erosion has truly savaged the shoreline. (The Streambank 
Erosion Control and Demonstration Act sought to curb such erosion.) 
With the annual flooding (the ``June rise'') a thing of the past, there 
today is no restoration of eroded lands.
    Of the $21,000,000 authorized expenditure for this project, some 
$2,000,000 has been spent. Your prior support of the project has 
already provided improved access to the river, improved boat landings 
and the addition of interpretive signage.
    Currently, the National Park Service is engaged in a review of the 
extant management plan; a revision is expected to be presented for 
public comment later this year. Among needs and objectives discussed at 
length by the National Park Service's planning team and which will be 
included in its revision, are those items for which the Association 
hereby seeks funding.
    For a more general reason, funding is sought because of the 
impending commemoration of the bicentennial of the Lewis and Clark 
Expedition, 1804-1806. Visitation to this reach of the river is already 
increasing; members of the Lewis and Clark Trail Heritage Foundation 
visited it in August, 1996. A documentary of the trail is being made by 
Ken Burns and Dayton Duncan; much footage of the ``wild Missouri'' was 
shot on this reach of river. Characterized yet by snags, sandbars, 
bends, beaches, chutes, islands, chalk cliffs, timbered bluffs, 
wildlife and waterfowl, this grand old river is well worthy of the 
preservation and protection Congress intended to achieve by its 
inclusion as part of the ``Wild and Scenic Rivers'' System.
    In conclusion, the Association would like to thank you for the help 
you have so readily provided in prior years and for your concern and 
consideration for those farmers, outdoorsmen, environmentalists and 
others comprising the Association.
                                 ______
                                 
   Prepared Statement of Jay L. Kimble, Mayor, City of Stillwater, MN
    Chairman Domenici and Members of the Appropriations Subcommittee, I 
thank you for the opportunity to submit this testimony requesting the 
remaining $2 million needed to complete Phase II of the Stillwater, 
Minnesota flood control project. Phase I, the repair and reconstruction 
of the old levee wall will be completed this Summer, when the flood 
waters recede. Most of the construction work on Phase I was 
accomplished during 1996 with the $2.4 million appropriated for fiscal 
year 1996.
    The $500,000 appropriated in fiscal year 1997 has enabled the U.S. 
Army Corps of Engineers to develop the plans and specifications for 
Stage II, and to complete some work on Phase I. According to the Design 
Memorandum, the total cost for Phase II will be approximately $3 
million. The Minnesota State Legislature appropriated $375,000 and the 
City of Stillwater has placed in the escrow account the remaining 
$375,000 for the non-Federal matching funds for Phase II. The work on 
Phase II is scheduled to begin February 1, 1998.
                          legislative history
    This project was authorized for $3.2 million in the Water Resources 
Development Act of 1992, and this Committee designated $2.4 million in 
Federal funds for the purpose of designing, repairing, extending, and 
expanding the levee wall system in the fiscal year 1994 Appropriations 
Act. The Minnesota Legislature provided half of the required non-
Federal matching funds of $775,000 in appropriations actions in 1992, 
1994, and 1996.
    To date, all non-Federal matching funds for Phase II are either in 
the escrow account, or available for transfer to the escrow fund from 
the State account. Additional State funding will be requested in the 
1998 Legislative Session for Phase III of the project.
    Recognition that additional funds would be required to complete the 
project, the U.S. Congress amended the authorization in the Water 
Resources Development Act of 1997, and increased the project's 
authorization to $11.6 million. This level of funding will permit the 
reconstruction of the existing levee, the extension of the levee to the 
North, and the expansion of the levee wall by the construction of a 
flood wall. The project will then provide the City with a fifty year 
flood protection program, and the ability to increase the system to 
withstand a 100 year flood.
    A study will be conducted by the Corps in 1998 to validate the 
economic feasibility of the construction of the flood wall in Phase III 
of the project. This does not, however, affect the construction work 
planned for Phase II for which funds are requested in the fiscal year 
1998 Appropriations Bill.
    Project Phases.--The $2 million requested will be used for the 
construction of the 900 foot levee extension North of the existing 
levee walls. It is designed to prevent the annual flooding that occurs 
each Spring during the snow melts. There may also be a minimal amount 
for the final costs associated with the Phase I work.
    Phase I included the repair and reconstruction of the existing 
1,000 foot levee wall system where severe deterioration of the lower 
wall has occurred, the development of the plans and specifications for 
Phase I, the preliminary design work for Phases II and III, and a rip 
rap treatment of the South end of the levee. The rise in elevation at 
the South of the old levee permits rip rap to be used rather than 
extending the levee wall system.
    Phase II consists of the extension of the levee wall 900 feet to 
the North of the existing levee wall. This work will require a 4-6 foot 
fill along the shore line. The northern points along the riverfront is 
the location that floods annually, causing the emergency roadway 
adjacent to the levee to become impassable for 4-6 weeks each Spring.
    Phase III includes the construction of a secondary flood wall 125 
feet inland from the existing levee. The wall will extend about two 
feet above the ground. Sheet piling will be driven 15 to 20 feet below 
the surface to prevent the seepage through the porous soil that occurs 
during flood conditions. The secondary flood wall will provide the City 
with a 50-year flood protection plan, and with the use of sandbags, a 
100 year protection program.
                            project schedule
    Phase I--Construction is scheduled for completion by August 1, 
1997.
    Phase II--Work on project design, plans and specifications began 
March 1, 1997, and is to be completed by December 1, 1997.
    Phase II--Advertise for bids on January 1, 1998.
    Phase II--Award bid and initiate construction on February 1, 1998.
    Phase II--Construction complete on Phase II by February 1, 2000.
    Phase III--Initiate study on for flood wall economics on November 
1, 1997.
                        status of project funds
    The Design Memorandum was developed by the Army Corps of Engineers, 
and completed in March, 1995. It includes the preliminary design for 
all three phases of the project. The completion of the project will 
require $8.7 million in Federal funds, and $2.9 million in non-Federal 
matching funds.
    Funds credited to the project thus far include Federal 
appropriations of $2.4 million in fiscal year 1994, for Phase I, and 
$500,000 in fiscal year 1997 for Phase II. The State Legislature has 
appropriated half ($400,000) of the non-Federal matching funds for 
Phase I in 1992 and 1994. The State also appropriated $375,000 in 1996, 
for half of the non-Federal matching funds for all of the project's 
Phase II.
    The City of Stillwater has contributed $400,000 toward the 
remaining matching funds needed for Phase I, and has placed an 
additional $600,000 in the escrow account for all of Phase II and part 
of Phase III. The City of Stillwater has placed $1.01 million in escrow 
for the project, and the State has allocated $775,000 for a total non-
Federal match of $1.785 million. The contributions by the City and 
State will provide matching funds for $7.14 million in Federal funds.
                     flooding anticipated this year
    Flooding North of the levee where Phase II construction will take 
place is an annual event. Ordinarily, these annual floods close several 
businesses near the riverfront, but more critical, it prevents traffic 
on the emergency road adjacent to the levee and the river. This roadway 
is used by the emergency medical teams and law enforcement personnel 
who respond to all accidents on the river. Further, the Stillwater Fire 
Department relies on the river and the roadway for additional water for 
downtown fires. Neither of these emergency units can reach the river 
during the 4 to 6 weeks of flooding each Summer.
    The Winter of 1996-97 has been a difficult one for the upper 
midwest. Snows from November, 1996 are still on the ground just North 
of Stillwater. Without any more snows or rain, the St. Croix River is 
expected to crest on April 15th this Spring at 690 feet. This is three 
feet above the high water levels and flooding experienced in 1993.
    The City has begun construction of a 2,000 foot dike that will 
provide some protection to the citizens and businesses in the flood 
plain. As described to this Committee in previous testimony, the soil 
is very porous as a result of the sawdust and wood debris from the nine 
lumber mills that lined the riverfront in the last half of the 19th 
century. Seepage is so extensive that sand bags do little in preventing 
flooding in the historic downtown section of the City.
         background and progress toward resolving the problems
    The levee wall system is a double wall structure in the shape of a 
stair step. The lower wall had deteriorated to such an extent that over 
half of it was completely gone. This permitted high water levels and 
recreational boating on the river to eat away at the soft under belly 
of the riverfront behind the levee. Phase I of the project will have 
eliminated this problem when work is completed this Summer.
    Stillwater is located on the West bank of the St. Croix River. It 
provides the boundary line between Minnesota and Wisconsin for about 
120 miles until the St. Croix flows into the Mississippi River. The St. 
Croix is one of America's first ``Wild and Scenic Rivers,'' and is 
subject to legislation that protects these beautiful landmarks of our 
nation. One of the few lift bridges in the upper midwest spans the 
river from Stillwater to Houston, Wisconsin. The base of the bridge is 
built into the levee wall. Any failure of the wall would result in the 
closing of the bridge for an extended period of time, according to the 
U.S. Army Corps of Engineers.
    Extensive work on the sewer system in downtown Stillwater was 
completed in 1992, at a cost of more than $7 million. The most serious 
concern, however, is the major sanitary sewer trunk line which services 
the City. It is located less than 100 feet from the levee wall, and 
runs parallel to the wall. Given the make up of the soil in that area, 
extensive flooding along the riverfront could result in the failure of 
the pumping system, and the dumping into the river much of the 1.9 
million gallons of raw sewage that passes through the system each day. 
The Metropolitan Waste Control Commission and the Minnesota-Wisconsin 
Boundary Area Commission have both expressed their concerns and fears 
to the City of Stillwater about this pending disaster. The solution is 
the extension of the levee to prevent the flooding of the area.
    Corps officials stated, `` * * * Subsurface soils investigations 
along the waterfront in Stillwater identified pieces of glass, wood 
and/or layers of sawdust to depths of more than twenty feet below the 
ground surface as remnants of the early logging and sawmill 
activities.''
    Another Corps report stated, ``The extent of the wood and sawdust 
precludes the economics of excavating to remove these materials and 
backfilling with satisfactory soil.''
    While the repair and reconstruction work in Phase I of the project 
substantially reduces the risk of a failure of the wall, it can not be 
eliminated until the levee is extended and the annual flooding of the 
area diminished.
                 historical significance of the project
    The historic implications of the retaining wall system, and its 
solution, are extremely important to the entire State. In recognition 
of the historic significance of Stillwater as the ``Birthplace of 
Minnesota,'' the U.S. Army Corps of Engineer conducted an excellent 
study completed in July, 1985, entitled, ``Historical Reconstruction of 
the Riverfront: Stillwater, Minnesota.''
    The purpose of the study was to provide the Corps of Engineers with 
information to be used in the review of options for flood control of 
the downtown area of the City. The research identified 117 sites in the 
floodplain as being significant to the entire State. Twenty-three of 
these sites are listed on the ``National Register of Historic Places'' 
by the U.S. Department of Interior. All are threatened by the lack of 
an effective flood control system for the community.
    The U.S. Army Corps of Engineers is obligated to protect the 
cultural or man made environment according to the Corps 1985 study. The 
obligation is embodied in that these laws set forth Federal leadership 
in locating, inventorying, and protecting such sites. The proposed 
reconstruction and extension of the retaining wall system does not 
threaten, damage, nor destroy any of the identified historical sites in 
the area. The project as authorized in 1992 and 1996 in the Water 
Resources Development Acts provide the protection necessary to preserve 
these historic structures for future generations.
                  federal involvement on the st. croix
    The St. Croix River at Stillwater, Minnesota is under Federal 
control and management. Further, the Corps of Engineers provides, under 
contract, the dredging of the river. Barge traffic, boat construction, 
commercial passenger traffic, and extensive recreational boating 
continue to maintain a very active port at Stillwater. It is this very 
activity that has contributed, under the authority of the Federal 
government, that has contributed to the deterioration of the 
waterfront, according to the engineers. The Coast Guard shares 
responsibility with the States of Wisconsin and Minnesota in patrolling 
the river.
                            action requested
    Based on the information and data from the ``Design Memorandum'' 
and information prepared by the U.S. Army Corps of Engineers, $2 
million in Federal support will be needed in fiscal year 1998, and is 
requested from this Committee. In recognition of the urgent need for 
the completion of this project, Congress increased the authorization in 
the Water Resources Development Act of 1997 to provide for the 
completion of Phase II, and the opportunity to provide flood control 
measures in Phase III.
    This Committee provided the resources in the fiscal year 1997 
Appropriations Bill to develop the plans and specifications for Phase 
II, the extension of the levee wall system. This work is currently 
underway, and will be completed this year as planned. Now the work must 
be done in fiscal year 1998 to carry out these plans. To delay this 
action will result greater cost to the Federal, State, and local 
governmental bodies. But even of more importance, we would be gambling 
the safety and property of our citizens in the St. Croix Valley.
    We are in full compliance with the National Environmental 
Protection Act, the National Historic Preservation Act (16 U.S.C. 
470(f) and Section 110(f), 16 U.S.C. 470h-2(f), the Minnesota State 
Historic Preservation Office, and have met the special provisions and 
requirements of Federal and State laws that protect the wild and scenic 
rivers, and other State and Federal laws enacted to protect the 
environment and historic sites. We have been working with these 
agencies for many years in anticipation of the construction and 
extension of the levee system, and have a summary listing of their 
letters of support for the project.
    For these reasons we respectfully request that this Subcommittee 
appropriate the sum of $2 million for the completion of Phase II 
construction in the Energy and Water Development Appropriations Bill 
for fiscal year 1998. Thank you for the opportunity to bring this 
critical matter to your attention through this statement. We would be 
pleased to respond to any questions the Members of this Committee may 
have.
                                 ______
                                 
  Prepared Statement of Robert J. Byrnes, Mayor, City of Marshall, MN
    Chairman Domenici, and Members of the Appropriations Subcommittee, 
I appreciate the opportunity to submit this testimony on behalf of the 
City Council and the citizens of Marshall, Minnesota. We are requesting 
$750,000 in federal funds for the construction of Stage II of the flood 
control project authorized in the Water Resources Development Act of 
1986. We believe the $250,000 more than requested by the Corps of 
Engineers can be effectively used in fiscal year 1998 to shorten the 
project schedule by at least three months.
    The Conference Committee designated $400,000 in the fiscal year 
1997 Appropriations Bill. These funds, in addition to $490,000 of non-
Federal funds, have been used for Stage 1 construction, and the 
preparation of plans and specifications for Stage 2 of the project. The 
plans and specs for Stage 2 are being prepared by the St. Paul 
District, and are scheduled for completion by December 31, 1997. The 
City of Marshall has provided an additional $320,000 for the removal of 
silt from the diversion channel and other preparatory work.
    The Corps is scheduled to provide the City of Marshall with the 
project ``footprint'' on April 1, 1997. This will permit the City to 
move forward in the acquisition of the necessary real estate needed for 
Stage 2 of the project. While the project schedule provides for the 
property acquisition to be completed in March, 1998, we will be able to 
complete the acquisition for the downstream part of the project on the 
Northeast section of the City by September 1, 1997. This will permit us 
to begin the initial work on this section of the project four months 
earlier than the project schedule, and to coordinate this work with the 
Ditch 62 project. The amendment to the schedule will not only reduce 
the length of time for the project completion, but provide the 
opportunity for cost savings on both the flood control project and the 
Ditch 62 project.
    The vulnerability of the community to severe flood events creates 
an urgency to complete this project as soon as reasonably possible. As 
this testimony is being prepared, the City is under threat of still 
another flood event. The exceptional snows this past winter has made 
the City susceptible to severe flooding this Spring. The Corps of 
Engineers has provided $60,000 for the construction of dikes along the 
floodplain. The flood prevention dollars amount to 15 percent of the 
total fiscal year 1997 appropriation. Depending on the rate of the snow 
melt, the Redwood River could rise to well over flood stage. Even a 
moderate rain season this Spring could maintain the river at or above 
flood stage. Any acceleration of the construction schedule will assure 
the safety of our citizens and property that much sooner.
                 project authority, funding, and status
    The Marshall Flood Control Project was authorized in the Water 
Resources Development Act of 1986. The total project is estimated to 
cost $9.98 million of which Federal costs are estimated to be $7.38 
million, with non-Federal costs of $2.76 million. The non-Federal costs 
have been provided through the State flood mitigation grant program, 
and by bonding by the City of Marshall. The Design Memorandum and 
Environmental Assessment were completed and approved in 1987.
    The Project Cooperation Agreement (PCA) has been successfully 
negotiated between the Marshall City Council and the District Office of 
the Army Corps of Engineers, and was given final approval by the Corps 
Headquarters in Washington, D.C. The required escrow account has been 
established. Only temporary easements and a five-acre dredged materials 
disposal site were needed for Stage I construction. The work on Stage 1 
is scheduled for completion at the end of 1997.
    The plans and specifications for Stage I were completed and 
approved in September of 1993. The $850,000 fiscal year 1996 
appropriation for the project has permitted the Corps to move forward 
with the advertisement for construction bids for Stage I. The 
development of plans and specifications for Stage II were initiated on 
February 28, 1996, according to the Corps' project schedule. The City 
is responsible for the dredging of the channel at a local cost of 
$318,000, and will be incorporated into Stage I construction, and 
completed in fiscal year 1997.

                       STAGE I--CORPS SCHEDULE \1\                      
------------------------------------------------------------------------
                                                   Beginning  Completion
                     Activity                         date       date   
------------------------------------------------------------------------
Plans and Specs Initiated........................  .........     ( \2\ )
Plans and Specs Approved.........................  .........     9/30/93
Initiate Real Estate Acquisition.................  .........      9/9/96
Construction Contract Advertised.................    6/30/96     8/24/96
Construction Contract Awarded....................    8/31/96     9/27/96
Construction Contract Completion.................  .........    12/31/97
------------------------------------------------------------------------
\1\ The initiation of Stage II construction is not contingent on the    
  completion of Stage I construction.                                   
\2\ Complete                                                            

                            project location
    The City of Marshall is located in the Southwest corner of the 
State of Minnesota, about 145 miles southwest of St. Paul. It is near 
the center of the Redwood River basin. Southwest State University, the 
business district, and most of the homes of the nearly 14,000 citizens 
are located in the floodplain of the Redwood River. Marshall serves as 
the county seat of Lyon County, and is the commercial and agricultural 
center for the region.
    The Redwood River enters the southwest corner of the City, winds 
its way through the City, exiting at the northeast boundary near the 
University campus. The Redwood River basin serves an elongated drainage 
area of approximately 743 miles. The river's elevation drops at the 
significant rate of 19 feet per mile until it reaches the City. There 
the river slope flattens out to an average of about 4 feet per mile. 
The lack of a confining valley, and the reduction in grade on the 
plain, contributes significantly to overland flooding in the Marshall 
area. The geological decline in the elevation in the 50 miles from the 
watershed area to the City of Marshall is greater than the Mississippi 
River elevation decline from Minneapolis to New Orleans (See 
Attachment.)
                           historical summary
    Water and land related problems in the Minnesota River basin was 
first investigated by the St. Paul District Engineer in 1934, but his 
study did not address the flooding and related problems in Marshall. In 
1960, after the severe floods of 1957, improvements were recommended by 
the Corps which included the construction of levees and a floodwater 
diversion channel.
    This flood control project was completed in 1963, by the U.S. Army 
Corps of Engineers to, ``provide protection for the people and property 
of Marshall from the frequent flood risks.'' The major feature of the 
project was a 2.4 mile diversion channel around the west and north 
sides of the City, a 1,840 foot levee at the upstream end of the 
project, and other features. The channel was designed to handle a 6,500 
CFS flow. The overflow, then, would move naturally into the Cottonwood 
River Watershed south of Marshall.
    In 1969, a flood of 8,090 CFS was experienced in Marshall. The 
river channel both upstream and downstream from Marshall was inadequate 
to convey the 1963 design flows either to or from the diversion 
channel. At flows greater than 3,500 CFS, floodwaters bypass the 
diversion channel and flood the inner City of Marshall.
    As a result of the failure of the 1963 flood control project to 
protect the City, other studies were conducted by a private engineering 
firm under the direction of the Corps in 1974. The Corps completed a 
flood control report in 1976, and a feasibility study in 1979. This 
report was updated by a reevaluation of the problems in 1984. The 
current project was then authorized in the 1986 Water Resources 
Development Act. It is important to note that the project as 
constructed in 1963, has worsened the potential of flooding for the 
City. The rate of flow is not adequate to move the flood waters through 
the diversion channel, and other problems.
    The three ``Holiday Floods of 1993'' (Mother's Day, Father's Day 
and Independence Day) occurred at both ends of the diversion channel, 
causing hundreds of thousands of dollars in damages to homes, 
businesses, and the City's infrastructure. As the water levels remained 
at flood stage throughout the summer, it created an atmosphere of fear 
and unrest among the citizens of Marshall.
    In 1995, the Redwood River was again flowing at capacity, and the 
City of Marshall narrowly avoided a disaster worse than the floods of 
either 1969 or 1993. From 9 to 15 inches of rain fell near Montevideo, 
Minnesota, less than 40 miles from the Redwood Watershed District. If 
the storm had moved only a few miles to the southwest, the flood waters 
would have engulfed the City at a rate of 8,000 to 12,000 cubic feet of 
water per second. This is a much greater water overflow than that which 
occurred in the disastrous flooding of 1969, and as much as three times 
greater than the 1993 floods.
    The District Office of the Corps of Engineers provided estimates 
stating that the City would have incurred millions in property damage, 
and that flash flooding of this nature could well have resulted in the 
loss of lives. Corps officials stated that flash flooding of this 
magnitude would have made most emergency measures futile. As a result 
of the flat terrain in and around the City, and much of the Marshall 
community would have been under water.
                       project completion delayed
    The Marshall City Council was deeply concerned regarding the 
project delays, and changes in the completion dates. The project was 
originally scheduled for completion in the Summer of 1998. It was first 
extended to the fall of the year 2000, then extended even further to 
September, 2001. Now it has been moved back to the Fall of the year 
2000. The project was originally scheduled for three years of 
construction work.
    The current delay in the project completion date appears to be in 
the development of the plans and specifications for Stage 2 of the 
project. Initiated on February 28, 1996, the plans and specs are not 
scheduled for completion and approval until December 31, 1997, two 
months less than two years in preparation. It should be noted that 
Stage I construction work planned for 1996, but being done in 1997, is 
not a requisite for Stage II construction.
    The project ``foot print'' is requisite to the acquisition of real 
estate for the project. Generally, the ``footprint'' is determined 
early on in the development of the plans and specs, and good have been 
available to the City so real estate acquisition could have begun much 
earlier. If the ``footprint'' is provided on April 1, 1997, as 
scheduled, the land for the downstream portion of the project can be 
obtained in 3 to 4 months, permitting construction to begin on Stage 2 
in the Fall of 1998. The new schedule delays the initiation of land 
acquisition for nearly a year, or until after the plans and 
specifications for Stage II have been completed by March, 1998. The 
remaining real estate could then be obtained by March, 1998.
    coordination with county ditch no. 62 drainage system essential
    In addition to the Marshall Flood Control Project, the overall 
protection of the City requires the reconstruction and modification of 
the storm sewer drainage system concurrently with the work of the 
Corps. The examination of the drainage problems was acknowledged in the 
General Design Memorandum developed by the Corps for Marshall, but is 
not included, nor is it a part of the funding of this project.
    County Ditch No. 62 serves as the storm sewer drainage system for 
about 60 percent of the City's corporate limits. The Ditch extends 
along the northeast part of the City, in close proximity to the levee 
construction required for the Corps flood control project, and feeds 
into the Redwood River. With the growth of the community, and the 
development of property and the University campus, since the 
construction of the Ditch in 1958-9, the flooding problems in the City 
have been exacerbated by the lack of drainage and poor water movement 
in a system that is no longer adequate for the community. Construction 
is scheduled to begin in the Summer of 1997.
    The City of Marshall, in cooperation with Lyon County and the State 
of Minnesota, a comprehensive storm water system has been planned, 
designed, and is jointly funded by FEMA, the State of Minnesota, Lyon 
County and the City governments at a total cost of slightly more than 
$3 million. There are elements of the Storm Sewer/Ditch Project that 
are closely associated with the Flood Control Project.
    1. Construction work for both projects will be required in the same 
northeastern section of the City;
    2. Ponding areas are required for both projects; 7 acres for the 
flood control project, and 20 acres for the C.D. No. 62 project. Both 
ponding areas will be located in the northeast section of the City.
    3. The C.D. No. 62 Project must remove some 400,000 cubic yards of 
soil from the ponding area and the ditch. The flood control project may 
require some of this soil as fill, and topsoil for disturbed areas. The 
Design Memorandum calls for the purchase of top soil from local 
suppliers.
    4. Unless flood control project is constructed in association with 
the C.D. No. 62 Project, the back up of flood waters can render the 
Ditch improvements ineffective.
    5. Both projects require the acquisition of real estate in the same 
area. By coordinating these efforts, the acquisition of property can be 
accomplished more effectively, and at less cost to both the projects. 
The lack of coordination between the two projects will have the 
potential to create delay factors in one or both of the projects.
    The coordination of the construction of these two water resource 
development projects has the potential for reducing costs, and avoiding 
overlap and contradictions that may disrupt, or otherwise delay the 
construction of either or both projects. An ineffective drainage system 
can defeat the purposes of the flood control project, and the delayed 
completion of the flood control project opens the possibility of 
damaging a newly constructed drainage system.
    Working together, the goals of both projects can be accomplished in 
a timely manner, at less cost to governments at all levels. It will, 
however, require that the Corps' schedule for construction of the 
Marshall project be modified somewhat to accommodate the differences in 
the project time lines. Any reductions in the timeline of the project 
can be accomplished by reducing the time allocated to the City for the 
purpose of real estate and easement acquisitions, and by not delaying 
unnecessarily the initiation of new activities. A request has been 
forwarded to the St. Paul District Office of the U.S. Army Corps of 
Engineers requesting a meeting to resolve these differences, and to 
move forward to complete the project in a reasonable and timely manner.

                        STAGE II--CORPS SCHEDULE                        
------------------------------------------------------------------------
                                                    Date of   Completion
                 Major milestones                    action      date   
------------------------------------------------------------------------
Plans and Specs Initiated........................    2/28/96     2/28/96
Plans and Specs Submitted........................    2/28/97    11/30/97
Plans and Specs Approved.........................   12/31/97    12/31/97
Initiate Real Estate Acquisition.................    3/31/97     3/31/97
Real Estate Acquisition Complete.................    3/01/98     3/01/98
Final Real Estate certified/LERRD................    3/01/99     3/01/99
Construction Contract Advertised.................    3/15/98     3/15/98
Construction Contract Awarded....................    4/30/98     4/30/98
Construction Contract Completed..................    9/30/00     9/30/00
------------------------------------------------------------------------

    The City believes that the construction of Stage II can and should 
be awarded by October 1, 1997, thus shortening the project completion 
substantially.
  --The Design Memorandum has designated the approximate number of 
        acres for which fee titles would be needed (109 acres), 
        perpetual levee easements (29 acres), perpetual channel 
        improvement easements (41 acres), dredged material disposal 
        site (5 acres), perpetual flowage easements (13), and temporary 
        construction easements (24 acres).
  --The ``footprint'' for the construction sites could have been 
        provided within 90 days of the initiation of the Stage II plans 
        and specifications. If it is provided on April 1, as scheduled 
        the downstream acquisitions can be completed by the end of July 
        permitting and construction work to begin in the Fall of 1997.
    The City can complete the acquisition of property and easements in 
9 months, and Stage 2 construction continuing in the Spring of 1998.
    Stage II construction can then continue from May 1 through 
November, 1998, the ``Good weather months'' in Minnesota.
            benefits received from the accelerated schedule
    The benefits achieved by the modified schedule are significant for 
the community as well as the governmental agencies supporting the 
project.
    1. The citizens of Marshall and their property will be protected 
from the severe flooding that continues to threaten their community in 
recent years.
    2. The modified schedule will permit the Flood Control Project and 
the C.D. No. 62 project to move along on parallel tracks, avoiding 
duplicative efforts, and providing a cost savings for both projects.
    3. The different completion dates for the two water resources 
project create a situation where the construction work on either 
project is vulnerable to the elements should a severe Spring run-off or 
heavy rains occur during the construction period. Such an event would 
result in certain project delays and additional project costs.
    4. The real estate and easement acquisitions will move much more 
quickly, efficiently, less costly, since there is some overlap in the 
flood control project and the Ditch 62 project.
    For these reasons, we respectfully request this Subcommittee to 
provide $750,000 of Federal funds in the fiscal year 1998 
Appropriations Act to initiate the work required under Stage II of the 
Marshall Flood Control Project. Thank you for the opportunity to bring 
this critical matter to your attention through this statement. I will 
be delighted to respond to any questions you may have about the project
                              Attachment 1
                         redwood drainage basin
    The Watershed.--The movement of water in the Marshall area has had 
a strong influence on its residents. To understand the hydrology of the 
area we must look back tens of thousands of years ago to the last 
period of glaciation. Carrying massive amounts of rock and debris, ice 
over a mile thick inched its way across Minnesota. Stopping in 
southwest Minnesota, it dropped in the process of melting a ridge of 
debris up to 600 feet thick. This geologic formation, a moraine called 
Buffalo Ridge for the great herds that once roamed its slopes, 
stretches northwest to southeast about 35 miles southwest of Marshall. 
Glacial melt waters, flowing to the northeast, carved ravines and 
waterways in which streams still flow towards Marshall. One of these 
streams, the Redwood River, falls 635 feet on its forty mile trip from 
Pipestone County to Marshall, but then only falls 38 feet as it travels 
38 miles to Redwood Falls. At Marshall, the base of the ridge, waters 
slow depositing soil. This alluvial terrace (water deposited soil) 
creates a natural flood plain between the rushing upstream waters and 
the slower downstream segment. Catastrophic flooding occurs in this 
region as witnessed in 1927, 1957, 1969 and 1993.
                              Attachment 2
                      letter from arne h. carlson
                                        State of Minnesota,
                                  Saint Paul, MN, February 24 1997.
Senator Arlene J. Lesewski,
131 State Office Building,
St. Paul, MN.
Representative Marry Seifert,
213 State Office Building,
St. Paul, MN.
    Dear Senator Lesewski and Representative Seifert: I am writing to 
let you know that we will recommend funding of $376,000 for the 
Marshall Flood Control project in the Supplemental Executive Budget. I 
appreciate your efforts to bring this important project to the 
attention of this Administration.
    With a history of past flooding, it is clear that the Marshall 
Flood Control project needs to be completed as soon as possible. I hope 
that you will continue to work to support this initiative as it moves 
through the legislative process, and know that the Department of 
Natural Resources will be providing the necessary assistance.
    Thank you again for your hard work on behalf of this important 
initiative.
            Warmest regards,
                                           Arne H. Carlson,
                                                          Governor.
                                 ______
                                 
Prepared Statement of the Iowa Department of Natural Resources, Kansas 
Department of Wildlife and Parks, Missouri Department of Conservation, 
                      and Nebraska Game and Parks
    Regarding the Missouri River Bank Stabilization and Navigation, 
Fish and Wildlife Mitigation Project
  --A request for $10 million is being made for fiscal year 1998 to the 
        U.S. Army Corps of Engineers
  --The Corps of Engineers included $3.9 million in its budget for 
        fiscal year 1998, while $10.2 million of project work is ready 
        for implementation
  --Provides for construction of projects and acquisition of land to 
        restore and enhance habitats in the states of Iowa, Kansas, 
        Missouri, and Nebraska that were degraded as a result of the 
        Missouri River Bank Stabilization and Navigation Project
  --Provides more opportunities and improved quality of experience for 
        people in the four states that hunt, fish, hike, and enjoy the 
        outdoors through various other recreational pursuits
  --Reduced funding will result in the retraction of land acquisition 
        agreements that have been successfully negotiated and the delay 
        of construction projects that have approved designs and 
        specifications
  --Current authorization levels mitigate for 2 percent of the aquatic 
        and 7 percent of the terrestrial losses; less funding equates 
        to even less compensation for losses
  --Projects do not conflict with other uses of the Missouri River and 
        do not have public opposition
Background
    Seven acts of Congress provided for the construction and 
maintenance of a navigation channel and bank stabilization works on the 
Missouri River. The most important of these Acts were passed in 1912, 
1925, 1927, and 1945 (Public Laws 62-241, 68-585, 70-560, and 79-14) 
respectively. The Missouri River Bank Stabilization and Navigation 
Project was conceived and designed for its stated purposes in an era of 
little recognition of the values of fish and wildlife resources. As a 
result, the natural features of the Missouri River were devastated. The 
project shortened the lower Missouri River by 127 miles.
    In response to the habitat degradation, Section 601 (a) of the 
Water Resource Development Act of 1986 (Public Law 99-662) authorized 
the Missouri River Fish and Wildlife Mitigation Project within the 
states of Missouri, Kansas, Iowa, and Nebraska. This authorization was 
based upon a report of the Chief of Engineers, dated April 24, 1984, 
entitled Missouri River Fish and Wildlife Mitigation, Iowa, Nebraska, 
Kansas, and Missouri. The Chief's report was based on a May 1981 
Feasibility Report and Environmental Impact Statement (EIS) by the 
Missouri River Division, U.S. Army Corps of Engineers (CEMRD) which: 
(1) described the historical fish and wildlife habitat losses and those 
likely to occur due to the Missouri River Bank Stabilization and 
Navigation Project, (2) described various measures to mitigate for 
these losses, and (3) recommended a plan to restore, preserve, or 
develop 48,100 acres of habitat. These acres represent only 2 percent 
of the aquatic habitat loss, and 7 percent of the terrestrial losses. 
The U.S. Fish and Wildlife Service and the states of Iowa, Nebraska, 
Kansas, and Missouri made up the Coordination Team that was developed 
(as outlined in the Fish and Wildlife Coordination Act of 1958) to 
formulate and decide acquisition and development sites with the Corps. 
It was established that 48,100 acres (18,200 acres on public lands and 
29,900 acres on lands to be acquired) would be developed within the 
four states at ratios comparable to the habitat types lost. This level 
of mitigation has always been considered by the states to be a good 
start to what is ultimately needed. Continuing authority will 
eventually be required to achieve total mitigation.
What Progress Has Been Made?
    To date 17,634 acres have been acquired, 59 percent of the 29,900 
acres authorized. There have been 14,641 acres of aquatic and 
terrestrial habitat developed, which is 30 percent of the 48,100 acres 
authorized for development. Some restoration has been completed in all 
four states. This progress has primarily occurred in the last 3 years 
and it is vital to maintain this momentum.
What Benefits Are Provided By This Project?
    Mitigation projects benefit fish, wildlife, and people. Big river 
fish species, waterfowl, other birds, mammals, reptiles and amphibians 
are all benefiting through additional improved habitat. The completed 
sites are revegetating and returning to pre-channelization conditions, 
thus attracting fish for spawning and rearing. People are realizing 
that this restored habitat is providing places not only to hunt and 
fish, but to hike, enjoy nature, bird watch, and enjoy the Missouri 
River. Mitigation projects are bringing back hunting and fishing 
opportunities that have been lost in areas that in the past provided 
bountiful harvests.
    Channelization and induced floodplain developments have reduced the 
natural flood carrying capacity of the Missouri River causing 
additional flooding and it has increased the flood stages in the 
receiving Mississippi River. This has led, in turn, to increased 
pressure to construct more downstream levees and other single purpose 
flood control projects. By restoring portions of the floodplain through 
fish and wildlife mitigation, we are providing storage areas for flood 
waters and reducing local flood damages.
    Fish and wildlife mitigation projects are not adversely impacting 
other uses of the Missouri River such as navigation, flood protection, 
and municipal water supplies. We are not aware of any public opposition 
to fish and wildlife mitigation. In other words, these projects would 
provide a wide array of benefits without significant effects on 
existing uses of the River.
What Appropriations Are Necessary?
    The U.S. Corps of Engineers requested $1.1 million for fiscal year 
1997. Congress increased that appropriation to $3.1 million. The Corps 
is requesting $3.9 million for fiscal year 1998. They have estimated 
their spending capability for fiscal year 1998 to be $10.2 million. We 
would like to see the fiscal year 1998 and following budgets for the 
Missouri River Bank Stabilization and Navigation Fish and Wildlife 
Mitigation Project be set at $10 million per year to complete the 
project in a timely manner. The sharp budget cut in fiscal year 1997 
and projected fiscal year 1998 budget will make it very difficult to 
keep this program on schedule. Even at $10 million per year, it will be 
at least 2002 before the project is completed. It was envisioned that 
the project would be completed in 2000, but the Corps is now projecting 
a completion date of 2006. The fiscal year 1994 appropriation for the 
Missouri River Fish and Wildlife Mitigation Project was $7.5 million, 
the fiscal year 1995 was $8.1 million, and fiscal year 1996 was $8.4 
million. These three years of funding resulted in individual project 
components being completed and, just as important, established momentum 
for the overall mitigation project. Last year's appropriation of $1.1 
million and this year's projected budget of $3.9 million will destroy 
the momentum that has taken so long to build.
    The Corps has indicated they will not have sufficient funds to 
acquire land already negotiated to purchase and they have contractors 
available to construct projects that have been engineered and designed. 
The Corps has stated that ``Funding for fiscal year 1998 is for 
continuing construction for the Missouri River Mitigation Project. 
Because the funds for fiscal year 1998 are very uncertain it is 
unlikely there will be funding available for any large construction 
contracts or real estate acquisitions. Work will likely be restricted 
to completing planning documents at several sites as well as monitoring 
the completed sites.''
    Previous appropriations for planning, engineering, design and 
construction have been well spent. The current authorization under the 
1986 Water Resources Development Act is $81.4 million (1996 dollars), 
of which $28.5 million has been expended. This indicates the project is 
only 35 percent complete and falling behind schedule rapidly because of 
cuts in the yearly appropriations and inflation. We are concerned that 
future appropriation cuts and inflation will only serve to delay and 
ultimately accommodate a less than successful mitigation project.
                                 ______
                                 
  Prepared Statement of the Upper Mississippi River Basin Association
Upper Mississippi River System Environmental Management Program [CG 
        Budget--$19.455 million]
    Provides for construction of projects to restore and enhance 
degraded habitats and supports long term monitoring.
    Less than full funding would disrupt on-going construction 
schedules and entirely eliminate construction of five projects.
    Annual appropriations and program time frame are capped.
    Non-construction component (monitoring) has limited budgetary 
flexibility.
    Evaluation of program is underway and will yield recommendations to 
Congress.
    Balance needed between navigation and environmental investments.
Upper Mississippi and Illinois Navigation Study [GI Budget--$7.7 
        million]
    Evaluates need for expansion of navigation capacity.
    Study plan recently revised.
    Congressionally-imposed study deadline.
Upper Mississippi River System Flood Profile Study [GI Budget--$1.957 
        million]
    Existing flood profiles developed in 1979 need revision.
    Additional data and improved modeling methodologies now exist.
    Flood profiles are needed for flood insurance, floodplain 
management, and the design of flood control projects.
Up-Front Funding Policy
    Limits number of new construction starts and funding available for 
on-going projects.
    Decreases flexibility.
                               background
    The Upper Mississippi River Basin Association is the organization 
created 16 years ago by the Governors of the states of Illinois, Iowa, 
Minnesota, Missouri, and Wisconsin to serve as a forum for coordinating 
river-related state programs and policies and for collaborating with 
federal agencies on regional issues. As such, the Association works 
closely with the Corps of Engineers on a variety of programs for which 
they have responsibility. Of particular concern to the basin states are 
three Corps programs: the Environmental Management Program, the Upper 
Mississippi navigation study, and the flood profile study.
                    environmental management program
    The Upper Mississippi River System Environmental Management Program 
(EMP) was authorized in the 1986 Water Resources Development Act in 
response to the need for both restoring lost and degraded habitat and 
improving scientific understanding of the river system. What was at 
first a novel new approach to interagency environmental management, has 
now become a widely recognized and respected regional program.
    The EMP consists of two primary components: the construction of 
individual projects to rehabilitate or enhance critical habitat areas 
and a long term monitoring program to track the environmental health of 
the system. Each of the habitat projects (varying in size and ranging 
in cost from about $200,000 to $7 million) employs different types of 
techniques, including such measures as selective dredging to remove 
sediment, island creation, water level control features, and side 
channel closures or openings. The long term monitoring program consists 
of six field stations throughout the river system which routinely 
collect standardized data on water, sediment, fish, and vegetation at 
over 150 sites. In addition, the monitoring program headquarters at the 
Environmental Management Technical Center is home to a multi-
disciplinary team of scientists who are interpreting and displaying the 
data in ways that will be useful for management decisions.
    The unique character of the EMP is, in part, a function of its 
partnership design. While the Corps of Engineers is the lead agency, 
the U.S. Fish and Wildlife Service, U.S. Geological Survey, and five 
basin states all have specific roles to play in planning, designing, 
evaluating, and operating and maintaining the habitat projects, as well 
as conducting the data collection and analysis that is part of the long 
term monitoring program.
    Fiscal year 1998 marks the second year in a row that the 
President's budget request includes less than the full authorized 
funding of $19.455 million for the EMP. Last year, the Administration 
recommended only $15.7 million and this year the request has dropped 
even further, to $14 million. In fiscal year 1997, Congress included an 
additional $1 million for the EMP and we are hopeful that Congress will 
again affirm its support for this important program by providing full 
funding for the EMP.
    The proposed budget reductions for the EMP are of grave concern to 
the basin states for a variety of reasons:
  --The EMP partner agencies have initiated a comprehensive evaluation 
        of the EMP which will be used to formulate a ``Report to 
        Congress.'' In the 1986 authorizing legislation, Congress 
        directed that such a report be submitted prior to the end of 
        the authorization period (i.e., 2002). That report is to 
        evaluate the program's strengths and weaknesses and include 
        recommendations regarding whether the EMP should be terminated, 
        continued, or modified. While the EMP authorization does not 
        expire for another four years, it is generally agreed that such 
        a report would be particularly useful now.
      More specifically, over the past eleven years numerous 
        advancements have been made in the art and science of 
        environmental restoration and we have gained considerable 
        experience through the EMP in understanding both the 
        opportunities and limitations of existing techniques and 
        programs. We should utilize that experience to shape improved 
        strategies for environmental restoration including changes to 
        the EMP itself.
      It would be particularly unfortunate and ironic if the EMP were 
        to face funding cutbacks at a time when an effort is underway 
        to assess its effectiveness and make recommendations regarding 
        its future. If funding cuts continue to weaken the program, 
        Congress may have limited options for designing a ``second 
        generation'' EMP authorization.
  --Unlike most other Corps projects, the EMP is ``capped'' by its 
        Congressional authorization both in terms of annual 
        appropriations and overall time frame. Therefore annual funding 
        decisions have a far greater impact on whether the program is 
        ultimately able to accomplish its goals. No other Corps program 
        or project of which we are aware is constrained by this unique 
        synergistic combination of time and financial limitations.
      In the first four years of its authorization (1988-1991), the EMP 
        suffered from funding shortfalls of more than $30 million below 
        authorized levels. The annual cap on appropriations makes it 
        impossible to ``recapture'' this shortfall.
  --Funding reductions in the closing few years of the current EMP 
        authorization period will have a particularly debilitating 
        effect on the program. Habitat projects for which planning and 
        design have been initiated will not be able to proceed to 
        construction, thus negating the investment which has already 
        been made in these projects. The fiscal year 1998 budget of $14 
        million will support the continuing construction of 8 projects, 
        the completion of 4 projects, and continuing design of 7 
        projects. However, it is currently estimated that 7 projects 
        will experience construction delays. Even more importantly, the 
        construction of 5 projects will have to be abandoned entirely.
  --The success of the Long Term Resource Monitoring (LTRM) component 
        of the EMP is dependent, in part, upon relatively reliable and 
        constant funding levels. As a non-construction element of the 
        EMP which supports teams of scientific and field personnel, the 
        LTRM is particularly sensitive to annual funding variances. In 
        this regard, the LTRM is unique within the Corps' construction 
        general account, where there is typically more flexibility to 
        respond to annual budgetary fluctuations.
  --The economic and ecological health of the Upper Mississippi River 
        are inexorably linked. Congress recognized this fact when, in 
        1986, it declared this river system to be ``a nationally 
        significant ecosystem and a nationally significant commercial 
        navigation system.'' Yet funding cuts for the EMP are widening 
        the already large discrepancy between federal investment in 
        these two major river purposes. In fiscal year 1998, the Corps 
        of Engineers will invest over $130 million in operation and 
        maintenance of the Upper Mississippi River System for 
        commercial navigation purposes. Another $27 million is 
        scheduled for major rehabilitation of aging locks and dams. 
        Though some of these investments have incidental environmental 
        benefits, full funding ($19.455 million) for the EMP is 
        critical if the federal commitment to multi-purpose management 
        is to be maintained.
                            navigation study
    In 1993 the Corps of Engineers initiated a feasibility study of 
navigation capacity expansion on the Upper Mississippi River and 
Illinois Waterway, a transportation system that is vitally important to 
the Midwest and the nation in linking agricultural commodities to 
international markets. The states in the region have been providing 
advice and counsel to the Corps throughout the study via a special 
``liaison committee'' comprised of gubernatorial appointees from each 
of the five basin states. The results of this study will be critical to 
our ability to make reasoned decisions about the future of the Upper 
Mississippi navigation system. Given that the merits of future multi-
billion dollar investments will be judged based upon this study, the 
states of the basin are deeply concerned that the study include 
adequate and timely data and analysis. Thus, the states urge that the 
study be funded to the Corps' maximum ability to execute in fiscal year 
1998, which we understand to be $7.7 million. The following points are 
worthy of note:
  --The Corps of Engineers recently revised its Project Study Plan 
        (PSP) for the navigation study. These revisions were necessary 
        to accommodate a variety of changes made since the original 
        study plan was published in 1994. In particular, changes to the 
        scope of the environmental studies, the addition of a regional 
        economic analysis, and increased emphasis on assessment of 
        small scale measures are all adjustments which the five basin 
        states strongly supported. It is our understanding that the 
        fiscal year 1998 budget request of $7.7 million reflects the 
        revised study plan and is thus endorsed by the states.
  --Fiscal year 1998 funding of $7.7 million will, among other things, 
        support a number of study efforts of particular interest to the 
        states. The streambank erosion study; plant, fish, and mussel 
        impact studies; and the math modeling component of the 
        environmental studies will continue. In addition, the economic 
        analysis will focus on relative modal cost shifts and regional 
        economic development analysis. Completion of these components 
        of the study is critical, given that plan formulation 
        activities are scheduled to begin in earnest in fiscal year 
        1998.
  --In the conference committee report for the fiscal year 1996 Energy 
        and Water Development Appropriations bill, Congress directed 
        the Corps to complete the Upper Mississippi navigation study by 
        1999. It will be impossible to meet this deadline, without 
        sacrificing components of the study which the Corps has judged 
        to be essential for NEPA compliance, unless adequate funding is 
        provided in a timely manner.
           upper mississippi river system flood profile study
    Flood frequency profiles for the Upper Mississippi River System are 
badly in need of revision. The flood profiles currently in use were 
developed in 1979 by an interagency task force of the Upper Mississippi 
River Basin Commission then in existence. The 1979 flood profiles 
replaced profiles that had been adopted in 1966. There are a variety of 
factors that suggest the 1979 profiles need to be updated:
  --The 1979 flood profiles are generally lower than the earlier 1966 
        profiles. In the southern reaches of the Rock Island District, 
        the difference is as much as five feet. For example, the 1979 
        flood frequencies show that in the short time frame of 29 
        years, a ``100 year'' flood, a ``200 year'' flood, and a ``500 
        year'' flood have occurred in the city of Hannibal, Missouri. 
        This has caused many communities along the Upper Mississippi 
        River to question whether the 1979 methodology and resulting 
        profiles are accurate.
  --There are now nearly 20 years of additional data available, 
        including flow records from several high water events like the 
        Great Flood of 1993. In addition, the Corps now has the 
        capability to model the complex hydraulics of the Upper 
        Mississippi River more accurately than it did with earlier 
        methodologies. In particular, following the 1993 floods, the 
        Corps developed a mathematical hydraulic model (UNET) to answer 
        ``what if'' questions such as the impact of levee failures or 
        reservoir operations on stages of the Mississippi River. That 
        model is now essentially complete and will allow computation of 
        water surface profiles. In fact, when the interagency task 
        force developed the 1979 flood profiles, the need for future 
        revisions was recognized and the original agreement states that 
        the flood flow frequencies should be revisited as additional 
        data and math models become available.
  --Flood elevation profiles have a variety of uses including flood 
        insurance; floodplain management; and the study, design, and 
        construction of flood control projects. The need for updated 
        math models and flood profiles has been widely recognized, 
        especially since the Great Flood of 1993. The ``Galloway 
        Report'' which the Clinton Administration commissioned 
        following the 1993 Midwest floods, recommended that the 
        methodology used for flow-frequency analysis be reassessed. 
        Similarly, the Flood Plain Management Assessment published by 
        the Corps in June 1995 recommended that hydrology and 
        hydraulics data be updated, including water surface profiles. 
        The five states of the Upper Mississippi River Basin have been 
        strong supporters of these recommendations.
    The Corps of Engineers has reprogrammed approximately $350,000 of 
fiscal year 1997 funding to begin developing a scope of work for the 
proposed flood profile study. It is our understanding that the fiscal 
year 1998 budget request of $1.957 million will be used to complete the 
scoping process and then initiate the study itself. The basin states 
strongly endorse appropriation of funds for the flood profile study in 
fiscal year 1998.
                    up-front funding for new starts
    The Administration's fiscal year 1998 budget request reflects a new 
policy for funding new construction starts. Rather than scheduling 
annual incremental funding, new starts are fully funded up-front. The 
stated reason for this policy shift is to enhance the efficiency of 
managing construction schedules and to assure nonfederal cost-share 
partners of the federal government's commitment to the project. Both of 
these purposes are commendable.
    However, the consequences of the policy are of concern to the 
states. In particular, at a time when budgetary resources are becoming 
increasingly limited, an up-front funding policy locks up those scarce 
resources on projects which cannot utilize all the funds allocated to 
them in their first year. It also has the effect of limiting the amount 
available for on-going projects as well as the number of new 
construction starts. In addition, it limits the flexibility which is 
important in managing both individual projects and multi-project 
construction budgets.
    As an example, in the Upper Mississippi River Basin, the new up-
front budget policy was applied to the major rehabilitation 
construction work that is to begin on Lock and Dam 3 in fiscal year 
1998. While $12.4 million is included for that project, it is our 
understanding that only $800,000 of work is expected to be executed in 
fiscal year 1998. Because it is a major rehabilitation project, 50 
percent of the funding is provided by the Inland Waterway Trust Fund 
and there is no local sponsor.
    While the states of this region are supportive of the 
rehabilitation work that needs to be done at Lock and Dam 3 to maintain 
the physical integrity of that aging structure, it should be noted that 
the up-front funding policy has the effect of decreasing funds 
available for other worthy projects in the region. In particular, as 
previously described, the fiscal year 1998 budget includes only $14 
million, rather than the fully authorized funding of $19.455 million, 
for the on-going Environmental Management Program (EMP).
                                 ______
                                 
Prepared Statement of Joseph W. Harrington, Mayor, City of Valley Park, 
                            Valley Park, MO
    As Mayor of a city containing over 6,000 residents, and as the 
former president of the local school board, I can give first-hand 
witness to the terrible devastation that past flooding has wrought upon 
this community. The Valley Park levee, now in its third full year of 
construction, will provide complete relief from these disasters.
    I urge you to continue your support by funding the Army Corps of 
Engineers' appropriations request for fiscal year 1997. This will 
insure the economic well being of the community and provide an 
incentive for our families and their children to stay and thrive in 
this established community.
    Thank you for your past support and your anticipated future support 
of this worthwhile flood control project.
                                 ______
                                 
Letter From Dennis R. Lea, Superintendent, Valley Park School District, 
                            Valley Park, MO
                               Valley Park School District,
                                   Valley Park, MO, March 20, 1997.
Senator Pete V. Domenici,
Chairman, Subcommittee on Energy and Water Development, Committee on 
        Appropriations
Washington, DC.
    Dear Senator Domenici: This letter is in reference to the Valley 
Park Levee Project currently being reviewed by the Appropriations 
Subcommittees. The Valley Park School District supports wholeheartedly 
the efforts of the City of Valley Park in requesting continued funding 
of the levee project.
    Several years ago, the school district decided to support the levee 
project financially through participation in a tax increment finance 
district. It is estimated that the school district alone will 
contribute $4 million to the levee project. We believe the project is 
one of the most significant activities that could be undertaken to 
improve the quality of life and overall opportunities for our 
community.
    It was just a short three years ago this spring that our community, 
including our total school campus, was completely under water from the 
flooding of the Meramec River. Discounting the devastation to the 
community at large, school district facilities suffered $2.3 million of 
damage and the loss of sixteen regularly scheduled attendance days for 
our students.
    We sincerely hope you will continue your efforts to financially 
assist our community in its endeavor to provide a safe and secure 
environment for its children.
            Sincerely,
                                             Dennis R. Lea,
                                                    Superintendent.
                                 ______
                                 
 Prepared Statement of Christopher J. Brescia, President, Midwest Area 
                          River Coalition 2000
    Mr. Chairman and Members of the Subcommittee, I am Christopher 
Brescia, President of the Midwest Area River Coalition 2000 (MARC 
2000), based in St. Louis, Missouri. Thank you for the opportunity to 
submit our views on certain portions of the U.S. Army Corps of 
Engineers' program for fiscal year 1998.
    Our testimony expresses support for the items presented in the 
President's fiscal year 1998 funding requests identified in this 
testimony. MARC 2000 opposes the introduction of full funding/advanced 
appropriations concept to the Corps' budget. Rather, we support the 
traditional incremental funding process utilized since 1922. In 
addition, we support raising the overall allocation for the Corps of 
Engineers to the $3.994 Billion level in order to meet pressing 
infrastructure demands around the nation.
    MARC 2000 represents members who generate over $125 Billion in 
economic activity from the Midwest and conservatively employ or self-
employ more than 150,000 people in 21 states. We reach from Minnesota 
to Louisiana on the Mississippi River, from Chicago to St. Louis on the 
Illinois Waterway and from Sioux City to St. Louis on the Missouri 
River. MARC 2000 continues to grow aggressively in the region bringing 
a river-based international competitiveness and economic development 
message to the public's attention.
    Under the following funding categories, MARC 2000 supports these 
individual funding requests included in the President's budget. 
However, as already indicated we urgently support overall increased 
funding for the Corps of Engineers. Some of the funding increases 
requested by MARC 2000 could be funded with elimination of the advanced 
appropriations/full funding concept (e.g. Major Rehabilitation). Other 
funding increases would be appropriate with an overall budget 
allocation increase to the Energy and Water Development Subcommittee.
                         general investigations
    MARC 2000 urges support and priority under General Investigations 
for funding of the six-year Upper Mississippi/Illinois Waterway 
Navigation Feasibility Study at the President's requested level of $7.7 
M and for the St. Louis Harbor study at the $.5 M level.
                         construction, general
    Under construction general, MARC 2000 supports the President's 
request and additional funding support for the following projects:

                        [In millions of dollars]                        
------------------------------------------------------------------------
                                                      Fiscal            
                                                    year 1998   Increase
                                                      budget   requested
------------------------------------------------------------------------
Melvin Price Lock and Dam, IL & MO................      1.900        1.2
Mississippi River Regulatory Works................      3.460        2.5
------------------------------------------------------------------------

                          major rehabilitation
    The Major Rehabilitation program is critical to the Upper 
Mississippi and Illinois Rivers continued future functioning. MARC 2000 
supports the following programs:

                        [In millions of dollars]                        
------------------------------------------------------------------------
                                                      Fiscal            
                                                    year 1998   Increase
                                                      budget   requested
------------------------------------------------------------------------
Lock and Dam 24, Mississippi River, IL & MO.......      4.370       1.0 
Lock and Dam 25, Mississippi River, IL & MO.......      4.230  .........
Lock and Dam 14, Mississippi River, IA............      6.600       2.7 
Lock and Dam 3, Mississippi River, MN (New Start).     12.400  \1\ (11.2
                                                                       )
------------------------------------------------------------------------
\1\ The St. Paul District does not have the capability to expend $12.4  
  Million on this new start. However, under the Administration's        
  Advanced/Full Appropriations scheme, funds are made available in the  
  fiscal year 1998 budget that could be expended under incremental      
  appropriations at other projects in the Upper Mississippi Basin. This 
  scenario assumes that the overall allocation levels will remain under 
  incremental funding. There is a total of $19.2 Million in combined    
  Construction General and Major Rehabilitation needs for which these   
  funds could be utilized, leaving a balance of $7.6 Million to be      
  allocated if the overall allocation levels can be increased to the    
  $3.994 Billion level.                                                 

                       operation and maintenance
    The continued operation and maintenance of the Upper Mississippi, 
Illinois and Missouri Rivers support almost 100 million tons of 
commodities annually. The movement of these products on the river 
system in our region supports over 400,000 full and part-time jobs, 
accounts for over $4 Billion in income to residents and generates 
between $11-$14 Billion in business revenue annually. MARC 2000 
supports a level of funding that will permit this region to operate the 
system efficiently and in anticipation of growing demand especially 
from the agricultural sector. Our organization urges support at the 
following funding levels necessary for baseline and non-deferrable 
functions:

                        [In millions of dollars]                        
------------------------------------------------------------------------
                                                      Fiscal            
                                                    year 1998   Increase
                                                      budget   requested
------------------------------------------------------------------------
Mississippi River (LMVD Portion)..................     10.535      2.980
Mississippi River (NCD Portion)...................     81.363     10.335
Mississippi River (Cairo-MO River, Reg. Works)....     14.839      2.810
Illinois Waterway (LMVD Portion)..................      1.310  .........
Illinois Waterway (NCD Portion)...................     22.738       .263
Kaskaskia River Navigation........................      1.430       .350
Missouri River--Sioux City to Mouth...............      6.496       .807
------------------------------------------------------------------------

                       environmental stewardship
    Over the last year, MARC 2000 has encouraged and participated in a 
collaborative process in the region to identify key environmental 
concerns and means by which to address those concerns. The Upper 
Mississippi River Summit dialogue has identified a range of projects 
endorsed by key stakeholder groups, many that might require funding 
from the U.S. Army Corps of Engineers and other federal and state 
agencies. Attached to this testimony is a copy of the Vision statement 
signed and endorsed by 84 individuals and organizations. We would be 
pleased to have the Subcommittee address the means by which these 
initiatives could become a reality.
    Meanwhile, the President's budget requests $14 million for the 
Environmental Management Program (EMP) in our region. MARC 2000 
supports funding of environmental stewardship needs for the Upper 
Mississippi, Illinois and Missouri Rivers, but urges Congress to assess 
this and other environmental funding requests according to key 
investment criteria. First, how does this program and other efforts on 
the Upper Mississippi River fit into an overall systems needs 
assessment? It is unclear that such an assessment has ever been 
conducted. Second, are these funds addressing priority concerns in the 
most cost-effective fashion? Finally, what has been the overall return 
on investment for this program? A report seeking re-authorization of 
this program is expected to be completed this year and forwarded to 
Congress for review. MARC 2000 will be pleased to address the substance 
of this report at that time.
                               conclusion
    The infrastructure needs of the Upper Mississippi Region are 
significant. MARC 2000 supports an increase in the allocation for the 
U.S. Army Corps of Engineers and reallocation of advanced/fully 
appropriated funds to fund priority projects in our region. The return 
on these type of investments have been repeatedly proven over the 
years. The consequences of not reversing a declining trend will be 
increased failures in the system due to inadequate maintenance and 
untimely modernization of the Upper Mississippi region that will 
counter the significant achievements in multilateral market access and 
opportunities for agricultural exports to the world market. We thank 
the Subcommittee for supporting these projects in the past and urge 
full consideration for the funding requests outlined in this 
presentation.
                        Attachment to MARC 2000
          vision statement ii--upper mississippi river summit
    Vision for the Upper Mississippi River.--To seek long term 
compatibility of the economic use and ecological integrity of the Upper 
Mississippi River.
    Objective of summit meeting.----To seek commitment to develop a 
multi-interest strategy for managing the Upper Mississippi River.
    Whereas:
    (1) The Upper Mississippi River is for purposes of this document 
defined as the main stem of the Mississippi River from Minneapolis, 
Minnesota, to Cairo, Illinois, recognizing main stem impacts from 
measures taken throughout the entire 714,000-square mile watershed;
    (2) The Upper Mississippi River is a multi-purpose resource 
recognized by Congress as both a ``nationally significant ecosystem and 
a nationally significant commercial navigation system'' (Section 1103 
of 1986 Water Resources Development Act);
    (3) The Upper Mississippi River is important for economic and non-
economic uses;
    (4) The initial Summit Meeting in February 1996 focused on 
identifying natural resource issues of the Upper Mississippi River, we 
now need to consider how to make identifiable projects a reality and 
integrate economic issues into established objectives.
    Therefore: We are committed to:
    (1) Collaboratively address Upper Mississippi River needs;
    (2) Identify and prioritize issue and geographic areas in which 
cooperative action is most likely;
    (3) Seek ways to remove obstacles to cooperative action within 
existing programs and authorities;
    (4) Seek funds and/or new authorities, as appropriate for the 
following:
  --Enhanced pool management in pools 8, 13, 24, 25, & 26, identify 
        other opportunities for pool management, including the Illinois 
        River, and engage all identifiable stakeholders;
  --A needs assessment to identify measures for flood damage reduction 
        and enhancement of flood plain habitat to include among others, 
        the U.S. Army Corps of Engineers and the U.S. Department of the 
        Interior;
  --One floodplain habitat project in each state through voluntary 
        means and request up to 60,000 acres of NRCS wetland reserve 
        easements;
  --USDA policies which promote flood-resistant economic uses of the 
        floodplain, a workshop on alternative floodplain land uses, and 
        a pilot project;
  --Innovative river training structures in pools 8, 13, 16 and side 
        channels on middle Mississippi, monitor project performance and 
        use data to predict future benefits;
  --Economically viable and ecologically sound land and water 
        management practices which improve water quality, and biotic 
        resources exploration of their regional applicability and 
        encouragement of voluntary adoption by individuals and 
        communities;
  --An evaluation of the current and future physical structure of the 
        river floodplain under current management practices and the 
        development of models to achieve a greater understanding of the 
        economic and ecological interrelationships of management 
        alternatives;
  --Measurable ecologically-based natural resource objectives for 
        selected river reaches; and,
  --A web site to share information.
  --A comprehensive analysis of the region that describes the total 
        economic values (including commercial, recreational and other 
        natural resource-based values) derived from the river.
    (5) Seek means of addressing economic concerns identified at 
February 1997 Summit Meeting though established teams;
    (6) Convene again in approximately one year to review progress and 
reevaluate strategies, with a progress report in six months.
                                 ______
                                 
 Prepared Statement of Charles E. Owsley, President, Missouri-Arkansas 
                        River Basins Association
    Following is the list of projects with the money requested for the 
1998 budget. They are endorsed by our delegation of volunteers from the 
Missouri-Arkansas Association. We ask your serious consideration in 
budget development for fiscal year 1998 Budget.

Estimated Fiscal Year 1998 Appropriation

Blue River Channel, Kansas City, Missouri--Start 
    Construction Stage 3. Complete Construction by 2002.     $19,700,000
Turkey Creek, Kansas City, Kansas and Missouri--Complete 
    Design for a 1998 Construction start. Slow! Sponsors 
    may precede Corps project w/relief project from 
    their own funds to prevent further flooding, w/
    credit for their Project costs......................         290,000
Missouri River Levee System:
    Restudy all levees for 100/500 year protection......         830,000
    Unit L-385--Revise plans (Quindaro Bend)--Local 
      sponsor funding plan is approved. ROW required by 
      sponsor, pending CMA approval.....................         120,000
    Unit L-142--Begin Design (Jeff City)--Studies for 
      reduced scope since Cedar City buyout.............         550,000
Blue River Basin, Kansas City, Missouri--Complete pre-
    construction engineering and design.................         750,000
Swope Park Industrial Area, Kansas City, Missouri--PMP 
    to be developed, begin feasibility study............         180,000
                    --------------------------------------------------------
                    ____________________________________________________
      Total.............................................      22,420,000

    The list has been prepared in order of priority, as supported by 
our Board. Local sponsors will make separate statements for their most 
serious and pressing needs. Thank you for the opportunity to place this 
request on the record.
                                 ______
                                 
     Prepared Statement of Mayor Max Hogan, City of West Jordan, UT
                    west jordan water reuse project
    I appreciate the opportunity to submit testimony regarding West 
Jordan's Water Reuse Project. West Jordan is seeking $500,000 in the 
fiscal year 1998 Energy and Water Appropriation Bill, which will 
provide funding for the design and engineering portion of the project, 
and also allow the project to begin construction.
    Thanks to the efforts of our congressional delegation, the City of 
West Jordan received an authorization for our water reuse project in 
H.R. 3660, the Reclamation Recycling and Water Conservation Act of 
1996. The total cost of the water reuse project is now projected at 
$6.6 million. H.R. 3660 authorized a 25 percent federal share for the 
project, or $1.65 million.
    The City of West Jordan believes federal support for the reuse of 
recycled wastewater is critical for arid states such as Utah, who must 
find alternative water sources in a rapidly developing region. West 
Jordan is currently developing a water reuse project, and the federal 
share authorized will make the project feasible by reducing the cost of 
the water, thereby making it more competitive with other water rates in 
the Salt Lake Valley.
                   west jordan's water reuse project
    West Jordan City, located in Salt Lake County, Utah, is 
experiencing rapid growth which has led to an increasing demand for 
water. Water use in West Jordan City more than doubled from 6,611 acre-
feet in 1984 to 13,263 acre-feet in 1994. That's over a 100 percent 
increase in just ten years. This rapid growth has continued. Wells 
owned by West Jordan City currently supply about 40 percent of the 
City's total water demand, and water purchased from the Salt Lake 
County Water Conservancy District (SLCWD) supplies the balance of the 
City's water demand. To meet this significant increase in water demand, 
West Jordan City has little other alternative than to purchase more 
water from SLCWCD. Unfortunately, this is not a long range alternative 
since SLCWCD is projected to reach their committed peak flow capacity 
within the next two to three years. Without an alternative water 
source, West Jordan City, which currently purchases sixty percent of 
their water supplies from SLCWCD, will face a severe water shortage 
supply. Water conservation programs have already begun, but water 
conservation alone is insufficient to handle the burgeoning water 
demands of the Salt Lake Valley.
    To meet these anticipated water demands, West Jordan City believes 
that reclaimed water must be used as a water source for non-potable 
use. Reclaimed water is defined as properly treated municipal 
wastewater, and water reuse is defined as putting the reclaimed water 
to a beneficial use. Replacing potable water with reclaimed water for 
non-potable purposes will make additional water available for potable 
use. Reclaimed water is being used in a number of areas for 
agricultural and landscape irrigation, industrial use, groundwater 
recharge, and recreational and environmental enhancement, but has seen 
only very limited use in Utah.
    The Utah State Legislature passed legislation in 1995 allowing 
municipalities to reuse water discharged from wastewater treatment 
plants if the water originated under the water rights held by that 
municipality. Wastewater generated by West Jordan is currently treated 
at the South Valley Water Reclamation Facility (SVWRF), a regional 
wastewater treatment facility. West Jordan City could reuse their share 
of the effluent from SVWRF, once properly treated, to irrigate parks, 
golf courses, cemeteries, schools, and other open areas.
    The City will need to contract with the regional waste treatment 
facility for the purpose of reusing the effluent. The General Manager 
of the South Valley Water Reclamation Facility, John Callis, has 
indicated that SVWRF strongly supports water reuse and will cooperate 
with West Jordan's water reuse project.
                          project description
    West Jordan's water reuse project would consist of the construction 
of the facilities to treat and distribute reclaimed water for the 
irrigation of public and, possibly, private properties. Based on the 
``West Jordan City Water Reuse Feasibility Study'', conducted in 1995, 
with updated costs to 1998 dollars, the project is estimated to cost 
$6.6 million. The overall system would include piping, a main pump 
station, a booster pump station, a storage reservoir, and polishing 
filters. Reclaimed water could be pumped to the high end of the system 
throughout the day and night. During periods of irrigation, the overall 
demand would be met from both the reservoir and the pump stations. The 
main pipeline would connect the SVWRF to the storage reservoir located 
near Old Gingham Highway at Elevation 4720. The main pipeline would be 
located primarily in the railroad right-of-way and consist of 24 inch 
diameter PVC pipe. Lateral pipelines ranging from 6 inch diameter to 18 
inch diameter would connect the main pipeline to the irrigated areas.
    Pumping requirements would be met by a main pumping station at or 
near the SVWRF and a booster pump located at approximately the mid-
point of the water distribution system. The main pump station would be 
located near the outlet of the polishing filter. The overall system 
layout is shown in Appendix C. Results of the feasibility study show 
that 1 to 2 days of storage volume would be required to efficiently use 
the reclaimed water. Storage would be necessary because most irrigation 
would occur in a 7 to 8 hour period during the night, while effluent 
discharge from the SVWRF would have a tendency to be higher during 
morning and evening hours. Storage requirements for 1 to 2 days of 
operation during the period of peak demand would be 4.5 to 8.9 million 
gallons. A concrete lined, open reservoir with a total storage capacity 
of about 6 million gallons was recommended in the feasibility study.
    The filtration system is critical to the West Jordan Water Reuse 
Project, since the State Wastewater Reuse Rules require that the 
wastewater intended for Type 1 water reuse pass through a filtration 
system. Final effluent filtration is currently not in place at the 
SVWRF, so the filters would need to be constructed before Type 1 water 
reuse could be implemented. Disinfection would be required following 
filtration.
                            cost comparison
    The cost per acre-foot of reclaimed water is estimated to be $280 
or more. This is within the range of the costs of Salt Lake County 
Water Conservancy District's potable water, which costs on a weighted 
average to West Jordan City approximately $240 per acre-foot. However, 
West Jordan City has purchased water from SLCWCD at upwards of $340 per 
acre-foot. The cost per acre-foot of reclaimed water could be reduced 
by selling more reclaimed water at off-peak hours to industrial users 
or to other reuse alternatives. Grants or subsidized financing could 
significantly reduce West Jordan's cost for a water reuse project.
    West Jordan capacity for groundwater sources is limited, and cannot 
depend on the SLCWCD, which wholesales water to over half of the 
geographic area of the Salt Lake Valley, to provide additional water 
since peak capacity will be reached within three years. The SLCWCD will 
have to expand their capacity of aqueduct and treatment facilities by 
the year 2005 to meet increasing water demands in the Salt Lake Valley. 
West Jordan's water reuse project will reduce our dependency on potable 
water from the Conservancy District, and therefore reduce the need for 
expansion of their facilities. Over half of SLCWCD's capacity is 
devoted to outdoor irrigation. West Jordan's water reuse project, which 
is intended to be used to irrigate parks, golf courses, and other 
public entities, will reduce the peak loading on the SLCWCD system. For 
this reason, David Ovard, the General Manager of the SLCWCD, strongly 
supports our project.
                                summary
    West Jordan's water reuse project for irrigation of parks, 
cemeteries, and golf courses is feasible and has the support of the 
South Valley Water Reclamation Facility as well as the Salt Lake County 
Water Conservancy District. However, the estimated per acre-foot cost 
of the reclaimed water would likely be higher than water purchased from 
the Salt Lake County Water Conservancy District or supplied by West 
Jordan's wells. As a result, alternative methods of financing must be 
found in order to make the project cost-effective.
    Water reuse would become more economically feasible if options are 
utilized that lower the construction costs for the reuse system or 
increase the annual water sales without increasing the peak demand. 
While West Jordan is pursuing low cost loans with the state and federal 
government, grants are also needed to make the water reuse project 
cost-effective. For this reason, West Jordan would greatly appreciate 
the Subcommittee's support for providing $500,000 to begin the West 
Jordan Water Reuse Project in the fiscal year 1998 Energy and Water 
Appropriation Bill. West Jordan would be prepared to provide a local 
match of $1.5 million. The appropriation request of $500,000 would 
provide funding for design and engineering, as well as begin 
construction on the project. This critical grant will make our project 
cost-effective, while at the same time mitigating the need for the 
water wholesaler in the Salt Lake Valley to make costly upgrades.
    Thank you again for the opportunity to submit testimony before the 
Energy and Water Development Subcommittee regarding the West Jordan 
Water Reuse Project. I hope that the Subcommittee will see fit to 
provide $500,000 for West Jordan's project in the fiscal year 1998 
Energy and Water Appropriation Bill.
                                 ______
                                 
   Prepared Statement of Councilmember David Rail, City of Provo, UT
                      provo flood control project
    I would like to request the Subcommittee's support for providing 
$350,000 in the fiscal year 1998 Energy and Water Appropriation Bill 
for a Feasibility Study for the Flood Damage Reduction Project in 
Provo, Utah.
    From 1982 through 1984 Provo City was impacted by severe flooding 
which caused significant damage to the community. A state of emergency 
was declared in Utah County as well as Salt Lake County. The Army Corps 
of Engineers was called in at that time to construct dikes and levees. 
The Army Corps spent approximately $2 million to upgrade an existing 
dike adjacent to the Provo airport, and a new dike was constructed 
along the south side of Provo River from the Utah Lake State Park 
linking it with the airport dike. An additional dike was built along 
the north shore of Provo Bay to protect residential areas in the 
southwest section of the City. Congress specifically directed the Army 
Corps in 1983 to construct these flood control projects in Provo. 
However, Provo still spent $5 million in repairing damaged property and 
constructing emergency flood control projects, many of which were 
temporary in nature. Since Provo's annual budget at that time was only 
$15 million, providing $5 million was an enormous share for the City to 
finance. Most of the emergency flood control projects were related to 
runoff from Rock and Slate Canyons, which are part of federal lands 
owned by the U.S. Forest Service.
    As a result of this flooding disaster, Provo prepared a master plan 
which identified $30 million in flood control projects to be 
constructed, consisting of channels and pipes along with detention 
basins, inlet boxes, and related facilities. In an attempt to finance 
these improvements Provo created a Service District in 1992 that 
generates $500,000 a year for these capital improvements projects. 
However, at this rate of revenue generation it will take more than 50 
years to fund the flood projects identified in the master plan. Provo 
critically needs another source of funding to finance this flood 
control project.
    The flood control projects identified in the City's Master Plan are 
the next logical step in flood control for Provo, beyond the Utah Lake 
and Provo River Diking Project completed in cooperation with the Corps 
of Engineers in 1983 and 1984. Major elements of the capital 
improvement program are flood control projects required to handle 
snowmelt runoff from the canyons on federal lands immediately east of 
the City. Runoff from these canyons does not occur frequently, but when 
flooding does occur it can cause high flow quantities requiring large 
and expensive capital improvements. The flood control projects 
associated with canyon runoff have an estimated cost of $9 million. It 
is this portion of the flood control project for which the City of 
Provo is seeking involvement from the Army Corps of Engineers. The 
remaining $21 million in flood control improvements are considered 
local flooding problems in which the Corps has traditionally not had an 
interest. The City of Provo will finance the local flood control 
projects through the special taxing district established in 1992. As 
you can see, Provo is taking a proactive stance in preventing future 
flooding events from damaging our community. However, funding the 
entire project is beyond the local community's capabilities.
    The Corps has indicated that flooding caused by snowmelt from the 
mountains was clearly a flood control issue that should have Corps 
involvement, as opposed to a local drainage problem which would not 
fall under the Corps' jurisdiction. Major flooding events do not occur 
frequently in Provo, but when these events occur they can be massive in 
scope. A community the size of Provo, which has a population of 
approximately 90,000, cannot be expected to fund $30 million in flood 
control improvements entirely on our own. Provo has taken steps to 
largely finance flood control improvements in the City, but help is 
needed from the federal government for portions of the flooding that 
are not local in nature * * * especially since the major flooding 
events occur from lands owned by the federal government.
    The President's Budget Proposal included $350,000 for a Feasibility 
Study to continue the Provo Flood Damage Reduction Project. I 
respectfully request that the Subcommittee provide funding for this 
project in the Fiscal 1998 Energy and Water Appropriation Bill.
    Thank you again for the opportunity to submit testimony before 
Subcommittee on Energy and Water Development.
                                 ______
                                 
    Prepared Statement of Mayor Cathie Brown, City of Livermore, CA
    On behalf of the City of Livermore, I appreciate the opportunity to 
submit testimony before the Energy and Water Development Subcommittee 
regarding the Greenville Road Improvement Project located near the 
Lawrence Livermore National Laboratories in Livermore, California.
    The City of Livermore began discussions with the Lawrence Livermore 
National Laboratory several years ago to define the Federal 
responsibility for improving Greenville Road, which is a major route to 
the laboratory. The improvements consist of widening Greenville Road 
from a two-lane to a four-lane roadway, and straightening a railroad 
overcrossing. Approximately 95 percent of the traffic on Greenville 
Road originates from the DOE facilities, which have approximately 
11,000 employees.
    Both Congress and the Lawrence Livermore National Laboratory have 
provided support in the past for the DOE's role in improving 
transportation facilities in Livermore. In 1991, thanks to combined 
efforts by the Laboratory and the City, two grants totaling $2.2 
million were allocated for widening and improvement of Vasco Road, 
which is another main entrance to the DOE facility. In addition, the 
fiscal year 1992 Defense Authorization Act and the Energy and Water 
Appropriation Act provided $1.8 million towards transportation 
improvements, which was used to conduct design and engineering for the 
Greenville Road Improvement Project.
    Before Congress would provide additional support for the project, 
they directed the DOE to develop a policy regarding their 
responsibility for transportation improvements. This policy was issued 
in September 1994 and outlines the process for DOE approval of a 
specific request for transportation improvements. The local DOE 
official responsible for a DOE site must determine that a request from 
a local taxing entity conforms to the policy, and then submits the 
request to the appropriate Assistant Secretary in Washington. A 
decision could then be rendered on whether or not DOE will seek funding 
for implementing the transportation work.
    Section 3165 of the fiscal year 1997 National Defense Authorization 
Act directed DOE to include in the fiscal year 1998 Budget a request 
for funds to pay the federal portion of the cost of transportation 
improvements under the Greenville Road Improvement Project at 
Livermore, California. The DOE was directed to work with the City of 
Livermore to determine the cost of the transportation improvements.
    As a result, officials from the DOE Oakland Office and the City of 
Livermore worked together last fall to determine the federal costs for 
the transportation project. The total cost for improving Greenville 
Road is $99.5 million, and it was mutually agreed that the federal 
responsibility for the Greenville Road Improvement Project should be 
$12.6 million, which includes widening Greenville Road near the 
laboratories and improving a railroad overcrossing. This amount 
included previous federal funding provided by the Laboratory, which 
totaled $4 million. Therefore, the remaining amount of $6.8 million was 
determined to be the balance of the DOE's responsibility.
    The President's Budget Proposal included $6.8 million for the 
Greenville Road Improvement Project, and the City of Livermore is now 
requesting the Subcommittee's support for providing half of the funding 
for the project, or $3.4 million, in the fiscal year 1998 Energy and 
Water Appropriation Bill. It was determined that only half of the funds 
for the project could be spent in one fiscal year. The City of 
Livermore is working concurrently with the National Security Committee 
to ensure that this project is authorized in the fiscal year 1998 
Defense Authorization Bill.
    Last November, the Livermore City Council approved a resolution 
stating that the City will consider the funding from the DOE of $6.8 
million as payment in full for DOE's portion of all future City road 
improvements in and around the vicinity of the Lawrence Livermore 
National Laboratory and Sandia National Laboratory.
    I appreciate the opportunity to submit testimony regarding the 
Greenville Road Improvement Project, and hope that the Subcommittee 
will support funding the project at a level of $3.4 million in the 
fiscal year 1998 Energy and Water Appropriation Bill.
                                 ______
                                 
 Prepared Statement of Charles E. Owsley, P.E., City Engineer, Public 
                   Works Department, Kansas City, MO
    The City of Kansas City, Missouri welcomes the opportunity to 
provide written testimony to the Subcommittee on Energy and Water 
Development regarding appropriations for fiscal year 1998. Herein we 
discuss our major flood mitigation projects which are supported by 
federal funding and, when complete, will provide substantially 
increased levels of flood protection. All of these projects are 
essential to the sustainment and revitalization of prominent and long 
standing commercial, business and industrial communities in Kansas 
City.
    We presently have four major flood mitigation projects underway. 
These consist of the Blue River Channel, Blue River Basin, (also known 
as Dodson Industrial District), and Swope Industrial Park Area, all 
along the Blue River in Kansas City, Missouri; and the Turkey Creek 
Basin, Kansas and Missouri. In the near future we hope to begin a fifth 
project, the restudy of seven Missouri River levees officially titled, 
Kansas Citys, Missouri and Kansas.
    Our largest project, 12 miles of channel modification along the 
Blue River, has been under construction since 1983. Construction was 
originally scheduled to be complete in 1998 but, due to federal funding 
constraints completion is now projected in 2005 by the Corps of 
Engineers. This is the most important of our current projects and also 
represents our most urgent need as we are determined to reclaim as much 
of the lost schedule as possible. This project also includes 
environmental clean-up along the Blue River and will serve as a means 
to reclaim a Brownfield area within Kansas City for redevelopment into 
a once again thriving business district. Funding in the amount of $19.7 
million in fiscal year 1998 will allow for construction completion in 
2002. Additionally, to achieve this completion date, the project 
requires funding of $18.5 million in fiscal year 1999, $19.8 million in 
fiscal year 2000, $20 million in 2001, and $24.4 million in 2002.
    Plans, engineering and design (PED) for the Dodson Industrial 
District levee project as recommended by the Blue River Basin, Kansas 
City, Missouri, feasibility study are currently being prepared and 
construction authorization was included in the 1996 WRDA bill. This 
levee will protect this valuable industrial district located in the 
Blue River Basin, upstream of the channel modification project and the 
Swope Park Industrial Area. The PED phase was scheduled to be complete 
in September, 1999, but due to a lack of funding the schedule is 
beginning to slip. We request that the funding shortfall experienced in 
fiscal year 1997, which resulted in the delay, be compensated for by 
providing funds in the amount of $725,000 in fiscal year 1998, and 
again in fiscal year 1999, so that completion of PED may be achieved in 
1999, and 2001 targeted as the construction start for a two year 
contract.
    The reconnaissance study of the Swope Park Industrial Area, Kansas 
City, Missouri, also located along the Blue River, just downstream of 
the Dodson Industrial District, was certified by Washington on March 1, 
1997. The City has worked together with the Corps to develop a Project 
Study Plan (PSP) and hopes to sign the Feasibility Cost Sharing 
Agreement within the next few weeks. The Swope Park Industrial area has 
limited access, one-way in and out with a railroad track crossing, 
which is inundated during the initial phases of rising flood waters. We 
are anxious to begin and complete the next phases of this project and 
move on to construction prior to the loss of life due to these 
especially hazardous flooding conditions. To that end we request that 
the feasibility study, estimated to cost $950,000, be funded with 
$178,000 in fiscal year 1998, such that it may be completed in less 
than the usual three year period. It is our expectation that 
construction will qualify for funding in the Small Flood Control 
Authority program, thereby realistically allowing construction to 
commence in the foreseeable future provided that upcoming phases are 
sufficiently funded to keep the project moving forward. It is our goal 
to complete construction on all three of these Blue River projects by 
September 30, 2003, thereby providing a comprehensive flood mitigation 
project, together with the accompanying final FEMA map revisions, for 
this vital industrial region in Kansas City.
    The Turkey Creek Basin, Kansas and Missouri, feasibility study has 
been underway since 1989 and is scheduled for completion in November, 
1997. This bi-state drainage basin poses a dual flood threat, from 
hillside drainage on both sides of the state line and also from 
flooding of Turkey Creek itself. Commercial and industrial areas in 
this basin typically experience severe flooding on a three to five year 
recurrence interval, and a repeat of the July 1993 flood event will 
very likely lead to abandonment of a large portion of businesses in 
this presently thriving metropolitan community. We urge continued 
support of this project with funding in the amount of $291,000 in 
fiscal year 1998 and will be requesting that it receive new 
construction authorization in the 1998 WRDA bill.
    In addition to the above mentioned ongoing projects, another effort 
to address flooding in our area is the reconnaissance study of seven 
existing levees along the Missouri River, Kansas Citys, Missouri and 
Kansas. These levees, namely, Fairfax, Armourdale and Argentine, all in 
Kansas; CID in Missouri and Kansas; and North Kansas City, East 
Bottoms, and Birmingham, all in Missouri; provide the primary flood 
protection for the most densely developed business regions in the 
Kansas City area. There exists a critical need for this study as 
evidenced by the great flood of 1993 when several of the levees were 
nearly overtopped. Evaluation of how this Missouri River levee system, 
comprised of these seven levees, namely, functions as a whole is needed 
to determine inadequacies and inconsistencies in the current level of 
protection. Due to the immense scope and complexity of this study, 
which has five separate local sponsors, we request that it be funded 
with $830,000, approximately $100,000 per levee, to be appropriated 
equally over a two year period beginning in fiscal year 1998.
    Furthermore, I would like to express the City's strong support of 
several key programs which provide federal assistance for flood 
mitigation. Among these: Small Flood Control Authority, Section 205 of 
the 1948 Flood Control Act as Amended; Flood Plain Management Services, 
Section 206 of the 1960 Flood Control Act; Planning Assistance to 
States, Public Law 93-251; and Emergency Bank Stabilization, Section 14 
of the 1946 Flood Control Act as Amended. We appreciate the 
availability of these programs and will continue to seek beneficial 
uses for them within Kansas City, Missouri.
    In closing, Kansas City, Missouri, appreciates the past assistance 
we have received with these very important flood mitigation projects, 
is prepared to provide its share of funding in the future, and 
respectfully requests that federal funding adequate to keep these 
projects on schedule and within budget be appropriated in the upcoming 
fiscal year. Thank you for your time, attention and consideration.
                                 ______
                                 
  Prepared Statement of Gerald Holman, Senior Vice President, Wichita 
Area Chamber of Commerce, and Chairman, Arkansas River Basin Interstate 
                               Committee
    Mr. Chairman and members of this distinguished Committee, my name 
is Gerald Holman. I am Senior Vice President of the Wichita Area 
Chamber of Commerce. I am honored to serve as Chairman of the Arkansas 
River Basin Interstate Committee. Our committee is represented by 
members from the great states of Arkansas, Colorado, Kansas, Missouri, 
and Oklahoma. As Chairman, I present this summary testimony as a 
compilation of the most important projects from each of the member 
states. Each of the states unanimously support these projects without 
reservation. I also respectfully request that the testimony submitted 
by each state be made a part of these official proceedings.
    The Arkansas River Basin Interstate Committee strongly supports the 
urgently needed Montgomery Point Lock and Dam project at the confluence 
of the McClellan-Kerr Arkansas River Navigation System and Mississippi 
River. The Interstate Committee has held this project as our number one 
priority for the past several years.
    Continuing problems caused by sediment and lowering of the 
Mississippi River plague McClellan-Kerr entrance channel users. During 
times of low water on the Mississippi River the entrance channel is 
drained of navigable water depth. Without Montgomery Point the on-going 
integrity and future use of the navigation system are in peril.
    The lock and low water dam is needed to maintain navigation to and 
from the McClellan-Kerr and thereby protect some $5 billion in public 
and private investments already made in this system over the past 
twenty-five years. Thousands of jobs created along the waterway will be 
preserved and future economic development enhanced.
    We are most appreciative that this Committee and the Congress have 
recognized the urgent need for Montgomery Point Lock and Dam by 
appropriating $25.6 million to date. We are also grateful Congress has 
made it clear that it wants this project built.
    An appropriation of $25 million is needed for fiscal year 1998 to 
keep Montgomery Point moving forward on schedule in the most economical 
and cost effective manner possible.
    Also of great importance to the Interstate Committee is the 
Planning Assistance to States Program (Section 22 of the 1974 Water 
Resources Development Act) which authorizes the Corps of Engineers to 
use its technical expertise in water and related land resource 
management to help States and Indian Tribes solve their water resource 
problems. The program is used by many states to support their State 
Water Plans. As natural resources diminish, the need to manage those 
resources becomes more urgent. We recommend your continued support of 
this important program as it supports States and Native American Tribes 
in developing resource management plans which will benefit citizens for 
years to come. The program is very valuable and effective, matching 
Federal and non-Federal funds to provide cost effective engineering 
expertise and support to assist communities, states and tribes in the 
development of plans for the management, optimization and preservation 
of basin, watershed and ecosystem resources. The Water Resources 
Development Act of 1996 increased the annual program limit from $6 
million to $10 million, however, the fiscal year 1997 appropriation was 
limited to $2 million. The Committee requests that the annual 
appropriation for this valuable program be increased to $10 million.
    Finally, the Arkansas River Basin Interstate Committee requests 
your support of the vitally important demonstration project currently 
underway in Kansas. The project is called the ``Equus Beds Groundwater 
Recharge Demonstration Project.'' This project is taking flood waters 
and using them to recharge underground storage for use during times of 
low rainfall and dry conditions. This project when completed will 
provide technology for water poor areas throughout the nation. We 
respectfully request that you provide $500,000 to the Bureau of 
Reclamation to specifically continue this project.
    Mr. Chairman, Members of this Committee, we respectfully request 
that you and members of your staff review and respond in a positive way 
to the attached individual statements from each of our states which set 
forth specific requests pertaining to those states.
    We thank you for your consideration and assistance and are deeply 
appreciative of the foresight and wisdom you and your colleagues have 
shown in providing solutions to water resource problems each and every 
year.
[GRAPHIC] [TIFF OMITTED] TERNS.003

                                 ______
                                 
 Prepared Statement of Wallace A. Gieringer, Chairman, Arkansas River 
                       Basin Interstate Committee
    Mr. Chairman and Members of the Committee, thank you for the 
opportunity to present testimony to this most important committee. I 
recently retired as Executive Director of the Pine Bluff-Jefferson 
County Port Authority and serve as Arkansas Chairman for the Interstate 
Committee. Other committee members representing Arkansas, in whose 
behalf this statement is made, are Messrs. Wayne Bennett, soybean and 
rice farmer from Lonoke; Colonel Charles D. Maynard, U.S. Army, 
retired, from Little Rock; Barry McKuin, a Director of the Morrilton 
Port Authority at Morrilton; and N.M. ``Buck'' Shell, transportation 
specialist of Fort Smith and Van Buren.
    To each of you, your staff and the Congress--our most heartfelt 
thanks for appropriating $7 million for fiscal year 1997 for the 
urgently needed Montgomery Point Lock and Dam.
    With these funds the Corps of Engineers is now developing the 
necessary power supply, completing construction engineering, and is now 
scheduled to begin construction on the lock and dam proper this summer. 
Access facilities are already under construction. When completed, 
Montgomery Point will protect over $5 billion in public and private 
investments, thousands of jobs and world trade created as a result of 
the McClellan-Kerr Arkansas River Navigation System.
    Without Montgomery Point Lock and Dam the future of our wonderful 
McClellan-Kerr navigation system is threatened. Let me explain.
  --The water level of the Mississippi River controls the level of the 
        entrance channel. In recent years. the surface of the 
        Mississippi River has lowered resulting in navigation 
        restrictions on, and occasional closing of, the entrance 
        channel.
  --The low water level of the Mississippi River is projected by the 
        Corps of Engineers to continue to decline. Consequently, the 
        navigable depth of the entrance channel will continue to become 
        less and less thereby drastically reducing the carrying 
        capacity for barges going to or from the system. By 2030 not 
        even empty tows will be able to enter or leave the navigation 
        system. They will be resting on the bottom with no water unless 
        Montgomery Point Lock and Dam is constructed.
    The absence of Montgomery Point Lock and Dam continues to deter 
economic growth along the entire McClellan-Kerr and the project is 
certainly time sensitive! As the Mississippi River bottom continues to 
lower the McClellan-Kerr moves toward total shutdown. Existing dredge 
disposal areas are virtually full. Ongoing dredging and disposal of 
material can mean environmental damage. Construction must continue as 
rapidly as possible if the project is to be in place before disposal 
areas become inadequate.
    We are very grateful that you. your associates, the Congress and 
the Administration have recognized the urgency of constructing 
Montgomery Point. Appropriations of $25.6 million have been made to 
date for engineering, site acquisition and construction for this $163 
million project (1993 dollars) which should be completed in 2003 
according to the Corps of Engineers published schedule of construction 
finding.
    Mr. Chairman and Members of the Committee, continuing Congressional 
support is essential at this crucial time in the history of the 
project. We respectfully request and urge the Congress to appropriate 
$25 million for use in fiscal year 1998 to continue construction. This 
funding will insure that the urgently needed facility is in operation 
as soon as possible at the lowest possible cost.
    Other projects arc vital to the environment, social and economic 
well-being of our region and our nation. We recognize the importance of 
continued construction of needed features to the MeClellan-Kerr 
Arkansas River Navigation System and strongly recommend that you 
favorably consider the following in your deliberations:
    Support continued funding for the construction, operation and 
maintenance of the McClellan-Kerr Arkansas River Navigation System.
    Continue construction authority for the McClellan-Kerr Arkansas 
River Navigation Project until remaining problems identified by the 
Little Rock District Corps of Engineers have been resolved.
    Provide funds and direct the Corps of Engineers to begin 
construction of the Arkansas River Levees Project as authorized by 
Section 110 of the Water Resources Development Act of 1990. Continuing 
engineering and design is needed for these levees which have been 
previously studied in the cost shared Arkansas River Arkansas and 
Oklahoma Feasibility Study.
    Funds need to be specifically provided and the Corp of Engineers 
directed to begin rehabilitation construction on the Plum Bayou and 
Tucker Creek Levees.
    Fund continued repair and rehabilitation of the power units at the 
Dardanelle Lock and Dam which first went into operation in 1965. After 
this work is completed, power output will be increased by 13 percent 
and thus increase income to the Federal Treasury.
    Direct the Corps of Engineers to complete the Morgan Point 
Environmental Restoration project in accordance with the cost sharing 
clarification contained in the Water Resource Development Act of 1996.
    Provide funding and direct the Corps of Engineers to install low 
haulage equipment on the locks and dams between Little Rock and Fort 
Smith. This efficiency feature will reduce lockage time by as much as 
50 percent while permitting tonnage to double in each tow with only a 
minor increase in operating cost.
    We also urge the Congress to encourage the Military Traffic 
Management Command to continue to identify opportunities to accelerate 
use of the nation's navigable waterways to move military cargoes 
thereby helping contain the nation's defense costs.
    In conclusion, Mr. Chairman, please help prevent a crisis for the 
Arkansas River Navigation System and the multi-state region it serves 
by appropriating $25 million for use in fiscal year 1998 for Montgomery 
Point Lock and Dam.
    The entire Arkansas River Navigation System is at risk, and its 
long-term viability is threatened. The system will remain at risk until 
Montgomery Point is constructed, which could be by 2003. Some $5 
billion in federal and private investments and thousands of jobs and 
growing exports are endangered. The proposed lock and dam was in the 
original project. Thanks to Congressional insistence, the construction 
authority remains open.
    We fully endorse the statement presented to you today by the 
Chairman of the Arkansas River Basin Interstate Committee. We 
appreciate the opportunity to testify to your most important 
subcommittee and urge you to favorably consider our request for needed 
infrastructure investments in the natural and transportation resources 
of our nation.
                                 ______
                                 
   Prepared Statement of Steve Arveschoug, District General Manager, 
            Southeastern Colorado Water Conservancy District
    Mr. Chairman and Members of the Appropriations Subcommittee on 
Energy and Water Development thank you for the opportunity to present 
these comments and requests on behalf of Colorado as participants in 
the Arkansas River Basin Interstate Committee.
    Let me first voice my support for the Interstate Committee's 
priority funding request for the 1998 budget. The Montgomery Point Lock 
and Dam project as authorized under the McClellan-Kerr Arkansas River 
Navigation System in 1946 is well under way and needs the continued 
support of the Congress. It is an important part of the vital river 
transportation system.
    Allow me to update the Subcommittee members on the needs and issues 
in Colorado's Arkansas River Basin.
         u.s. bureau of reclamation--fryingpan-arkansas project
    Authorized by Congress in 1962 the Fryingpan-Arkansas Project is 
today greatly benefiting the citizens of Southeastern Colorado. Since 
the Project began delivering water in 1972 the District and the U.S. 
Bureau of Reclamation have cooperated to provide 1,014,176 acre-feet of 
water for agricultural and municipal use within the nine-county service 
area of the District. The Project has also provided storage for 873,959 
acre-feet of valuable winter-stored water for use during the dry summer 
months in Southeastern Colorado. Local tax payers and water users have 
paid the USBR over $42 million since signing the Repayment Contract in 
1982 and over $50 million in total. Those payments have met the 
District's repayment obligation to date and paid for our share of the 
Operations and Maintenance of the Project.
    The U.S. Bureau of Reclamation will again request funding for the 
Multipurpose Operation and Maintenance and the General Project expense 
for the Fryingpan-Arkansas Project. Mr. Chairman and Members I 
encourage your continued support for this key water delivery and power 
generation project in Colorado's Arkansas River Basin by supporting the 
USBR/Fryingpan-Arkansas request.
    Central to the operation of the Fryingpan-Arkansas Project is 
Pueblo Reservoir, which is located on the Arkansas River just 10 miles 
west of Pueblo, Colorado. The Reservoir is the delivery point for 
nearly all Project Water and can store in excess of 360,000 acre-feet. 
The Reservoir also provides much needed flood control storage during 
peak runoff periods and storm events in the basin.
    The Fryingpan-Arkansas Project is now over 20 years old and will 
require extraordinary maintenance over the next few years to guarantee 
reliable operation throughout the Project. Much needed repairs at 
Pueblo Reservoir Dam are among the highest priority at this time.
    The Pueblo Dam's outlet works requires sand blasting and painting, 
and several electrical gate operators are beginning to experience 
operational and maintenance problems. The power feed to the dam needs 
to be replaced, and the form drains need to be repaired. Pumps, gates, 
operator, emergency generator, supply transformer and gate control 
equipment are being programmed for major overhaul and/or replacement. 
In addition, a couple of the main construction joints between the 
monolithic blocks are leaking excessively and will need to be sealed. 
These extraordinary repairs, just to the Project's Pueblo Dam, are 
estimated to cost $600,000 and are over and above the routine annual 
O&M costs.
    Ruedi Dam, a Western-Slope feature of the Fryingpan-Arkansas 
Project, will also require increased extraordinary maintenance work and 
it is estimated to cost $80,000.
    The U.S. Bureau of Reclamation and the Southeastern District will 
be working to partially fund these items through the Department of 
Interior budgeting process and the Congressional appropriations process 
in the near future--1999 budget.
     u.s. army corps of engineers/colorado water conservation board
    In December of 1995 the Colorado Water Conservation Board formally 
requested the assistance of the U.S. Army Corps of Engineers in a study 
to plan for restoring channel capacity and river ecosystem values in 
the Arkansas River below John Martin Dam. Study efforts began with the 
signing of a 50/50 cost share agreement between the Corps of Engineers 
and the CWCB in August 1996.
    The Corps of Engineers portion of the funding comes from the 
Section 22 Planning Assistance to States Program. That Program has been 
a valuable tool for addressing water resource planning issues in 
Colorado. Continued Congressional support for the Program is important.
    The ``Arkansas River Channel Capacity and Riverine Habitat Study'' 
initially targeted the river reach extending from John Martin Dam 
downstream to the Colorado/Kansas state line. Continuation of the study 
reach to at least Garden City, Kansas is possible if a non-federal 
sponsor for the Kansas reach elects to participate. In addition, a 
reach from John Martin Dam upstream to Pueblo Reservoir is now included 
as Part Two of the Channel Capacity Study, and is funded under a 
separate cost share agreement.
    The purpose of the study is to develop and evaluate long-term 
maintenance plans which, when implemented, can improve channel capacity 
for flood flows and restore river habitat along the Arkansas River. The 
study is scheduled for completion in August 1997. This important study 
effort would not be possible without the cooperation and financial 
support of many state and local agencies, and of course the Corps of 
Engineers Planning Assistance Program. As stated earlier, Congressional 
support for this planning program is needed and appreciated.
                 endangered species act reauthorization
    Many members of Congress will again be challenged with the day-to-
day work of bringing to closure the Reauthorization of the Endangered 
Species Act. I encourage the work of the Senate and House Resources 
Committees toward striking a balance between the need to conserve the 
natural species of our world and the demands of resource development. I 
recognize that to be a tall order.
    The Act mandates ``conservation'' at any costs, even at the cost of 
the effective use of our water resources. The Arkansas River Basin in 
Colorado has not yet been directed to curtail water operations in 
compliance with an endangered species recovery plan. However, that 
threat exists, with potential new listings and habitat designation. The 
U.S. Fish and Wildlife Service is now reviewing a recent native aquatic 
species inventory and a listing may be in our future.
    Water users run in fear of such a listing with water rights 
implication, because the Act grants considerable power to the USFW 
Service, with no consideration for the economic impacts of species 
listings, or consideration for the monetary and future costs of 
recovery. The Southeastern District now spend tens of thousands of 
dollars each year protecting our publicly held water rights and the 
private water rights of our constituents from the potential burdens of 
an Endangered Species Act listing. Yet, we too want to protect our 
native species.
    The Southeastern Colorado Water Conservancy District actively 
supports the Upper Colorado River Basin Endangered Fish Recovery 
Program, which is designed to meet the recovery goals of the four 
listed fish species on the Colorado River, and allow water development 
to continue, including our transmountain diversions. That program 
attempts to work through the present rigidity of the ESA to find a 
balance of interests. It appears to work well, but, I understand that 
such collaborative efforts which offer assurances to land and water 
interests are under fire. Even the Department of Interior's ``safe 
harbor'' policy under the Habitat Conservation Plan process is now 
being challenged. Those that challenge these policies claim the ESA 
does not offer such protection. I would call such ``protection'' a 
necessary balance of interests and values, which is very much needed if 
we plan to meet future water and land use needs for the generations to 
come.
    Your continued work on ESA Reauthorization is encouraged and very 
much needed.
                               conclusion
    Mr. Chairman and Members, your time and interest in these matters 
is greatly appreciated. As I present these issues and funding requests 
to you, I recognize the difficulty you have in meeting these needs 
along with the many others you have been presented. Of course, like the 
others, the requests of the Arkansas River Basin Interstate Committee 
are important to us and our constituents. Your fair consideration of 
the needs of the member states of the Interstate Committee is all that 
I can ask.
    Thank you for your commitment to the water resource need of our 
citizens.
    Please call on me if you need additional information on the 
Fryingpan-Arkansas Project of the Southeastern Colorado Water 
Conservancy District (Steve Arveschoug, 719-544-2040).
                                 ______
                                 
Prepared Statement of Gerald H. Holman, Chairman, Arkansas River Basin 
                          Interstate Committee
                           summary statement
    The water resource projects in the Kansas Portion of the Arkansas 
River Basin have been carefully reviewed and reflect accurately the 
need. Many of the projects are safety, environmental and conservation 
oriented.
    In addition to the projects summarized below, we state our 
unanimous support for the fiscal year 1998 request of $25 million for 
continued construction of the critical Montgomery Point Lock and Dam 
Project to maintain viable commerce of navigation between the 
McClellan-Kerr Waterway and the Mississippi River.
    We ask for your support for these important Bureau of Reclamation 
Projects:
    City of Wichita/Groundwater Management District No. 2/State of 
Kansas Groundwater Recharge Demonstration Project.--A multi-year pilot 
project to demonstrate the feasibility of recharging a major 
groundwater resource supplying water to nearly 500,000 municipal, 
industrial and irrigation users and will also reduce potential 
degradation of the existing groundwater quality by minimizing migration 
of saline water. Continued funding in fiscal year 1998 is requested in 
the amount of $500,000.
    Cheney Reservoir.--On the North Fork of the Ninnescah River 
providing natural treatment of inflows in the upper reaches of Cheney 
Reservoir to control poor water quality due to agricultural runoff. 
Previous funding is appreciated. Bureau funding is not requested in 
fiscal year 1998.
    On-going Water Quality/Environmental Research.--Authorization of 
on-going Bureau of Reclamation research is critical to protecting 
existing supplies.
    We ask for your support for these equally important projects of the 
Corps of Engineers:
    Arkansas City, Kansas Flood Protection.--To protect homes and 
businesses from catastrophic damages resulting from either Walnut River 
or Arkansas River flooding. Previous funding is appreciated and 
continued funding is needed to complete the project as authorized.
    Winfield, Kansas Flood Protection.--This project will raise and 
extend an existing levee to provide badly needed flood control for the 
city. Fiscal year 1996 and fiscal year 1997 funding is appreciated and 
continued funding is requested to complete the project.
    Grand/Neosho River Basin.--Fiscal year 1997 research funding in the 
amount of $500,000 is appreciated to evaluate the adequacy of federal 
flood control easements around Grand Lake. Needed solutions impact both 
Kansas and Oklahoma. The study can be completed in fiscal year 1998 
with continued funding at the level needed by the Corps of Engineers.
    On-going Water Quality/Environmental Protection Research.--
Authorization of on-going Corps of Engineers research is essential as 
is demonstration project funding.
    Kanapolis Lake Water Quality Storage Reallocation.--We urge you to 
support the Kansas Water Office request of the Corps of Engineers to 
reallocate existing water quality storage for public supply 
availability for communities.
    We urge your continued support of the Department of Interior 
project:
    Quivira National Wildlife Refuge.--An engineering study to identify 
the watershed-based options available for producing the most efficient 
use of resources for the refuge and irrigation needed to support the 
area agricultural economy. The study can be completed with no 
additional funding. Your future support to implement solutions will be 
appreciated.
                           prepared statement
    Mr. Chairman and Members of this distinguished Committee, I am 
Gerald H. Holman, Senior Vice President of the Wichita Area Chamber of 
Commerce, Wichita, Kansas and Chairman of the Kansas Interstate 
Committee for the Arkansas River Basin. This statement is submitted on 
behalf of the entire Kansas Delegation. Other members of the Kansas 
delegation are Arthur T. Woodman, Architect with offices in Wichita, 
and Frank Liebert Attorney-At-Law, Coffeyville.
    We are honored to join with our colleagues from the states of 
Arkansas, Colorado, Missouri and Oklahoma, which five states, including 
Kansas, comprise the Arkansas River Basin Interstate Committee. We are 
unified as a region and fully endorse the statement of the combined 
Arkansas River Basin Interstate Committee.
    In addition to the important projects listed below, we state our 
unanimous support for the construction of the critical Montgomery Point 
Lock and Dam Project to maintain viable navigation for commerce between 
the McClellan-Kerr Waterway and the Mississippi River. This inland 
waterway is vital to the economic health of the five state area and 
your support is needed to maintain its future viability. We hereby 
state our unanimous support for the $25 million needed by the Corps of 
Engineers to maintain the most economical and cost efficient 
construction schedule.
    The water resource projects in the Kansas portion of the Arkansas 
River Basin have been carefully reviewed by the Kansas delegation and 
reflect accurately the need. Many of the projects are safety, 
environmental and conservation oriented. We are grateful for your past 
commitment and respectfully request your continued commitment.
     We ask for your support for these important Bureau of Reclamation 
projects for the Wichita area:
    City of Wichita/Groundwater Management District No. 2/State of 
Kansas Groundwater Recharge Demonstration Project.--This is the 
continuation of a Bureau of Reclamation project entitled ``Equus Beds 
Groundwater Recharge Demonstration Project'' to demonstrate the 
feasibility of recharging a major groundwater resource supplying water 
to nearly one-half million municipal, industrial and irrigation users. 
This model technology has application to other areas throughout the 
nation. The full scale project when implemented, will capture flood 
flows from the Little Arkansas River providing water for use during 
times of low rainfall or dry conditions and will also reduce potential 
degradation of the existing groundwater quality by minimizing migration 
of saline water.
    The Equus Beds provide approximately half of the Wichita area 
municipal water supply. This recharge project is vital to the future of 
the metropolitan Wichita area and surrounding farming communities. We 
are grateful for the $1 million funding in fiscal year 1995 and fiscal 
year 1996 and the $875,000 in fiscal year 1997. Fiscal year 1998 
funding in the amount of $500,000 is requested to cost share with City 
of Wichita funding for this on-going federally supported project. 
Governor Graves supports this much needed project as a benefit to 20 
percent of the state's population.
    Cheney Reservoir.--The reservoir provides approximately 50 percent 
of Wichita's water supply. Two environmental problems threaten the 
water quality and longevity of the reservoir. One is sedimentation from 
soil erosion and the other is non-point source pollution, particularly 
the amount of phosphates entering the reservoir resulting in offensive 
taste and odor problems. Potential pollution sites in the watershed 
above the reservoir have been identified along with Best Management 
Practices that can help reduce the pollution from those sites. The City 
of Wichita has committed $1.2 million to this project for implementing 
soil conservation practices consistent with the Management Plan. The 
Bureau of Reclamation constructed the reservoir and has remained 
involved in on-going support. Bureau funding in fiscal year 1997 in the 
amount of $235,000 was approved as cost share support for the local 
funding provided by the City of Wichita. Bureau funding in fiscal year 
1998 is not requested for this model project although future funding 
requests may be made.
    On-going Water Quality and Environmental Research.--Aggressive and 
innovative treatment techniques must be identified and implemented to 
protect our valuable water resources from increasing environmental 
problems. Authorization of on-going Bureau of Reclamation research is 
critical to protecting existing resources.
    This Committee has given its previous support to many important 
local protection projects in Kansas. Many projects are now completed 
and we are most grateful for your construction authorization. Since our 
agricultural communities have historically experienced major flood 
disasters, we are justifiably interested in rapidly moving other needed 
projects to completion. These projects all have multi-state impacts 
involving portions of the state of Oklahoma. However, our small 
communities do not have the funds nor engineering expertise necessary 
to provide adequate flood damage reduction measures.
    Therefore, consistent with your previous authorizations and 
consistent with the multi-state direction of the Corps of Engineers, we 
ask for your continued support for the following projects:
    Arkansas City, Kansas Flood Protection.--This project is in 
response to a critical need to protect the environment, homes and 
businesses from catastrophic damages that would result from either 
Walnut River or Arkansas River flooding which could include flood borne 
petroleum products from the Arkansas City refinery. The Corps of 
Engineers has extensively coordinated with the city and various state 
agencies in the development of this project, which when completed will 
eliminate damage in a multi-county area and also result in benefits to 
the state of Oklahoma just a few miles south of the project. We 
appreciate $700,000 fiscal year 1996 and $1 million fiscal year 1997 
funding. Also in fiscal year 1997, the Secretary of the Army, civil 
works, was authorized to construct the project. We request your 
continued support for the immediate implementation of construction as 
authorized in fiscal year 1997 at the funding level needed by the Corps 
of Engineers.
    Winfield, Kansas Flood Protection.--This project will raise and 
extend an existing levee to provide badly needed flood control for the 
city. Your fiscal year 1996 support in the amount of $670,000 and $1 
million in fiscal year 1997 is appreciated. All design studies are 
completed. We urge your continued support for project construction at 
the level needed by the Corps of Engineers to insure the safety of 
Winfield's citizens.
    Grand/Neosho River Basin.--The Grand/Neosho River Committee was 
formed at the request of both the Kansas and Oklahoma congressional 
delegations to evaluate water resource problems affecting both Kansas 
and Oklahoma. We appreciated your $500,000 fiscal year 1996 funding as 
well as the follow-on funding in fiscal year 1997 to initiate the Flood 
Easement Adequacy Study to evaluate the adequacy of federal flood 
control easements around Grand Lake. This study can be completed in 
fiscal year 1998 with your continued support at the level needed by the 
Corps of Engineers. We also support additional basin-wide resource 
planning in the Grand/Neosho River basin to ensure Grand Lake 
operations are protective of the entire basin within the two state 
area.
    On-going Water Quality/Environmental Protection Research.--
Environmental problems are increasing the importance of continued 
research to protect our valuable water resources. Aggressive and 
innovative treatment techniques must be identified and implemented. 
Authorization of on-going Corps of Engineers research is essential, and 
as appropriate, demonstration project funding.
    Kanapolis Lake Water Quality Storage Reallocation.--Agricultural 
communities in central Kansas are in need of additional public water 
supplies. A cost effective solution is reallocating existing water 
quality storage in Kanapolis Lake for public supply availability. The 
Kansas Water Office has made a request of the Corps of Engineers to 
authorize the reallocation which is a most expeditious solution for 
central Kansas. We urge you to support our request of the Corps of 
Engineers.
     Your authorization of funding for a most important U.S. Department 
of Interior, Fish and Wildlife Service project is also requested:
    Quivira National Wildlife Refuge.--This is a joint project 
involving the U.S. Fish and Wildlife Service--Region 6, the State of 
Kansas, the local groundwater management district and the Water 
Protection Association of Central Kansas. Quivira provides a resting 
area for waterfowl and endangered species during their annual 
migrations in the Central Flyway. The Refuge is comprised of a series 
of shallow pools totaling about 6,500 surface acre-feet and is part of 
the Rattlesnake Creek basin. The Rattlesnake Creek basin has 
experienced significant groundwater and streamflow declines in recent 
years due to climatic conditions as well as expansion of irrigated 
agriculture. An engineering feasibility study is underway to identity 
the watershed based options available for producing the most efficient 
and effective use of the water resources of the Rattlesnake Creek basin 
to protect the Wildlife Refuge as well as the agriculture economy of 
the area. Fiscal year 1996 funding in the amount of $760,000 and 
$1,400,000 in fiscal year 1997 is very much appreciated and will 
complete the study. No funding is requested for fiscal year 1998 
although future funding requests may be made.
    Finally, we are most concerned with any proposal to limit 
participation of both the Corps of Engineers and Bureau of Reclamation 
in development and protection of water resources infrastructure. It is 
essential to have the integrity and continuity these agencies provide 
on major public projects. Your continued support of these vital 
agencies including funding, will be greatly appreciated.
    Mr. Chairman and Member of this Committee, we thank you for the 
dedicated manner in which you and your distinguished colleagues have 
dealt with the Water Resources Programs and for allowing us to present 
our views and recommendations. We look forward with great expectations 
and hope for the future of water resource development in Kansas and the 
Arkansas River Basin.
                                 ______
                                 
 Prepared Statement of James M. Hewgley, Jr., Chairman, Arkansas River 
                       Basin Interstate Committee
                                summary
    The water resource needs for the State of Oklahoma have been 
carefully reviewed and the following accurately represents the needs of 
the citizens of our region.
    We hold as our number one priority the construction of the 
Montgomery Point Lock and Dam in Arkansas. The completion of this 
project is critical to the continued use of the navigation system and 
the continued growth of the entire region. We request an appropriation 
of $25 million for fiscal year 1998.
    Our committee recommends that $250,000 be made available to the 
Tulsa District, Corps of Engineers, to initiate an Assessment of the 
McClellan-Kerr Arkansas River Navigation System and related purposes.
    We also request your support of the Planning Assistance to States 
Program which authorizes the Corps of Engineers to use its technical 
expertise in water and related land resource management to help States 
and Indian Tribes solve their water resource problems. This committee 
requests that the annual appropriation for this valuable program be 
increased to the allowable $10 million.
    We support the ongoing effort to evaluate water resource problems 
in the Grand/Neosho River Basin in Kansas and Oklahoma. We support the 
completion funding of studies to determine the adequacy of existing 
real estate easements necessary for flood control operations of Grand 
Lake, Oklahoma.
    We also support funding for the Continuing Authorities Program, 
including the Small Flood Control Projects Program, and the Emergency 
Streambank Stabilization Program.
    The committee supports funding for a Dam Safety project at 
Tenkiller Ferry Lake, Oklahoma.
    We request your continued support of the Flood Plain Management 
Services Program which authorized the Corps of Engineers to use its 
technical expertise to provide guidance in flood plain management 
matters to all private, local, state and Federal entities.
    We also request your continued support of and funding for the 
Environmental Restoration Program.
    On a related matter of grace importance to the Interstate 
Committee, we would respectfully request that during the 
reauthorization of the Endangered Species Act, the Congress should 
consider amending the Act to require the consideration of the economic 
impacts in a decision to list a species as endangered or threatened.
    Finally, the committee supports the reactivation of the Arkansas 
Basin Advisory Committee.
                           prepared statement
    Mr. Chairman and members of the committee, I am James M. Hewgley, 
Jr., Oklahoma Chairman of the Arkansas River Basin Interstate 
Committee, from Tulsa. Oklahoma.
    It is my privilege to present this statement on behalf of the 
Oklahoma Members of our committee in support of adequate funding for 
water resource development projects in our area of the Arkansas River 
Basin. Other members of the Committee are: Mr. E.R. Albert, Jr., Tulsa; 
Mr. Robert S. Kerr, Jr., Oklahoma City; and Mr. Coleman Fite, Muskogee.
    Together with representatives of the other Arkansas River Basin 
states, we fully endorse the statement presented to you by the Chairman 
of the Arkansas River Basin Interstate Committee. We appreciate the 
opportunity to present our views of the special needs of our State 
concerning several studies and projects.
    As we have testified in the past, serious problems exist at the 
waterway entrance to the McClellan-Kerr Arkansas River Navigation 
System. Extensive testing has proved that construction of Montgomery 
Point Lock and Dam will be necessary to correct the problem. This 
project must be started soon to regain/maintain the shippers confidence 
in the reliability of the system.
    Your recognition, as well as that of the Administration, of the 
importance of constructing Montgomery Point Lock and Dam is very 
gratifying. To date, you and your colleagues have appropriated $25.6 
million for engineering, site acquisition and construction. This action 
is very much appreciated.
    We are thankful the Congress, in Public Law 102-580 directed that 
``The Secretary shall proceed expeditiously with design, land 
acquisition and construction of the Montgomery Point Lock and Dam on 
the White River, Arkansas, authorized as part of the MeClellan-Kerr 
Waterway by section 1 of the River and Harbor Act of July 24, 1946 (60 
State. 635-636).''
    We respectfully request the Congress appropriate $25 million in the 
fiscal year 1998 budget cycle to continue construction for the 
authorized project. This is the amount that the Corps of Engineers has 
indicated that they can effectively contract during fiscal year 1998. 
This will help to insure that the project is completed and in operation 
as soon as possible at the lowest possible cost.
    Mr. Chairman, members of this distinguished Committee, we 
respectfully remind each of you that this navigation system has brought 
low cost water transportation to Oklahoma, Arkansas and surrounding 
states. The Federal Government has invested $1.4 billion in 
constructing the system and there has been over $4 billion invested by 
the public and private sectors to develop the land side facilities and 
more than 53,000 jobs have been created as a result.
    The Interstate Committee recommends that $250,000 be made available 
to the Tulsa District, Corps of Engineers, to initiate an Assessment of 
the McClellan-Kerr Arkansas River Navigation System and related 
purposes in fiscal year 1998. This assessment will evaluate the 
economic impacts that the construction and operation of this major 
resource system has had on the Nation the impacted states and local 
areas along the system. Project outputs will be identified as to 
incidence of principal beneficiary and nature and magnitude of the 
outputs (benefits). Project features will be examined from the 
perspective of whether or not greater efficiencies can be achieved by 
defederalizing project components including the operation and 
maintenance of those features such as transfer to non-federal 
governmental bodies or the private sector. Such an assessment will 
provide a basic model for similar projects around the nation.
    We also request your support of the Planning Assistance to States 
Program (Section 22 of the 1974 Water Resources Development Act) which 
authorizes the Corps of Engineers to use its technical expertise in 
water and related land resource management to help States and Indian 
Tribes solve their water resource problems. The program is used by many 
states to support their State Water Plans. As natural resources 
diminish, the need to manage those resources becomes more urgent. We 
recommend your continued support of this program as it supports States 
and Native American Tribes in developing resource management plans 
which will benefit citizens for years to come. The program is very 
valuable and effective, matching Federal and non-Federal funds to 
provide cost effective engineering expertise and support to assist 
communities, states and tribes in the development of plans for the 
management, optimization and preservation of basin, watershed and 
ecosystem resources. The Water Resources Development Act of 1996 
increased the annual program limit from $6 million to $10 million, 
however, the fiscal year 1997 appropriation was limited to $2 million. 
The committee requests that the annual appropriation for this valuable 
program be increased to $10 million.
    We are particularly pleased that the President's budget includes 
funds to advance work for Flood Control in Oklahoma. Of special 
interest to our committee is funding for Mingo Creek, Tulsa, Oklahoma 
and Fry Creeks, Bixby, Oklahoma.
    Studies conducted by the Tulsa District in the 1970's identified 
the potential for flood damage reduction measures in the Cimarron River 
Basin. Several potential multiple purpose reservoirs were considered 
for development in response to needs for flood control, water supply, 
fish and wildlife and recreation. Development and operation of these 
projects in conjunction with the existing system of reservoirs in the 
Arkansas River Basin would provide for flood damage reduction along the 
Cimarron River downstream, as well as along the Arkansas River from 
Keystone Dam near Tulsa to Fort Smith, Arkansas. These projects would 
also offer the potential for development of hydropower and navigation 
benefits along the McClellan-Kerr Arkansas River Navigation System. 
Considerable local interest has developed in these projects, 
particularly the potential Crescent Lake which would be located about 
15 miles north of Oklahoma City and the Tulsa District has received 
letters of support for initiation of reconnaissance studies from the 
Oklahoma Water Resources Board and the mayors of Guthrie, Crescent and 
Oklahoma City. The committee requests funding in fiscal year 1998 to 
initiate a reconnaissance study of the Cimarron River Basin.
    We also support the ongoing effort to evaluate water resource 
problems in the Grand-Neosho River Basin in Kansas and Oklahoma. We 
support the completion funding of studies to determine the adequacy of 
existing real estate easements necessary for flood control operations 
of Grand Lake, Oklahoma. The study, authorized by the Water Resources 
Development Act of 1996 and partially funded in fiscal year 1997, will 
evaluate whether the Corps of Engineers has adequate flood control 
easements in the upper reaches of Grand Lake. If that evaluation 
indicates additional real estate interest is required, the Act further 
authorizes acquisition from willing sellers. That study can be 
completed in fiscal year 1998 if funding is provided: we urge you to 
fund this important project. The committee also supports a follow-on 
study in the Grand-Neosho basin which would evaluate potential changes 
to Grand Lake operations and the resulting impacts to other basin water 
resource needs and interests. The committee fully supports those 
studies which could provide relief to the property owners upstream of 
Grand Lake, Oklahoma.
    In addition, the committee supports a study for additional basin-
wide water resource planning in the Grand-Neosho River basin. That 
study would focus on the evaluation of institutional measures which 
could assist communities, landowners and other interests in 
northeastern Oklahoma and southeastern Kansas in the development of 
non-structural measures to reduce flood damages in the basin. The 
committee requests funding to initiate reconnaissance studies in fiscal 
year 1998.
    We also support funding for the Continuing Authorities Program, 
including the Small Flood Control Projects Program. (Section 205 of the 
1948 Flood Control Act, as amended) and the Emergency Streambank 
Stabilization Program, (Section 14 of the 1946, Flood Control Act, as 
Amended). We want to express our appreciation for your continued 
support of those programs.
     Although the Small Flood Control Projects Program addresses flood 
problems which generally impact smaller communities in rural areas and 
would appear to benefit only those communities, the impact of those 
projects on economic development crosses county, regional and sometimes 
state boundaries. The communities served by the program frequently do 
not have the funds or engineering expertise necessary to provide 
adequate flood damage reduction measures for their citizens. Continued 
flooding can have a devastating impact on community development and 
regional economic stability. The program is extremely beneficial and 
has been recognized nation-wide as a vital part of community 
development, so much so, in fact, there is currently a backlog of 
requests from communities who have requested assistance under this 
program. Oklahoma communities that have requested assistance from the 
Corps of Engineers under the Section 205 authority and are currently on 
a waiting list include Bartlesville, Bixby, Clinton, Dewey, Lawton, 
McAlester, Sayre and Stillwater. Additionally, the Pawnee Indian Tribe 
has requested the Corps' assistance with flooding problems.
    The committee also supports funding for a Dam Safety project at 
Tenkiller Ferry Lake, Oklahoma. The project is authorized by the Flood 
Control Act of 1938. The Tenkiller Dam is located on the Illinois river 
7 miles northeast of Gore, Oklahoma and 22 miles southeast of Muskogee, 
Oklahoma. Construction of the existing project began in June 1947, 
embankment closure was completed in May 1952. The proposed project 
consists of an auxiliary spillway with five 50 feet wide by 35 feet 
high tainter gates to be constructed near the right abutment of the 
embankment. The spillway structure will be similar to the existing 
spillway.
     The problem is that the existing spillway is inadequate to pass 
the probable maximum flood, and if occurred, the embankment would be 
over-topped for a duration of 30 hours. The existing spillway would 
pass approximately 85 percent of the probable maximum flood. If this 
event occurred and over-topping caused dam failure, severe economic 
damage would be incurred downstream. The town of Gore is located about 
7 miles downstream from the dam; however, the risk of loss of life 
would not be high as the town would be inundated by flood releases 
prior to dam failure because of the small downstream channel capacity.
    The Administration supports this project.
    Likewise, the Emergency Streambank Stabilization Program provides 
quick response engineering design and construction to protect important 
local utilities, roads and other public facilities in smaller urban and 
rural settings from damage due to streambank erosion. The protection 
afforded by this program helps insure that important roads, bridges, 
utilities and other public structures remain safe and useful. By 
providing small, affordable and relatively quickly constructed 
projects, these two programs enhance the lives of many by providing 
safe and stable living environments. There is also a backlog of 
requests under the program; counties in Oklahoma that have requested 
assistance under the Section 14 authority and are on a waiting list 
include: Blain, Caddo, Canadian, Choctaw. Cleveland, Garvin, Grady, 
Payne and Woods. Other Oklahoma communities needing assistance include 
Bartlesville and Shawnee.
    We also request your continued support of the Flood Plain 
Management Services Program (Section 206 of the 1960 Flood Control Act) 
which authorizes the Corps of Engineers to use its technical expertise 
to provide guidance in flood plain management matters to all private, 
local, state and Federal entities. The objective of the program is to 
support comprehensive flood plain management planning. The program is 
one of the most beneficial programs available for reducing flood losses 
and provides assistance to officials from cities, counties, states and 
Indian Tribes to ensure that new facilities are not built in areas 
prone to floods. Assistance includes flood warning, flood information 
is provided on a cost reimbursable basis to home owners, mortgage 
companies, Realtors and others for use in flood plain awareness and 
flood insurance requirements.
    We also request your continued support of and funding for the 
Environmental Restoration Program (Section 1135 of the Water Resources 
Development Act of 1986). The Environmental Restoration Program is a 
relatively new program which offers the Corps of Engineers a unique 
opportunity to work to restore valuable habitat, wetlands and other 
important environmental features which previously could not be 
considered. Local interest has been expressed for potential 
environmental restoration projects located at Great Salt Plains 
Reservoir, Lake Arcadia, Lake Eufaula, Lower Illinois River, Mountain 
Fork River, Meadow Lake, North Canadian River and the Sequoyah National 
Wildlife Refuge.
    On a related matter of grave importance to the Interstate 
Committee, we would respectfully request that during the 
reauthorization of the Endangered Species Act, the Congress should 
consider amending the Act to require the consideration of economic 
impacts in a decision to list a species as endangered or threatened as 
well as mandatory designation of critical habitat at the time the 
specie is listed, if critical habitat is to be considered. In addition 
we request that the Congress direct the U.S. Fish and Wildlife Service 
to develop procedures to objectively share information and specimens 
with parties that have a beneficiary interest in the listing process.
    And finally, the committee supports the reactivation of the 
Arkansas Basin Advisory, Committee. That committee, chaired by the 
Southwestern Division Commander, has been an important link between the 
Corps of Engineers and the beneficiaries of the outstanding water 
resource development projects on the Arkansas River and its major 
tributaries in the Tulsa and Little Rock Districts. The committee 
provides an ongoing forum for the discussion of water resource problems 
and addresses the need for changes to the system operations.
                                 ______
                                 
     Prepared Statement of Terrence J. O'Brien, Metropolitan Water 
                Reclamation District of Greater Chicago
    On behalf of the Metropolitan Water Reclamation District of Greater 
Chicago (District), I want to thank the Subcommittee for this 
opportunity to present our priorities for fiscal year 1998 and, at the 
same time, express our appreciation for your support of the District's 
projects in the years past. The District is the local sponsor for three 
Corps of Engineers' priority projects of the Chicagoland Underflow 
Plan: the O'Hare, McCook and Thornton Reservoirs. We are requesting the 
Subcommittee's full support for these vital projects. Specifically, we 
are asking that reprogrammed funding be made available for the O'Hare 
Reservoir in the Subcommittee's Energy and Water Development 
Appropriations Act for Fiscal Year 1998. Further, we request the 
Subcommittee to ensure that $5 million in carry-over construction 
funding for McCook and Thornton Reservoir projects is identified in the 
bill. Finally, we are requesting that bill language be included in the 
Act directing the transfer of the Natural Resources Conservation 
Service (NRCS) portion of the Thornton Reservoir to the Corps for 
initiation of construction of the project. The following text outlines 
these projects and the need for the requested funding. Also, attached 
is a booklet indicating the municipalities in our area which directly 
benefit from these projects and the need for the requested funding. The 
booklet reviews the history of the issues involved, including newspaper 
articles and pertinent data from the Corps of Engineers and the 
Illinois State Water Survey.
                     the chicagoland underflow plan
    The Chicagoland Underflow Plan (CUP) consists of three reservoirs: 
the O'Hare, McCook, and Thornton Reservoirs. The O'Hare Reservoir 
project was fully authorized for construction in the Water Resources 
Development Act of 1986 (Public Law 99-662). The authorization provides 
for the construction of a 1,050 acre-foot floodwater storage reservoir 
which will be connected to the existing O'Hare segment of the 
District's Tunnel and Reservoir Plan (TARP). Adopted in 1972, TARP was 
the result of a multi-agency effort which included officials of the 
State of Illinois, County of Cook, City of Chicago, and the District.
    TARP was designed to address the overwhelming water pollution and 
flooding problems of the Chicagoland area. These problems stem from the 
fact that the capacity of the area's waterways has been overburdened 
over the years and has become woefully inadequate in both hydraulic and 
assimilative capacities. These waterways were no longer able to carry 
away the combined sewer overflow discharges nor were they able to 
assimilate the pollution associated with these discharges. Severe 
basement flooding and polluted waterways (including Lake Michigan which 
is the source of drinking water for millions of people) was the 
inevitable result. We point with pride to the fact that TARP was found 
to be the most cost-effective and socially and environmentally 
acceptable way for reducing these flooding and water pollution 
problems. Experience to date has reinforced such findings with respect 
to economics and efficiency.
    The plan called for the construction of new ``underground rivers'' 
beneath the area's waterways. The ``underground rivers'' would be 
tunnels up to 35 feet in diameter and 350 feet below the surface. To 
provide an outlet for these tunnels, reservoirs were to be constructed 
at the end of the tunnel system. Approximately 93.4 miles of tunnels 
have been constructed and are operational or are under construction at 
a total cost of $2.1 billion. These tunnels capture the majority of the 
pollution load by capturing all of the small storms and the first flush 
of the large storms. Another 15.5 miles of tunnels costing $365 million 
need to be completed. The tunnels currently have no place to discharge 
when they fill up during large rainstorms because the O'Hare, Thornton, 
and McCook Reservoirs have not yet been built. Without these outlets, 
the local drainage has nowhere to go when large storms hit the area. 
Therefore, the combined stormwater and sewage backs up into over 
470,000 homes. This is a reduction from the 550,000 homes impacted 
before the operational tunnels were put on line.
            the o'hare reservoir--chicagoland underflow plan
    The O'Hare Reservoir project is the first component of CUP, the 
Corps' reservoir plan. Understanding the severe flood threat to the 
densely populated north central Cook County area, Congress authorized 
the project in 1986. The project's 1,050 acre-feet of storage is the 
optimum cost-effective storage capacity for flood control purposes. In 
the fiscal year 1990 Energy and Water Development Appropriations Act, 
Congress provided $1.5 million in first-year construction funds for the 
O'Hare Reservoir and specified that the reservoir be built to at least 
1,050 acre-feet in size as authorized, and in full accordance with the 
cost-sharing percentages specified in Section 103(a) of the Water 
Resources Development Act of 1986. The Fiscal Year 1992 Energy and 
Water Development Appropriations Act provided $4.0 million in 
additional construction funds to continue construction on the O'Hare 
Reservoir project and contained language directing the Corps of 
Engineers to award continuing contracts until construction is 
completed. Total Federal funding contributed since 1990 is $22 million 
for this project.
    As we have stated to this Committee over the years, the District is 
the local sponsor for this project and is fully committed to it. The 
District purchased the necessary land at a cost of $4.4 million and 
spent $3.0 million for utility relocations. The District will continue 
to meet its remaining cost-sharing obligations under the law, and will 
contribute $1.8 million in cash for this project.
    Based on the present high flood risk and potential damage due to 
inadequate channel capacity, we, along with our supportive 
congressional delegation, are requesting that the Subcommittee make 
reprogrammed funds available to complete critical construction work on 
the O'Hare Reservoir project in the fiscal year 1998 Energy and Water 
Development Appropriations Act. With this funding the Corps of 
Engineers will be completing the first reservoir for the overall TARP 
system.
    Based on two successive Presidentially-declared flood disasters in 
our area in 1986 and again in 1987 and dramatic flooding in the last 
several years, we believe the probability of this type of flood 
emergency occurring before implementation of the critical flood 
prevention measure is quite high. As the public agency for the greater 
Chicagoland area responsible for water pollution control, and as the 
regional sponsor for flood control, we have an obligation to protect 
the health and safety of our citizens. We are asking your support in 
helping us achieve this necessary and important goal of construction 
and completion.
    Our most recent flooding occurred just two weeks ago when, on 
February 20, 1997, almost four inches of rain fell on the greater 
Chicagoland area. Due to the frozen ground, almost all of the rainfall 
entered our combined sewers, causing sewage back-ups throughout the 
area. When the existing TARP tunnels filled with approximately 1.2 
billion gallons of sewage and runoff, the only remaining outlets for 
the sewers were our waterways. Between 9:00 p.m. and 3:00 a.m. the 
Chicago and Calumet Rivers rose six feet. For the first time since 1981 
we had to open the locks at all three of the waterway control points; 
these include Wilmette, downtown Chicago, and Calumet. Approximately 
4.2 billion gallons of combined sewage and stormwater had to be 
released directly into Lake Michigan.
    the mc cook and thornton reservoirs--chicagoland underflow plan
    The McCook and Thornton Reservoirs of the Chicagoland Underflow 
Plan (CUP) were fully authorized for construction in the Water 
Resources Development Act of 1988 (Public Law 100-676). CUP, as 
previously discussed, is a flood protection plan that is designed to 
reduce basement and street flooding due to combined sewer back-ups and 
adequate hydraulic capacity of the urban waterways. These projects are 
the second and third components of CUP, they consist of reservoirs to 
be constructed in west suburban Chicago and Thornton in south suburban 
Chicago.
    These reservoirs will provide a storage capacity of 15.6 billion 
gallons and will produce annual benefits of $104 million. The total 
potential annual benefits of these projects are approximately twice as 
much as their total annual cost. The District, as the local sponsor, is 
actively pursuing land acquisition for these projects, and is prepared 
to meet its cost sharing obligations under Public Law 99-662.
    These projects are a very sound investment with a high rate of 
return. They will enhance the quality of life and the safety and the 
peace of mind of the residents of this region. The State of Illinois 
has endorsed these projects and has urged their implementation. In 
professional circles, these projects are hailed for their 
farsightedness, innovation, and benefits.
    This year, based on significant flooding in the Calumet area, we 
have a specific request for Thornton Reservoir. While the Natural 
Resources Conservation Service (NRCS) has responsibility for 
constructing a portion of the reservoir, its schedule for completion of 
the reservoir is locally unacceptable. Therefore, we are requesting the 
Committee to include bill language directing the NRCS to transfer its 
portion of the Thornton Reservoir to the Corps and directing the 
initiation of construction in accordance with the NRCS document. We 
understand carry-over funds for the project are sufficient to allow the 
Corps to initiate construction of this portion of the Thornton 
Reservoir. As Congress has already authorized the project and the NRCS 
plan is currently tied to the Corps plan, we will be saving federal 
dollars by moving to construction quicker. Recent analysis by the 
District has shown that a combined reservoir provides significant 
benefits in terms of costs, constructibility and early availability.
    We have been very pleased that over the years, the Subcommittee has 
seen fit to include critical levels of funds for this important 
project. We were delighted to see the $6,700,000 in unobligated 
construction funds included in the Energy and Water Development 
Appropriations Bill for fiscal year 1997. However, it is critical that 
we receive carry-over funds in fiscal year 1998 to maintain the 
commitment to this project. Given the Corps' progress, Congress' 
direction and in order to provide critical flood relief, the District 
is urgently requesting that the Subcommittee ensure that $5 million in 
carry-over construction funding for the McCook and Thornton Reservoir 
projects is identified in the Fiscal Year 1998 Energy and Water 
Development Appropriations Act.
                                summary
    Given the broad sweep of our jurisdiction and the severity of 
flooding in our area, the Corps was compelled to develop a plan that 
would compliment the uniqueness of TARP and be sizable enough to 
accommodate our service area. With a combined sewer area of 375 square 
miles, consisting of the City of Chicago and 51 contiguous suburbs, 
there are 550,000 homes within our jurisdiction which are subject to 
flooding at any time. Of these, 185,000 homes flood on a regular basis 
because of inadequate conveyance and outlet capacity.
    The annual damages sustained exceed $150 million. If these projects 
were in place, these damages could be eliminated. We must consider the 
safety and peace of mind of the two million people who are affected as 
well as the disaster relief funds that will be saved when these 
projects are in place. As the public agency in the greater Chicagoland 
area responsible for water pollution control, and as the regional 
sponsor for flood control, we have an obligation to protect the health 
and safety of our citizens. We are asking your support in helping us 
achieve this necessary and important goal. It is absolutely critical 
that the Corps' work, which has been proceeding for several years, be 
continued on schedule.
    Therefore, we urgently request that necessary reprogrammed funds be 
made available in the Fiscal Year 1998 Energy and Water Development 
Appropriations Act to complete construction of the O'Hare Reservoir and 
ensure that the $5 million in carry-over construction funding for the 
McCook and Thornton Reservoirs be made available in the appropriations 
bill.
    Further, we request that bill language be included in the Act to 
direct the transfer of the NRCS portion of Thornton Reservoir to the 
Corps and for the Corps to initiate construction of the project using 
carry-over funds.
    Again, we thank the Subcommittee for its support of our projects 
over the years and we thank you in advance for your consideration of 
our request this year.
    [Clerk's note: The briefing for Illinois Congressional Delegation 
prepared by the Metroplitan Water Reclamation District of Greater 
Chicago is being held in the files of the subcommittee.]
                                 ______
                                 

               TEXAS WATER RESOURCE DEVELOPMENT PROJECTS

Prepared Statement of David Jenkins, President, Trinity River Authority 
                                of Texas
    Mr. Chairman and Members of the Committee: My name is David 
Jenkins, and I serve as President of the Trinity River Authority of 
Texas Board of Directors.
    TRA supports the level of capability expressed by the U.S. Army 
Corps of Engineers for projects located in the Trinity River Basin.
Wallisville Saltwater Barrier Project
    After 14 years of bitter litigation with environmental opponents to 
Wallisville, it was reshaped and reborn as an environmentally neutral 
project. Construction on this most important federal project was 
resumed in 1991. Progress on Wallisville has been acceptable since that 
time.
    When completed, Wallisville and Lake Livingston, a 90,000 surface 
acre water supply project completed in 1970 with 100 percent local 
funds, will operate as a system extending the City of Houston's water 
supplies through the year 2035. By eliminating the need to wastefully 
release large amounts of fresh water to hydraulically flush saltwater 
from the intake structures of a series of rice irrigation systems and 
the coastal water authority during low river flow conditions, this 
system operation will make more water available for beneficial use in 
the greater Houston metropolitan area and in the lower Trinity River 
Valley. Until the Federal Government completes Wallisville as specified 
in the 1967 local sponsors' cost-sharing agreement, and approved by 
Congress in 1983, the system benefits of these two projects cannot be 
realized.
    The Galveston District of the Corps of Engineers has expressed a 
capability of utilizing $15 million during fiscal year 1998 for the 
Wallisville saltwater barrier's completion. Trinity River Authority 
strongly supports an appropriation in this amount and requests this 
committee's continuing support.
Upper Trinity River Basin
    Flooding and flood control have re-emerged as major issues in the 
Dallas/Fort Worth metropolitan area. TRA, along with nine cities, three 
counties and one other special purpose district, have been 
participating in a feasibility study related to flooding along the Elm 
and West Forks of the Trinity River for the last several years. The 
Corps of Engineers has expressed the capability to beneficially spend 
an additional $1.2 million for fiscal year 1998 on three specific 
projects for which sponsors and the local share of funding exist. TRA 
supports this appropriation.
Dallas Floodway Extension
    This federal project would extend the levees that protect Dallas 
southward to protect a section of the metropolitan area that has been 
historically challenged from an economic standpoint. The Corps of 
Engineers has expressed a spending capability of $940,000 to begin 
preconstruction and design. TRA supports this appropriation.
Trinity River and Tributaries
    Navigation to the Port of Liberty on the lower Trinity River is run 
of the river. Maintenance dredging to keep this otherwise natural 
channel open for shallow draft navigation is necessary. There was no 
mention of funding for this purpose included in the budget. Experience 
with maintenance dredging along this portion of the river indicates 
that at least $1,000,000 could be beneficially spent for this purpose. 
TRA respectfully requests that an appropriation of at least $1,000,000 
be added for this purpose.
Operations and Maintenance Funds
    TRA supports appropriations for fiscal year 1998 operations and 
maintenance funds necessary to maintain operations for federal water 
projects within the Trinity River Basin. These projects include 
Bardwell Lake, Navarro Mills Lake, Joe Pool Lake, Wallisville Saltwater 
Project, and the Trinity River and tributaries maintenance dredging in 
Chambers and Liberty Counties.
Conclusion
    The Trinity River Authority thanks this committee for the 
opportunity to testify. We also thank Congress for the many 
improvements that the Federal Government has funded in the Trinity 
River Basin over the years. They have produced great benefits for the 
public and represent a very sound investment of federal funds.
                                 ______
                                 
   Prepared Statement of Ernie Zieschang, President, Port of Liberty 
                               Commission
    Mr. Chairman and Members of the Committee: My name is Ernie 
Zieschang and I am testifying today as President of the Port of Liberty 
Commission.
    The Port of Liberty is extremely important to the economic well 
being of our community and the lower Trinity River Valley. The lower 
Trinity River, when adequately maintained with revenues appropriated by 
this Committee, could be considered the economic lifeline of our 
primarily rural slice of southeast Texas.
    It greatly concerns us that no line item appropriation has been 
included in this year's budget for maintenance dredging under the 
caption of Trinity River and Tributaries. It is our firm belief, based 
on considerable past experience with maintenance dredging of our run of 
the river channel to the Port of Liberty, that $1,000,000 would be an 
appropriate amount for this Committee to dedicate toward this purpose. 
We sincerely request that you add this amount to your final 
appropriation for fiscal year 1998.
    We also request that you appropriate $15,000,000 for the completion 
of the long delayed Wallisville Saltwater Barrier. The Wallisville 
project will interface with and enhance navigation to the Port of 
Liberty. It will also greatly enhance the water supply capabilities of 
the lower Trinity River Basin. Please do everything in your power to 
keep this most important project moving forward.
    Thank you for your attention to our requests for fiscal year 1998 
and for your past contributions to our port and economic well being.
                                 ______
                                 
             Prepared Statement of the City of Houston, TX
    Mr. Chairman and Members of the Committee: My name is Frederick A. 
Perrenot, and I serve as General Manager of the Houston Public 
Utilities. On behalf of the City of Houston, I ask for this Committee's 
continued support for the Wallisville Saltwater Barrier Project. This 
project is of critical importance to the City's overall water supply 
plan for the Greater Houston Area.
    By developing three major reservoirs, a raw surface water 
conveyance/distribution system, and a water treatment/distribution 
system, the City of Houston has become the regional supplier of fresh 
water for the four million residents of the Houston-Galveston area. At 
a cost of about $1.8 billion, the development of all of these 
facilities has been very expensive for the City's ratepayers and 
outside customers. However, it has been necessary in order to maintain 
a continuing, economical supply of drinking water, to prevent saltwater 
intrusion into the Trinity River, and to eliminate the devastating 
problem of land subsidence which has reached levels of more than 10 
feet in some areas of the City.
    The Wallisville project is an essential part of this reservoir 
supply system. It was planned and developed to allow the full 
utilization of drinking water stored in Lake Livingston by eliminating 
the need for releases from that reservoir to prevent saltwater from 
intruding up the river and contaminating water supply intakes. The City 
first entered into a contract with the Corps of Engineers (Corps) to 
build the barrier in 1967. Construction has been started, halted to 
resolve environmental issues, and after resolution of those issues, was 
resumed in 1991 with funds appropriated by Congress. The Corps awarded 
the final construction contract for the saltwater barrier on December 
22, 1995. The City is committed to fulfilling its obligations under the 
terms of the contract and supports the Corps expressed capability of 
$14.5 million for fiscal year 1998. An appropriation in that amount 
will complete the total funding needs of the project. A smaller 
appropriation of $9.2 million would be sufficient to make the saltwater 
barrier operable.
    As responsible managers, the City is also proceeding with major 
studies to evaluate and enhance programs in the areas of water 
conservation, reservoir system operation, waste water reuse, and other 
methods to effectively and efficiently manage existing water supplies. 
However, even with these programs, it is projected that water demands 
will exceed the existing available water supplies by the year 2010. 
With an operational Wallisville Saltwater Barrier, the additional 
drinking water supplies in the Lake Livingston reservoir will be 
available to serve the area and will meet expected demand until about 
2035.
    The City would like to thank this Committee for its long-term 
support for this essential project and to assure you that it remains a 
high priority in our continuing efforts to meet our responsibilities as 
the regional surface water supplier.
                                 ______
                                 
 Prepared Statement of Douglass W. Svendson, Jr., Executive Director, 
                  Gulf Intracoastal Canal Association
    This testimony for the record is submitted by Douglass W. Svendson, 
Jr., Executive Director of the Gulf Intracoastal Canal Association. 
Ours is the oldest of the regional waterway associations, having been 
established in Victoria, Texas in 1905. The Gulf Intracoastal Waterway 
transports 120 million tons of freight annually, the third highest 
volume among our inland and coastal waterways after the Mississippi and 
Ohio Rivers.
    GICA's membership includes both shallow draft and deep draft ports, 
port commissions and navigation districts, barge and towing companies, 
petroleum refineries, chemical manufacturers, shipyards, marine 
fabricators, fuel terminal facilities, and individuals whose businesses 
are waterway related and dependent. We have 200 members in the five 
states of Texas, Louisiana, Mississippi, Alabama, and Florida served by 
the Gulf Intracoastal Waterway. In addition, the GIWW is the link that 
binds the North-South rivers to the canal, the coastal ports, and 
ultimately the heartland of America. The Mississippi River intersects 
the GIWW at New Orleans, one of our busiest ports, and the Tenn-Tom 
intersects the GIWW at Mobile.
    I would first like to address the general direction and policy 
choices in the 1998 Civil Works Budget.
    In the February 6, 1997 press announcement accompanying the 1998 
budget, Assistant Secretary of the Army for Civil Works, Mr. H. Martin 
Lancaster stated the Corps would be able to meet all of its 
maintenance, construction, flood control, environmental and other 
responsibilities under that proposed budget. I have great respect for 
the U.S. Army Corps of Engineers and I have no doubt about their good 
and honest intentions.
    However, when I see the magnitude of outlay reductions in 
operations and maintenance and flood control, and see how large an 
amount has been added to construction general for the coming years, I 
have serious doubts that it can all be accomplished. Proposed 
maintenance spending on many of the waterways in the Gulf South region 
of the U.S., including the Gulf Intracoastal Waterway, has been reduced 
so sharply that physical and environmental safety margins will be 
severely narrowed, and overall efficiency of a major commodity 
transportation mode will be impaired. Anticipated further reductions 
beyond 1998 will compound these operations problems. Please refer to 
the page of my testimony on the subject of operations and maintenance's 
importance to the GIWW.
    What I am referring to as large additions to the construction 
general account is the ``crowding out'' effect on many of the Corps' 
other responsibilities by fully funding, up front, a very large portion 
of a declining budget. When advance appropriations become effective for 
fiscal year 1999 to 2002, these built-in increases for construction 
general only mean less of what remains is allocable to other Corps 
responsibilities, including operations and maintenance.
    The United States is not the low cost producer for many of the 
basic commodities in energy, agriculture, chemicals, and chemical 
feedstocks. The inland and coastal barge and towing industry is 
however, the low cost transportation and distribution system. This 
system, in which America is preeminent, is the mechanism for 
distributing our agricultural, energy, and chemical output into the 
world trading economy. The result is income to our farmers, inexpensive 
food, energy, and electricity for our citizens, a wide variety of 
products made from plastics, a favorable balance of trade in most of 
these areas, and huge revenues to local, state and Federal governments. 
Almost all of these commodities are sold on world markets. Our low cost 
transportation system provides the U.S. with a competitive advantage. 
We will lose that advantage if our inland waterway system is not 
properly maintained.
    There are severe navigation and flooding problems on the 
Mississippi River, in and around New Orleans, and the Lower Atchafalaya 
River, which we recommend your committee address. Many of these 
navigation problems are worsened by natural disasters, such as Tropical 
Storm Josephine last fall from October 4 to October 8, 1996, and the 
floodwaters now pouring through Louisiana.
    The U.S. Army Corps of Engineers, New Orleans District, consumed a 
substantial part of its maintenance budget dredging the Mississippi 
River Gulf Outlet after the hurricane, and is now confronted with 
extensive dredging responsibilities in the Mississippi River as a 
result of flood waters and sediment. Funds have actually been 
``borrowed'' from Gulf Intracoastal Waterway maintenance to meet the 
river emergency.
    These problems also are directly related to replacement/continued 
maintenance of the Industrial Lock in New Orleans. Significant amounts 
of shallow draft traffic move south on the Mississippi to New Orleans 
where it enters the Gulf Intracoastal Waterway east, through the 
Industrial Lock. This traffic requires a properly maintained 
Mississippi River, a properly maintained Industrial Lock, and a 
properly maintained alternate route below New Orleans through Baptiste 
Collette.
    The GIWW east serves electric utilities, petroleum refineries and 
industrial chemicals in the Gulf South region, all crucial to this 
area's economy. In addition, the GIWW East is vital to our agricultural 
and wood industries. Of particular importance are chemical fertilizers, 
logs and chips. Due to a lack of funds in the New Orleans District, 
dewatering of Industrial Lock cannot occur. Due to intense neighborhood 
opposition, replacing the aged facility appears remote. The Coast Guard 
has agreed to mark the Baptiste Collette Channel, but funds have not 
been provided in the President's 1998 budget to maintain it. The 
bottleneck in the flood plagued Mississippi River due to less than 
adequate funding, and at the Industrial Lock, as well as Baptiste 
Collette, threatens over 25 million tons of traffic annually in the 
GIWW. We urge the Committee to make adequate funding available to the 
New Orleans District for these pressing needs, both in the Supplemental 
Appropriations Bill and regular 1998 Appropriations Act.
    It is not fair to the wide range of users who depend on this lock, 
waterway, river system and alternate route to have access denied, or 
threatened, because of inadequate funding. The Corps budget and press 
kit released February 6, 1997, shows $154 billion in annual U.S. 
Treasury receipts from import and export trade through our ports. This 
figure dwarfs the 1998 Civil Works program budget of $3.7 billion. 
Funds shortages during both critical and non critical times should not 
exist in circumstances where Federal tax receipts are so large in 
relation to Federal outlays.
          the president's budget request for fiscal year 1998
    GICA continues to support funding at the Corps' full capability for 
the project to enlarge the Victoria, Texas Channel to make its 
dimensions compatible with those on the Gulf Intracoastal Waterway.
    We also support funding at the Corps' full capability for what 
should be the final year of construction at the beach erosion control 
project at Sargent, Texas. We sincerely express our appreciation to 
this committee for its prior years funding of the Sargent Beach 
project, designed and constructed to prevent the Gulf of Mexico from 
breaching the Gulf Intracoastal Waterway.
    We support funding at the level of the President's budget request 
for the Section 216 studies being conducted in increments along the 
Texas coast.
    A concern for navigation in the Galveston District is that while 
operations and maintenance funding may appear to be sufficient this far 
in advance of fiscal year 1998, implementation of studies, Interagency 
Coordination team activities, and Dredged Material Management Plans 
must all be paid from the operations and maintenance account. These 
financial commitments necessarily take away from actual field 
operations and dredging.
    In addition, dredging requirements of about $2 million annually 
have been delayed in the Lower Laguna Madre since litigation over 
disposal practices began in 1994. Likewise, maintenance dredging in the 
channel to Victoria has been delayed because construction contracts 
were delayed. These maintenance obligations are going to return, 
probably in fiscal year 1998, and the District will be short in that 
area unless more level funding is provided for operations and 
maintenance.
    Taken together, the ICT studies, DMMP plans and maintenance 
dredging requirements in Laguna Madre and the channel to Victoria are 
going to impose added financial burdens on the Galveston District. To 
avoid shortages in the GIWW O&M account in fiscal year 1998, it should 
be funded at the level of $20 to $21 million annually.
    GICA continues to support funding for the Industrial Canal Lock, 
New Orleans, Louisiana. See testimony, Page two.
    GICA continues to support appropriations for the Louisiana Lock 
Study, which includes all of the locks on the GIWW in Louisiana west of 
the Mississippi River. The study is evaluating which improvements will 
maximize efficiency of the GIWW and its connections with the 
Mississippi River while minimizing costs.
 the importance of adequate operations and maintenance funding for the 
                       gulf intracoastal waterway
    The Gulf Intracoastal Waterway travels the coast line of Texas, 
Louisiana, Mississippi, Alabama, and Florida, connecting those state's 
deep and shallow draft Gulf Coast ports to each other, and mid-America 
through the Mississippi River the Tennessee-Tombigbee, The Red River 
Waterway, the Warrior Tombigbee, the Applachicola-Chattahoochee-Flint 
Waterway, and other north/south tributaries. The GIWW transports 120 
million tons of cargo annually through these five states' coastal zone. 
The protection of this nationally valuable environment requires the 
constant efforts of carriers, shippers, State and Federal governments. 
Proper maintenance dredging and sufficient O&M funding for the GIWW 
lock system is essential to preserve the efficiency and environmental 
superiority of the Gulf Intracoastal Waterway.
    Many of the locks on the GIWW operate to equalize water depths 
associated with Corps of Engineers flood control responsibilities. Some 
operate to relieve excess water in agricultural basins, which also 
relieves flooding of valuable farm land. At other times of the year the 
locks are operated to prevent salt water intrusion. Therefore, proper 
maintenance of these assets is vital for flood control, navigation, and 
agriculture.
    The navigation industry along the Gulf Coast, including carriers, 
shippers, and ports, has a crucial stake in safe efficient operations. 
Industry works with the Coast Guard and the Corps of Engineers through 
Government/industry safety advisory groups to achieve these goals. 
Industry also works closely with shippers through the responsible 
carrier program to maximize physical and environmental navigation 
safety.
    As rail and motor transportation have evolved in the last 15 years 
to ``on time'' and ``just in time'' delivery systems, shallow draft 
barge transportation, through agreements with its shippers, has evolved 
to play the same role. This system reduces costs for shippers and 
manufacturers, provides a cost advantage for United States producers of 
chemicals, for example, and results in thousands of jobs for American 
citizens.
    The Texas chemical industry has calculated that from 1981-1991, 
when our nation had roughly a $1 trillion foreign trade deficit, it 
nevertheless showed a $126 billion foreign trade surplus in chemicals. 
Because chemicals and other commodity groups in agriculture and energy, 
are traded on world markets, the United States' highly efficient 
transportation and distribution system gives our producers a cost 
advantage in those world markets. Insufficient operations and 
maintenance funding will undermine this highly efficient transportation 
system faster than any other factor.
                                 ______
                                 
  Prepared Statement of George A. Willcox, General Manager, Chambers-
                  Liberty Counties Navigation District
    Mr. Chairman and Members of the Committee: Thank you for the 
opportunity to express the importance of the Wallisville saltwater 
barrier to the Chambers-Liberty Counties Navigation District. The 
Navigation District, along with the City of Houston and the Trinity 
River Authority, acts as a local sponsor for the project which is 
located in Chambers County, Texas.
    The purpose of the project is to prevent saltwater intrusion from 
the Trinity and Galveston Bay Complex into the freshwater supply from 
the Trinity River. It is vital to the protection of the freshwater 
supplies of the City of Houston as well as several rural canal systems 
including C.L.C.N.D. The C.L.C.N.D. system supplies water for 
agricultural irrigation, to the Anahuac National Wildlife Refuge for 
wildlife enhancement and to the City of Anahuac and the Trinity Bay 
Conservation District for treatment for municipal use.
    The barrier is located on the Trinity River near the Trinity-
Galveston Bay Complex. It is down stream of Lake Livingston, which is a 
joint project of the City of Houston and the Trinity River Authority. 
Currently, during periods of low flow in the river, releases of 
freshwater must be made from Lake Livingston in order to maintain 
freshwater for the intake of the C.L.C.N.D. canal system. This intake 
is located upstream of the barrier and it will be protected upon 
completion of the barrier project. During last year's drought, releases 
of 1500 cubic feet per second were required from Lake Livingston in 
order to maintain freshwater at the C.L.C.N.D. intake point. This 
equates to approximately 970 million gallons per day during that period 
or an annualized rate of some 260 million gallons per day. Completion 
of the barrier will eliminate the necessity of these kinds of releases.
    Although the project has been long and controversial, the major 
issues of concern from the environmental community have been addressed. 
The downsized project is no longer a storage reservoir, however, its 
importance for the protection of saltwater intrusion has not 
diminished. In addition, it will be providing recreational and tourism 
facilities that will he utilized by local families as well as state, 
national and foreign visitors.
    Construction on this project is proceeding ahead of schedule and 
adequate funding is now essential for completion. We will greatly 
appreciate your consideration in appropriating the funds as requested 
by the Galveston District Corps of Engineers and thank the Committee 
for its past support of the project.
                                 ______
                                 
  Prepared Statement of Gary Skaggs, Chairman, Trinity River Steering 
         Committee, North Central Texas Council of Governments
    I am Gary Skaggs, Chairman of the Trinity River Steering Committee 
at the North Central Texas Council of Governments (NCTCOG). On behalf 
of the 9 cities, 3 counties, and 2 special districts participating in 
the Upper Trinity River Feasibility Study, I thank you for the 
opportunity to address the Committee during your deliberations on the 
fiscal year 1998 federal appropriations. We appreciate the long-term 
federal commitment demonstrated in the U.S. Army Corps of Engineers' 
(USACE) Feasibility Study appropriations since 1990.
    The Trinity River is the common thread connecting over 4 million 
residents of one of the nation's largest inland metropolitan areas and 
it remains the single most important resource to the North Central 
Texas area. Since the initiation of the Feasibility Study in 1990, our 
cooperative efforts have produced many important products and 
implemented significant flood plain management policies resulting in 
improved flood plain management practices. The Feasibility Study is an 
important component of NCTCOG's COMMON VISION program. The COMMON 
VISION Program's objective for the Trinity River Corridor is to achieve 
a Safe, Clean, Natural, Enjoyable and Diverse river corridor. These 
objectives are consistent with the Feasibility Study's goal of 
addressing flood damage reduction, water quality, environmental 
enhancement and recreation. Over the last six and a half years, 
detailed flood plain mapping, new computer flood damage assessment 
models, the Corridor Development Certificate (CDC) Process, new Trinity 
River flood plain regulatory information and the preliminary analysis 
of diverse alternative measures have been developed and produced.
    The Feasibility Study is an outstanding example of an 
intergovernmental partnership that has generated positive results. The 
participating local governments have demonstrated their support by 
contributing to the success of the Feasibility Study with financial 
commitments and cooperative effort. We remain committed to generating a 
positive return on those investments of time and money. Accordingly, as 
the local government's representative, I am pleased to report that the 
local government officials are eager to continue the progress made 
during the second phase of the Feasibility Study. This progress will 
result in implementable projects. I would like to highlight the 
achievements of Phase II of the Study for you and outline the remaining 
efforts to be undertaken in this important regional program.
    The Upper Trinity River Feasibility Study has projected that a 
model storm would cause over 22,000 homes and over 141 million square 
feet of commercial/industrial property to be flooded, with untold loss 
of life--a graphic picture of the potential catastrophic losses to 
flooding in the Dallas-Fort Worth Metroplex. The detailed flood 
analyses for the Standard Project Flood (SPF) have validated previous 
predictions of flooding severity in the Upper Trinity River Basin.
    The Feasibility Study continues to utilize sophisticated computer 
modeling tools based highly accurate and detailed topographical and 
topological mapping that provides unique capabilities for analyzing the 
flood plain. In addition, our cooperative effort has resulted in the 
implementation of a uniform set of flood plain development criteria by 
the local governments along the Trinity River in the Metroplex. This 
uniform criteria, known as the Corridor Development Certificate (CDC) 
Process, is designed to stabilize the existing level of flood risk of 
the Trinity River through innovative techniques and technical criteria. 
The most unique feature of the CDC Process is a peer pressure system of 
regional review and comment. The CDC Process was originally implemented 
in 1993. We are currently re-evaluating the CDC Process and developing 
the 2nd Edition of the CDC Manual.
    This funding request includes three projects currently being 
supported with local funds. The funding requested for fiscal year 1998 
will be used to support the locally sponsored projects underway in the 
cities of Arlington, Dallas and Fort Worth. The support for the 
Feasibility Study demonstrated by the participants through their 
continued funding support for the program clearly recognizes the 
Trinity River's value to the communities of the region. The Project 
Study Plans for the projects in Arlington, Dallas and Fort Worth 
emerged from the major cooperative and technical efforts of the 
Feasibility Study. The Feasibility Study continues to ``break new 
ground'' in Multiple Objective Management through development of these 
innovative projects which live up to the 1989 Congressional 
authorization to investigate ``flood damage reduction, water quality, 
environmental enhancement, recreation and other allied purposes.''
Arlington Johnson Creek
    In March, the Arlington City Council formally approved the Johnson 
Creek Watershed Concept Plan recommendations of the Johnson Creek 
Citizens Committee. The multiple objective plan has an initial cost 
estimate of $130 million and includes transportation improvements, 
flood damage reduction measures, environmental restoration and 
preservation, recreation amenities and a variety of economic 
development proposals. The City is hopeful that the Feasibility Study 
project investigation will be able to minimize local costs of 
implementing the many elements of the Johnson Creek plan, the locally 
preferred plan.
    At the outset of this project investigation, the City of Arlington 
asked the USACE to evaluate the feasibility of relocating flood-prone 
homes that had been identified by the City. The USACE assessment 
determined that the relocation of up to 64 residential structures could 
be justified under a federal flood plain relocation plan, with an 
initial cost estimate of $8.625 million. The flood plain evacuation 
plan is anticipated to be a major component of the total federal 
project plan developed for Johnson Creek. A letter from the Assistant 
Secretary of the Army for Civil Works recently approved the financial 
credit of this buyout plan, thus clearing the way for the City to start 
purchasing homes for removal from the flood plain. The resulting 
federal project will be heavily influenced by the adopted Concept Plan 
for Johnson Creek. These steps represent positive actions toward 
improving safety and quality of life along the 11 miles of the historic 
Arlington stream.
Dallas Floodway and Stemmons North Industrial Corridor
    The Dallas Floodway Project Study Plan will investigate the 
modification of the existing Trinity River floodway. The project plan 
may include river channel improvements, pier protection of existing 
bridges, and levee modifications to improve the level of flood 
protection for the City of Dallas. In the Stemmons North Industrial 
Corridor, two levee alignments along the existing Luna Road and 
Burlington Northern Railroad will be investigated to identify the 
optimum levee alignment. Each levee alignment will be analyzed in 
conjunction with a downstream levee in the Daniels Creek and Bachman 
Lake area.
    The Dallas project plans would also include numerous recreational 
and environmental amenities such as: a series of on-channel and off-
channel lakes; hike/bike trails within the floodway or on the levees; 
vehicular access to the floodway (including roads and parking); canoe 
launches; pedestrian bridges; recreation facilities for picnicking, 
sports fields and open-space areas; and vegetation and supporting 
structural amenities. Potential connections to existing business areas, 
park lands and recreational facilities within or near the study area 
will also be considered. These features would be consistent with the 
City Council adopted recommendations found in the Trinity River 
Corridor Citizen's Committee Plan, as well as recommendations from the 
Dallas Plan.
    In conjunction with the Dallas Floodway Project Study Plan, several 
other important and extensive Trinity River Corridor coordination 
efforts are underway at this time. Extensive coordination with the 
Texas Department of Transportation will facilitate the significant 
thoroughfare improvements being proposed along the Trinity River and 
Dallas Floodway as part of the Trinity Parkway Major Transportation 
Investment Study. The Corps is also in the final stages of negotiating 
the project parameters for a federal project in the area downstream of 
the Dallas Floodway, commonly known as the Floodway Extension Project. 
In March, the City of Dallas approved the final component of the 
Floodway Extension Plan, which is comprised of a $127 million levee, 
chain of wetlands and various recreational amenities. Additionally, the 
City approved a Great Trinity Forest Park Master Plan which is located 
in the Floodway Extension project area. The ultimate combination of all 
of these projects and plans will not only address many serious flood-
related problems but also provides the citizens of Dallas with an 
enormous opportunity for creating an extremely valuable community asset 
along the Trinity River.
Fort Worth Sump Projects
    The Fort Worth Floodway Sumps 14W and 15W Measures include improved 
sump storage and pumping capabilities. This project incorporates 
environmental restoration, water quality protection and recreational 
features, consistent with the Multiple Objective Management (MOM) 
nature of the Feasibility Study. The City of Fort Worth and the Tarrant 
Regional Water District are the co-sponsors for the study of Sumps 14W 
and 15W, which was initiated in June 1996.
    The Phase I assessment of the interior drainage of the Fort Worth 
Floodway for existing conditions has been performed on Sumps 14W and 
15W. Currently the project sponsors are evaluating the proposed project 
alternatives before committing to complete the remaining two phases of 
the project study. A decision is expected to be reached during April 
1997. Additionally, the co-sponsors are considering the study of a 
similar project for Sump 12W along the Fort Worth Floodway.
    In addition to the 3 projects just discussed, the Study's Executive 
Committee has already approved four Regional Implementation/Work Plans 
identified as having a local and federal interest. Work is now underway 
on these plans, including:
    Trinity Trails System.--This system would encompass all of the 
major arms of the Trinity River in the Study area--the Elm Fork, 
Mainstem, and West Fork. The focus of the planning effort is to produce 
coordinated greenway improvements along the Corridor that provide 
recreational and open space amenities while protecting the natural 
values and functions of the flood plain.
    Regulatory Flood Modeling and Mapping Work Plan.--This work plan 
has the goal of a coordinated modeling and mapping product that could 
be used by all the flood plain-related agencies. Local governments, the 
USACE and the Federal Emergency Agency (FEMA) will all benefit from 
this coordinated modeling. The USACE is rapidly nearing completion of 
the revised flood insurance study for the Trinity River for the Dallas-
Fort Worth Metroplex. New flood plain models and flood insurance rate 
maps will be submitted to FEMA in April 1997. This work will result in 
better, more consistent flood plain decisions and a streamlined 
development permitting process.
    CDC Process Implementation Plan.--The CDC process was implemented 
by the local participants to stabilize existing flood risks in the 
Trinity River Corridor. The intergovernmental review and information 
tracking elements of the process help local government staff make the 
best flood plain management decisions possible. The CDC Process 
implementation plan will establish a methodology for keeping the 
criteria and process up-to-date into the future. A revised CDC Manual 
is being produced this year. The USACE and the local governments will 
implement a permit fee system to maintain the flood plain tools that 
have been developed through the Feasibility Study.
    Regional Flood Warning and Emergency Response Work Plan.--This work 
plan involves enhancing and coordinating existing local flood warning 
systems throughout the Trinity River Corridor. Focusing attention on 
the operation of these systems will provide better information to all 
of the participating governments and provide improved emergency 
response, not only along the Trinity, but also along all the major 
tributaries in the Upper Trinity River Basin.
Summary
    In each of these efforts, the goal is to provide a desirable plan 
for implementation which has Federal and non-Federal support and which 
will provide benefits at a reasonable cost. The steps remaining to 
achieve this goal are the technical analysis of alternatives; provision 
of economic, real estate, environmental, and engineering services; and 
final determination of the recommended plan(s). The division of the 
study into these three phases is rooted in the desire to produce a 
feasible solution as quickly as possible.
    Given the positive results generated by this important regional 
effort thus far, the Trinity River Corridor Steering Committee 
encourages the continuation of federal funds for the concluding pieces 
of the Feasibility Study. Significant local, state and federal 
governmental investment has been made in this study, which should be 
continued through the project implementation phase. We urge Congress to 
continue to fund cost-shared projects for implementation within major 
urban areas. Specifically, we request your support of the Corps of 
Engineers' $1.2 million appropriations for fiscal year 1998 to continue 
the Upper Trinity River Feasibility Study. Additionally, we ask for 
your support for the Corps' fiscal year 1998 funding requests of 
$940,000 and $70,000 for the Dallas Floodway Extension and Fort Worth 
Sumps 14W and 15 W projects, respectively, as we pursue the important 
watershed and floodway projects in Arlington, Dallas and Fort Worth, as 
well as the other multi-purpose projects in the Dallas-Fort Worth area.
    For more information on the status of the Feasibility Study 
Projects, please contact Chris Brooks with NCTCOG at (817)695-9212. 
Thank you very much for giving me the opportunity to address you today 
and for your continued support of this important multiple objective 
management program.
                                 ______
                                 
 Prepared Statement of H. Thomas Kornegay, Executive Director, Port of 
                           Houston Authority
    On behalf of the Port of Houston Authority (PHA) and the 196,000 
Americans whose jobs depend upon activity at the Port of Houston, we 
extend gratitude to Chairman Domenici, and members of the subcommittee 
for the opportunity to submit testimony in support of several important 
navigation projects included in the U.S. Army Corps of Engineers Civil 
Works budget for fiscal year 1998.
    For many years, the Port of Houston Authority has provided 
testimony to this subcommittee expressing appreciation for providing 
the funds necessary for the Houston Ship Channel (HSC) to remain fully 
functional by maintaining proper dredge depths and dewatering of dredge 
disposal sites; and, in recent years, by completion of required studies 
prior to authorization of the improvement project to deepen and widen 
the Houston Ship Channel. Each year, this subcommittee has listened 
carefully to the story of this vital waterway and has responded with 
the necessary support. We are deeply grateful for this support and are 
particularly excited about the partnership of this subcommittee, the 
Corps of Engineers and the Port Authority in marching forward with an 
insightful view of the future of one of our Nation's most vital 
waterways by this year finally beginning construction on the long-
awaited, critically needed improvement project.
    We express full support of the fiscal year 1998 Corps of Engineers' 
budget request in the following amounts:

Houston-Galveston Navigation Channels (Construction)....     $15,000,000
Houston Ship Channel (O&M)..............................       7,617,000
Bayport Channel (O&M)...................................       1,170,000
Barbours Cut Channel (O&M)..............................         845,000

    Each of these funding requests is important to ensure the 
continuous flow of commerce through this very busy waterway.
The Port of Houston--One of the Nation's busiest ports
    Port of Houston commerce generates over $5.5 billion annually to 
the Nation's economy and an estimated 53,000 people work in jobs that 
are directly related to Port of Houston activity and another 143,000 
jobs are indirectly related to the port's activity. Moreover, the port 
generates nearly $300 million in customs fees and over $200 million 
annually in state and local taxes.
    It is no exaggeration to say that the Houston Ship Channel is one 
of the most important economic lifelines between our Nation and the 
world. Houston's favorable geographic location provides easy access to 
the entire world business community through key ocean, land, and air 
routes. More than 150 shipping lines connect Houston with more than 250 
world ports. Four major railroads provide cargo distribution throughout 
the United States with the intermodal link of more than 160 trucking 
lines. The Port of Houston forms the core of the Houston international 
community which includes more than 350 U.S. companies with global 
operations and Houston offices for more than 45 of the world's largest 
non-U.S. companies. In addition, Houston is the home of one of the 
largest consular corps in the Nation, with over 66 foreign governments 
represented. Also, more than 20 countries operate trade office here. 
These factors have made the Port of Houston a preferred gathering and 
distribution point for shippers transporting goods to and from the 
Midwestern and Western United States.
               the port of houston--protecting our nation
    During the Desert Shield/Desert Storm operation, the U.S. 
government deployed 106 vessels carrying 458,342 tons of government 
cargo and military supplies from the Fentress Bracewell Barbours Cut 
Terminal at the Port of Houston. In fact, between August of 1990 and 
October 1991 the Port of Houston was the second busiest port in the 
Nation in support of our troops. We are proud that the strategic 
location of the Port of Houston allows us to play such an important 
role in the defense of our Nation and the world.
        modernization & the environment--successful partnership
    The Houston Ship Channel, which opened in 1914, is believed to be 
the result of the first-ever federal/local cost-sharing agreement. At 
that time, the channel was 18\1/2\ feet deep. It was subsequently 
deepened to its current depth of 40 feet with a width of 400 feet. This 
last improvement was completed in 1996. While Houston is one of our 
Nation's busiest ports, it is also one of the narrowest deep draft 
channels. As you can imagine, ships and shipping patterns have 
dramatically changed to meet the demands of world trade over the last 
30 years. Yet, this busy waterway has not been widened or deepened to 
accommodate these changes. As the local sponsor for the Houston Ship 
Channel, the Port Authority began its quest to improve the channel in 
1967. For reasons of safety, environment, and economics, the Houston 
Ship Channel is long over-due to be improved. The Port of Houston, and 
its partner in maintaining this federal waterway--the Corps of 
Engineers--are leading the way to a unique approach to addressing the 
environmental interests in the improvement of the Houston Ship Channel. 
In the late 1980's , the Port Authority and the Corps of Engineers 
joined with federal and state agencies to form an Interagency 
Coordination Team (ICT) in a cooperative effort to address 
environmental concerns with the project--a process advocated by 
environmental groups and various resource agencies. The ICT included: 
the U.S. Army Corps of Engineers (USACE), the U.S. Fish and Wildlife 
Service (USFWS), the U.S. Natural Resources Conservation Service 
(USNRC), the U.S. Environmental Protection Agency (EPA), the Texas 
General Land Office (GLO), Texas Parks and Wildlife (TPWD), the Texas 
Natural Resources Conservation Commission (TNRCC), the Texas Water 
Development Board (TWDB), the Galveston Bay National Estuary Program 
(GBNEP), National Marine Fisheries Service (NMFS), the Port of 
Galveston, and the Port of Houston Authority. Several committees were 
established by the ICT. One of the most important committees 
established was the Beneficial Uses Group (BUG). The BUG, chaired by 
the Port, was charged with developing a disposal plan to utilize 
dredged material in an environmentally sound and economically 
acceptable manner that also incorporated other public benefits into its 
design. Most important was the Port Authority's committed objective 
that the final plan would have a net positive environmental effect over 
the life of the project.
    We are pleased to report that the ICT unanimously approved the 
beneficial use plan for disposal of dredged material from the HSC 
project as one that will have a net positive environmental effect on 
Galveston Bay, while significantly increasing the net economic benefits 
to the region and our Nation. Three basic principles guided the BUG in 
their efforts: dredged material should be considered a potentially 
valuable resource; development of an environmentally acceptable 
disposal plan is intrinsic to the approval of the project; and, the 
adopted disposal plan must have long term environmental benefits for 
the Galveston Bay system. The approach utilized by the BUG for 
Galveston Bay made this effort unique and precedent setting. What was 
attempted had never been done before. The BUG developed a preferred 
disposal plan rather than reviewing a proposal in a regulatory setting. 
The BUG also addressed one of the largest navigation projects in recent 
years (approximately 62 Million Cubic Yards (MCY) of new work material 
and an estimated 200 MCY of maintenance material over the next 50 
years. Most importantly, the BUG actively solicited beneficial use 
suggestions from environmental interests and bay user groups whose 
collective ideas were given full consideration during the development 
of the recommended plan. In fact, the community identified more 
beneficial uses than the material available from the project plus 50 
years of maintenance dredging. The result was the identification of 
beneficial uses for the material to be dredged from the improvement 
project. The final plan includes the creation of 4,250 acres of marsh--
a bird island, boater destination, restorations of two islands lost 
over the years due to erosion and subsidence. In addition, an 
underwater berm will be constructed to provide storm--surge protection 
and habitat.
               port of houston-looking toward the future
    The voters of Harris County in 1989 committed significant local 
funding to support these improvements. By a 2 to 1 vote, citizens 
approved a measure that will provide the local funding ($130,000,000) 
to deepen the channel to 45 feet and widen it to 530 feet. The Corps of 
Engineers and resource agencies involved in the ICT and BUG process 
have worked diligently to address all concerns and to develop a truly 
unique approach. The Port Authority heartily commends the cooperation 
and hard work of the Corps of Engineers and the state and federal 
agencies who have participated in the process that has this project 
being applauded across the maritime and environmental communities. This 
project is the first in history to have netted no negative comments, 
during the public review phase of the Supplemental Impact Statement 
(SEIS).
          houston-galveston navigation channels (construction)
    Each year, since 1989, the Port Authority has come before this 
committee to request the appropriate funds for the studies (pre-
construction, engineering and design) necessary to ready this project 
for construction. Each year, this subcommittee has responded with full-
funding these requests. From fiscal year 1990 through fiscal year 1997, 
Congress has appropriated nearly $20,000,000 toward this goal. The Port 
Authority has contributed thus far over $1,020,000 to support this 
effort. This year, we are ready to begin the construction phase of this 
30-year dream. The Corps of Engineers' budget request for this project 
for fiscal year 1998 included $119,100,000 for phase one of a new full-
funding budget authority approach to new projects. The Port Authority 
understands that the Subcommittee will decide whether to provide full 
budget authority for new starts. We would only request that, if the 
Subcommittee in its wisdom concurs in this policy change, the Houston 
Ship Channel be treated no differently than other new starts. If the 
full-funding of budget authority becomes the model, then we would 
respectfully submit that $119,100,000 does not reflect full-funding of 
this project and would then request that the Houston Ship Channel 
project be granted the full-funded budget authority of the nearly 
$240,000,000 of the federal share authorized in WRDA'96. As we 
indicated earlier in this testimony, we did not ask for, nor do we 
expect this approach to become reality. We are fully prepared, as we 
have in years passed, to come before this subcommittee each year to 
request the funds necessary to build this project on an optimum 
schedule.
    The budget outlay request of $15 million for fiscal year 1998 is 
compatible with both a five year and a seven year construction 
schedule. It does not, however, accommodate the most economical and 
realistic schedule. Based on our cooperative and productive discussions 
with the Corps of Engineers, we are convinced that the optimal time 
line for completing the navigation portion of this project is four 
years. A four year schedule will accelerate the benefits of the project 
and reduce its costs. Each one year reduction in construction time adds 
more than $81 million in benefits, reduces escalation costs by $4.6 
million and drives down investment costs by more than $17 million. To 
achieve these added benefits and reduced costs, we would need an 
additional $8.9 million in outlays for fiscal year 1998. We fully 
appreciate the stringent budgetary restrictions within which the 
Subcommittee must operate. Nevertheless, the significant savings of the 
four year schedule actually make it possible for the Subcommittee to 
deliver earlier benefits from this project, while simultaneously 
conserving funds for other worthy projects. Not the least of the 
accelerated benefits of a four year schedule are the improvements to 
the environment that are included in the project. For the second year, 
the PHA's Demonstration Marsh was included in the Audubon Society's 
Christmas Bird Count. This year, the Houston count totaled 155 species 
with 59 species found at or near the marsh. The Port Authority has a 
responsibility to the citizens of Harris County to operate the port in 
a cost-effective and efficient manner. We could not be fiscally 
responsible if we did not strive to realize the benefits of the project 
as soon as humanly feasible and a most-efficient cost to the partners 
involved. We would appreciate this subcommittee's careful consideration 
of the four-year schedule of funding requests.
             houston ship channel-operations & maintenance
    The Corps' fiscal year 1998 requests for operations and maintenance 
funding includes $7,617,000 for maintenance dredging of key stretches 
of the channel. These include: dredging of 2,500,000 cubic yards of 
material from Red Fish Reef to Morgan's Point including raising levees 
at placement areas 14,15 and 16 to channel dimensions of 40 feet by 400 
feet; the removal of 160,000 cubic yards of material in the Atkinson 
Island barge channel; and, dredging the HSC reach from Sims Bayou to 
the Turning Basin. In addition, this work order includes dredging of 
the light draft channel at the neck of the Turning Basin. Safety and 
environmental concerns confirm the critical necessity of these 
projects.
                      dredging of bayport channel
    The Port of Houston Authority, the Bayport users and the Houston 
Pilots recognize the need for continued maintenance of this narrow 
portion of the channel. The fiscal year 1998 budget includes $1,170,000 
for dredging of the Bayport flare, removing 1,000,000 cubic yards of 
material to placement areas 14 and 16, maintaining proper depth.
                    dredging of barbours cut channel
    The Fentress Bracewell Barbours Cut Terminal is the premier 
container facility in the Gulf. In addition to being an extremely busy 
container terminal, it has been the facility utilized by the federal 
government in times of national defense crisis, and will soon become 
the home of the first cruise business to operate out of Houston. The 
fiscal year 1998 budget includes an important $845,000 for dredging of 
Barbours Cut, removing 600,000 cubic yards of material to Spillman 
Island disposal area to ensure proper channel depth of 40 feet.
                               conclusion
    We greatly appreciate your past support and urge you to include the 
funds requested to fully support these projects in this busy federal 
waterway. These maintenance projects, and particularly the funds 
necessary to construct the HSC improvement project at an optimal 
schedule, are vital, not only to the Port of Houston's continued 
ability to move the Nation's commerce in a safe, efficient, and 
economical manner, but also, to ensure the competitiveness of this 
waterway in the world marketplace--an absolute necessity in this global 
economy.
                                 ______
                                 

                  UPPER PLAINS WATER RESOURCE PROJECTS

Prepared Statement of the Iowa Department of Natural Resources, Kansas 
Department of Wildlife and Parks, Missouri Department of Conservation, 
                 and Nebraska Game and Parks Commission
    Regarding the Missouri River Bank Stabilization and Navigation, 
Fish and Wildlife Mitigation Project
  --A request for $10 million is being made for fiscal year 1998 to the 
        U.S. Army Corps of Engineers
  --The Corps of Engineers included $3.9 million in its budget for 
        fiscal year 1998, while $10.2 million of project work is ready 
        for implementation
  --Provides for construction of projects and acquisition of land to 
        restore and enhance habitats in the states of Iowa, Kansas, 
        Missouri, and Nebraska that were degraded as a result of the 
        Missouri River Bank Stabilization and Navigation Project
  --Provides more opportunities and improved quality of experience for 
        people in the four states that hunt, fish, hike, and enjoy the 
        outdoors through various other recreational pursuits
  --Reduced funding will result in the retraction of land acquisition 
        agreements that have been successfully negotiated and the delay 
        of construction projects that have approved designs and 
        specifications
  --Current authorization levels mitigate for 2 percent of the aquatic 
        and 7 percent of the terrestrial losses; less funding equates 
        to even less compensation for losses
  --Projects do not conflict with other uses of the Missouri River and 
        do not have public opposition
                               background
    Seven acts of Congress provided for the construction and 
maintenance of a navigation channel and bank stabilization works on the 
Missouri River. The most important of these Acts were passed in 1912, 
1925, 1927, and 1945 (Public Laws 62-241, 68-585, 70-560, and 79-14) 
respectively. The Missouri River Bank Stabilization and Navigation 
Project was conceived and designed for its stated purposes in an era of 
little recognition of the values of fish and wildlife resources. As a 
result, the natural features of the Missouri River were devastated. The 
project shortened the lower Missouri River by 127 miles.
    In response to the habitat degradation, Section 601(a) of the Water 
Resource Development Act of 1986 (Public Law 99-662) authorized the 
Missouri River Fish and Wildlife Mitigation Project within the states 
of Missouri, Kansas, Iowa, and Nebraska. This authorization was based 
upon a report of the Chief of Engineers, dated April 24, 1984, entitled 
Missouri River Fish and Wildlife Mitigation, Iowa, Nebraska, Kansas, 
and Missouri. The Chief's report was based on a May 1981 Feasibility 
Report and Environmental Impact Statement (EIS) by the Missouri River 
Division, U.S. Army Corps of Engineers (CEMRD) which: (1) described the 
historical fish and wildlife habitat losses and those likely to occur 
due to the Missouri River Bank Stabilization and Navigation Project, 
(2) described various measures to mitigate for these losses, and (3) 
recommended a plan to restore, preserve, or develop 48,100 acres of 
habitat. These acres represent only 2 percent of the aquatic habitat 
loss, and 7 percent of the terrestrial losses. The U.S. Fish and 
Wildlife Service and the states of Iowa, Nebraska, Kansas, and Missouri 
made up the Coordination Team that was developed (as outlined in the 
Fish and Wildlife Coordination Act of 1958) to formulate and decide 
acquisition and development sites with the Corps. It was established 
that 48,100 acres (18,200 acres on public lands and 29,900 acres on 
lands to be acquired) would be developed within the four states at 
ratios comparable to the habitat types lost. This level of mitigation 
has always been considered by the states to be a good start to what is 
ultimately needed. Continuing authority will eventually be required to 
achieve total mitigation.
What progress has been made?
    To date 17,634 acres have been acquired, 59 percent of the 29,900 
acres authorized. There have been 14,641 acres of aquatic and 
terrestrial habitat developed, which is 30 percent of the 48,100 acres 
authorized for development. Some restoration has been completed in all 
four states. This progress has primarily occurred in the last 3 years 
and it is vital to maintain this momentum.
What benefits are provided by this project?
    Mitigation projects benefit fish, wildlife, and people. Big river 
fish species, waterfowl, other birds, mammals, reptiles and amphibians 
are all benefiting through additional improved habitat. The completed 
sites are revegetating and returning to pre-channelization conditions, 
thus attracting fish for spawning and rearing. People are realizing 
that this restored habitat is providing places not only to hunt and 
fish, but to hike, enjoy nature, bird watch, and enjoy the Missouri 
River. Mitigation projects are bringing back hunting and fishing 
opportunities that have been lost in areas that in the past provided 
bountiful harvests.
    Channelization and induced floodplain developments have reduced the 
natural flood carrying capacity of the Missouri River causing 
additional flooding and it has increased the flood stages in the 
receiving Mississippi River. This has led, in turn, to increased 
pressure to construct more downstream levees and other single purpose 
flood control projects. By restoring portions of the floodplain through 
fish and wildlife mitigation, we are providing storage areas for flood 
waters and reducing local flood damages.
    Fish and wildlife mitigation projects are not adversely impacting 
other uses of the Missouri River such as navigation, flood protection, 
and municipal water supplies. We are not aware of any public opposition 
to fish and wildlife mitigation. In other words, these projects would 
provide a wide array of benefits without significant effects on 
existing uses of the River.
What appropriations are necessary?
    The U.S. Corps of Engineers requested $1.1 million for fiscal year 
1997. Congress increased that appropriation to $3.1 million. The Corps 
is requesting $3.9 million for fiscal year 1998. They have estimated 
their spending capability for fiscal year 1998 to be $10.2 million. We 
would like to see the fiscal year 1998 and following budgets for the 
Missouri River Bank Stabilization and Navigation Fish and Wildlife 
Mitigation Project be set at $10 million per year to complete the 
project in a timely manner. The sharp budget cut in fiscal year 1997 
and projected fiscal year 1998 budget will make it very difficult to 
keep this program on schedule. Even at $10 million per year, it will be 
at least 2002 before the project is completed. It was envisioned that 
the project would be completed in 2000, but the Corps is now projecting 
a completion date of 2006. The fiscal year 1994 appropriation for the 
Missouri River Fish and Wildlife Mitigation Project was $7.5 million, 
the fiscal year 1995 was $8.1 million, and fiscal year 1996 was $8.4 
million. These three years of funding resulted in individual project 
components being completed and, just as important, established momentum 
for the overall mitigation project. Last year's appropriation of $1.1 
million and this year's projected budget of $3.9 million will destroy 
the momentum that has taken so long to build.
    The Corps has indicated they will not have sufficient funds to 
acquire land already negotiated to purchase and they have contractors 
available to construct projects that have been engineered and designed. 
The Corps has stated that ``Funding for fiscal year 1998 is for 
continuing construction for the Missouri River Mitigation Project. 
Because the funds for fiscal year 1998 are very uncertain it is 
unlikely there will be funding available for any large construction 
contracts or real estate acquisitions. Work will likely be restricted 
to completing planning documents at several sites as well as monitoring 
the completed sites.''
    Previous appropriations for planning, engineering, design and 
construction have been well spent. The current authorization under the 
1986 Water Resources Development Act is $81.4 million (1996 dollars), 
of which $28.5 million has been expended. This indicates the project is 
only 35 percent complete and falling behind schedule rapidly because of 
cuts in the yearly appropriations and inflation. We are concerned that 
future appropriation cuts and inflation will only serve to delay and 
ultimately accommodate a less than successful mitigation project.
                                 ______
                                 
          Prepared Statement of the Standing Rock Sioux Tribe
    The Standing Rock Sioux Tribe respectfully requests construction 
funding for the Standing Rock Sioux Irrigation Project, planning funds 
for the expansion of the Standing Rock Sioux Municipal, Rural and 
Industrial Project, and funds for feasibility study of economic 
development along Lake Oahe, all in the amount of $2,300,000:

Standing Rock Sioux Irrigation Project Construction...........$2,000,000
Standing Rock Sioux MRI Project Planning/NEPA.................   200,000
Standing Rock Economic Development Feasibility................   100,000
                    --------------------------------------------------------------
                    ____________________________________________________

    Total..................................................... 2,300,000

    Funds for the irrigation project will be used to continue design 
and to construct facilities (intake, pumping station, pipeline and 
sprinkler systems) in the Kenel/Wakpala area in the southern half of 
the Standing Rock Indian Reservation.
    Funds are requested to continue planning and NEPA requirements for 
the expanded MRI system on the Reservation, a project that will be 
submitted for authorization in fiscal year 1997.
    Funds are requested to undertake feasibility investigations of 
recreational development on Lake Oahe.
Location
    The Standing Rock Indian Reservation is located in Sioux County, 
North Dakota, and Corson County, South Dakota (Figure 1). Tribal 
headquarters are in Fort Yates, approximately 75 miles south of 
Bismarck. The Reservation is bounded on the east by the Missouri River, 
on the north by the Cannonball River, on the west by a line of 
longitude of 102 degrees west and on the south by a line of latitude of 
45 degrees 30 minutes north. The Standing Rock Sioux Reservation was a 
part of the Great Reservation of the Sioux Nation in the Territory of 
Dakota established by the Treaty of 1868. The Act of March 2, 1889, 
diminished the Great Reservation of the Sioux Nation, and the Standing 
Rock Indian Reservation was part of the diminished reservation set 
apart as a permanent homeland for the Indians at the Standing Rock 
Agency in the Territory of Dakota. Figure 1 shows the location of the 
Standing Rock Indian Reservation.
                           part a--irrigation
Plan of Irrigation Development
    Planning studies of the Tribe address three major project 
alternatives for the development of the authorized 2,380 acres within 
the Standing Rock Indian Reservation. These alternatives are located in 
the Cannonball (north and south), Kenel/Wakpala, and Grand River areas. 
Resolution Number 299-94 of the Standing Rock Sioux Tribe, dated August 
8, 1994, (1) limits the development along the Grand River to 250 acres 
in the vicinity of Bullhead, or another location determined more 
suitable, (2) addresses about 400 acres in the vicinity of Cannonball 
and (3) refers to the remaining 1,780 acres, more or less, along the 
Missouri River including, to the extent suitable, lands north of Kenel 
and other lands in the southern half (South Dakota portion) of the 
Standing Rock Indian Reservation.
North Cannonball Unit to be Constructed in Fiscal Year 1997
    The Certification Report for this project area was completed in 
February 1997 and submitted to the Secretary of Interior. The 
environmental assessment is underway. Construction plans, 
specifications and bidding will be completed, and fiscal year 1997 
funds will be used to construct the unit. The estimated construction 
cost is $1.5 million, and funds have previously been appropriated for 
that purpose.
    The lands of the Cannonball Unit are part of the authorized 2,380 
acres of irrigation development on the Standing Rock Indian Reservation 
and account for about 430 acres of lands to be irrigated. Detailed land 
classification studies were initiated on specific areas of the Standing 
Rock Indian Reservation by the Standing Rock Sioux Tribe in spring of 
1996. Complimentary investigations have focused on cash flow during 
operation of the project, drainage investigations and trace element 
assessment. Those investigations were reported for the North Cannonball 
Unit as a part of the land classification investigation.
    The Standing Rock Sioux Tribe submitted a Certification Report 
containing sufficient information concerning the North Cannonball Unit 
(NCU) lands to appraise and separate the land into classes reflecting 
similar degrees of suitability for sustained irrigation. Certification 
of lands is a prerequisite to development of 2,380 acres of irrigation 
authorized by the Garrison Diversion Unit Reformulation Act of 1986 
(Public Law 99-294). `` * * * no funds are authorized to be 
appropriated for construction of these projects until the Secretary has 
made a finding of irrigability of the lands to receive water as 
required by the Act of July 31, 1953 (67 Stat. 266; 43 USC 390 a).  * * 
* \1\
---------------------------------------------------------------------------
    \1\ 43 USC 390a provides as follows: No part of any appropriation 
shall be available for the initiation of construction under the terms 
of reclamation law of any dam of reservoir or water supply, or any 
tunnel, canal or conduit of water, or any water distribution system 
related to such dam or reservoir unit the Secretary shall certify to 
Congress that an adequate soil survey and land classification has been 
made and that the lands to be irrigated are susceptible to the 
production of agricultural crops by means of irrigation or that the 
successful irrigability of those lands and their susceptibility to 
sustained production of agricultural crops by means of irrigation has 
been demonstrated in practice.
---------------------------------------------------------------------------
Kenel/Wakpala Unit to Be Constructed in Fiscal Year 1998
    Approximately 1,780 acres of land are located in the Kenel/Wakpala 
area in the Reservation's southern half. Field work for irrigability 
has been completed in the area, and a report similar to the North 
Cannonball Unit will be submitted to the Secretary in fiscal year 1997 
as a pre-requisite to the start of construction in this area. Other 
activities to be undertaken in fiscal year 1997 are completion of an 
environmental assessment and final plans and specifications in advance 
of bidding in fiscal year 1998. Appropriations for fiscal year 1998 
will provide for actual construction of parts of the Kenel/Wakpala 
Project.
                part b--standing rock sioux mri project
Plan Formulation Report
    The Standing Rock Sioux Tribe has completed an investigation 
entitled Plan Formulation Report, Standing Rock Sioux Municipal, Rural 
and Industrial Water Project, dated February 1997. The report 
constitutes a final engineering report with study of alternatives and 
recommendations for development of a project to bring safe and adequate 
drinking water to all parts of the Standing Rock Indian Reservation. 
With funds authorized by the Garrison Diversion Unit Reformulation Act 
of 1986 (Public Law 99-294), the Tribe has completed $8.5 million in 
construction to be bring drinking water to the Cannonball and Fort 
Yates areas, as well as areas in the southern half of the Reservation. 
The Plan Formulation Report of 1997 recommends completion of the 
project throughout all of the Reservation at a cost of $102 million 
(1996$). Figure 2 shows the location of the principal transmission 
facilities of the existing and expanded project.
Purpose of fiscal year 1998 Funds Request
    Funds requested for fiscal year 1998 will be used to investigate 
options with other Garrison parties for reformulation of the project in 
fiscal year 1998. Potential cost savings will be investigated. National 
Environmental Policy Act (NEPA) requirements will be fulfilled, in 
part. A Level I cultural resource inventory will be completed 
reservation-wide, subject to Tribal rules and regulations as well as 
federal requirements. A wetlands inventory will be completed. 
Endangered species and all other requirements necessary for completion 
of an environmental assessment will be properly addressed.
                part c. economic development feasibility
Purpose of Fiscal Year 1998 Funds Request
    Considerable off-Reservation planning for reformulation of Garrison 
has been conducted of the feasibility of recreational development. The 
requested funds will be used on the Standing Rock Indian Reservation to 
assess the feasibility of marina and other water-related economic 
development potentials along the Standing Rock Sioux shoreline of Lake 
Oahe.
                                 ______
                                 
    Prepared Statement of Norman Haak, Chairman, Garrison Diversion 
                          Conservancy District
    Chairman Domenici and Members of the Subcommittee: My name is 
Norman Haak, Chairman of the Garrison Diversion Conservancy District 
Board of Directors. We wish to thank the Chairman and the Committee for 
their past support. In the past, a portion of Garrison Diversion Unit 
appropriations has been used to assure a high quality and reliable 
water supply in communities across the state. These appropriations have 
also provided funding for completion of the mitigation programs set in 
motion by the Reformulation Act of 1986. The District is grateful for 
the assistance, and the taxpayers from Dickinson to Grand Forks and 
from Hankinson to Rugby appreciate the reliable water supply and 
efforts to complete the mitigation requirements.
    This year the President's budget includes a request of $20.4 
million for the Garrison Diversion Unit in order to continue assistance 
to communities still in need of a guaranteed supply of water. We 
realize that federal funding is limited, but the state's water needs 
continually grow as people's needs remain unmet. The potential for 
growth and high value economic development in areas of the state is 
limited due to the uncertainty of future water supplies. We are 
requesting an additional $7.5 million for water systems in Hebron, Glen 
Ullin, and Neche and for the continued operation of the Oakes Test 
Area.
    In December 1996, at a hearing in the State regarding Garrison 
Diversion, which was conducted by the North Dakota Congressional 
Delegation and the Governor, vivid pictures of inadequate water 
supplies were illustrated. One woman displayed a white shirt that 
looked dirty after just one washing with their existing water supply. 
She also asked if we could imagine how not knowing if you had enough 
water for the next day's meals and washing affected her family's 
quality of life.
    The State Water Commission and Garrison Diversion have put together 
a plan for meeting the State's municipal, rural, anal industrial (MR&I) 
water supply needs as far as the existing authorizations will allow. 
The plan was assembled two years ago and has been adjusted since then 
to match declining levels of appropriations for the GDU. The 
President's request, if not increased, will decimate the planned 
program for meeting the existing highest priority needs to financial 
assistance to municipal, rural, and industrial water systems.
    The Southwest Pipeline Project, already serving many areas, has yet 
to reach the communities of Hebron and Glen Ullin. These communities 
have failed a primary water quality standard test and the prospect of 
an EPA fine as high as $25,000 a day exists. In Hebron, a new cheese 
plant has just opened with the expectation that they will have a 
quality water supply in fiscal year 1998. That will not be possible 
without additional funding for the MR&I Program. Therefore, as a part 
of this increased request for $7.5 million, $3.5 million would be used 
to extend the Southwest Pipeline Project to these southwest 
communities.
    In addition, the community of Neche is in dire straits. They are 
also in violation of the primary water quality standards. This small 
community of 450 people cannot even afford to continue their current 
operation and have no alternative but to hook onto an expanded North 
Valley/Walhalla water system. Of our request, $3.5 million would be for 
the North Valley/Walhalla project so that it can serve the community of 
Neche.
    Of the additional funding, $500,000 is needed to continue the 
operation of the Oakes Test Area. The Bureau of Reclamation determined 
that they no longer wish to operate the Oakes Test Area in fiscal year 
1998 and asked that the appropriate state agency begin negotiations to 
develop legislation that would transfer title and responsibility for 
operation and maintenance of the test facilities to the state or its 
designee. The District has been negotiating in good faith to find an 
appropriate arrangement. The Bureau has no counter proposal to the 
operational proposal offered by the Garrison Diversion Conservancy 
District. Nevertheless, the current budget does not include funding for 
continued operation of the OTA in fiscal year 1998. Without this 
additional funding, the federal government's investment of over $50 
million in the Oakes Test Area will be left to rust and decay. The 
Bureau's estimated cost to abandon the OTA is $5 million, but no such 
money has been requested. Without additional monies, operators in this 
area will be left without a water supply and no recourse except the 
courts. Such action, or lack of action, will certainly prompt a strong 
reaction from those farms and businesses damaged in the Oakes Test 
Area. $500,000 will allow the State and the Bureau additional time to 
work out an acceptable solution.
    The new budget format includes $2.9 million in the Bureau of 
Reclamation's budget for operation and maintenance of Indian projects. 
We request that this budget format be reconsidered and funds for Indian 
OM&R be clearly identified as requirements outside of/or beyond those 
in the Garrison Diversion Unit.
    We are committed to answering North Dakota's water needs. It is one 
of the top priorities. We sincerely hope you can find the additional 
funds we are requesting for Garrison Diversion.
                                 ______
                                 
     Prepared Statement of the Crow Creek Sioux Rural Water System
Fiscal Year 1998 Appropriations Request
    The Crow Creek Sioux Tribe respectfully request funds and language 
in the appropriations report for fiscal year 1998 for a feasibility 
study of the Crow Creek Sioux Rural Water Supply System, South Dakota, 
in the amount of $185,000. The funds requested for fiscal year 1998 
will be used to investigate the feasibility of building a separate and 
independent rural water system within the Crow Creek Indian 
Reservation, connecting, at least in part, to the MId-Dakota Rural 
Water System and other alternatives for sources of safe and adequate 
water for the residents of the Crow Creek Indian Reservation.
Status of Needs Assessment
    The Crow Creek Sioux Sioux Tribe has completed the first draft of a 
Needs Assessment though a cooperative agreement administered by the 
Bureau of Reclamation. A second draft of that report will be completed 
in March 1997. Considerable progress has been made on the project, and 
the Tribe appreciates the administration and guidance provided by the 
Bureau of Reclamation. The Tribe now knows the quantity of water needed 
for present and future purposes and needs for improvement of water 
quality. The Tribe has identified the alternatives and prepared 
preliminary construction, operation and maintenance costs of a 
reservation-wide system that will serve the rural household and 
livestock needs as well as connecting the existing public water systems 
to an improved source of water with quality meeting drinking water 
standards.
    Funds of the Bureau of Reclamation are inadequate to complete the 
Needs Assessment, even though the Tribe has conducted the work at less 
costs than originally projected. Additional funds are needed for the 
necessary feasibilty study. We are informed by the Bureau of 
Reclamation that the agency cannot authorize the use of funds for 
feasibility studies without Congressional approval, and we seek that 
approval through this Committee and language in the House Report on 
Energy and Water Development appropriations. The Crow Creek Sioux Tribe 
has committed to work with the Mid-Dakota Project to determine if 
partial water service from that entity is feasible, and Mid-Dakota 
needs to know to what extent, if any, Mid-Dakota will provide water to 
the Reservation. Existing funds, will be used to assess the feasibility 
of Mid-Dakota supplying some of our water needs, provided Bureau of 
Reclamation can release fiscal year 1997 funds for that purpose. fiscal 
year 1998 funds will be used to address the feasibility of a 
comprehensive reservation-wide project, incorporating existing systems 
into the project, including any part of the Mid-Dakota system found 
feasible.
Background
    The Crow Creek Sioux Tribe of the Crow Creek Indian Reservation 
resides in central South Dakota on the eastern bank of the Missouri 
River, a virtually unlimited water supply (Figure 1). Table 1 presents 
the findings of our investigations of water needs to date.
    The report addresses needs of a water project throughout the Crow 
Creek Indian Reservation with a total cost of $18,010,000. The system 
would be designed to serve a future population of 2,843 persons, 
primarily members of the Crow Creek Sioux Tribe. Because the Crow Creek 
Sioux Tribe is youthful, with median age of 18.9 years, the population 
is growing at a moderately high rate, and the need for drinking water 
facilities will grow as time passes.
    Existing facilities include the Fort Thompson, Crow Creek, Big Bend 
and Stephan public water systems, which serve an estimated population 
of 1,520. Distribution facilities in the public water system would be 
incorporated into the new project and improved upon where necessary. 
The existing intake and treatment plant with 450 gpm capacity at Fort 
Thompson would likewise be retained. Existing storage facilities with 
241,000 gallons of capacity would be incorporated.
    Quality of water in the public drinking water systems ranges from 
good to poor. The Fort Thompson and Crow Creek systems, for example, 
have total dissolved solids (TDS) within the range of acceptable 
limits, but the Stephan and Big Bend water systems have total dissolved 
solids that exceed suggested limits of acceptability, (Table 1). Some 
of the individual rural wells, not connected to public water systems, 
have acceptable water quality, but the majority of individual wells has 
poor water quality with total dissolved solids ranging as high as 4,440 
milligrams per liter.
    The Missouri River is a source of dependable water supply for a 
municipal, rural and industrial water project on the Crow Creek Indian 
Reservation. The average annual streamflow at Fort Randall Dam is 
18,214,000 acre feet. Streams crossing the Crow Creek Indian 
Reservation, such as Campbell Creek, Elm Creek and Crow Creek, are not 
dependable supplies of water. While those sources have good flows 
during some of the months of the year, each of the tributary streams 
experiences zero flow during consecutive months of the year. 
Groundwater may be a reliable source of supply in the southeast corner 
of Big Bend and in the southeast corner of the Crow Creek Indian 
Reservation. Sufficient exploration of the terrace gravels at these 
locations has not been undertaken to determine the long-term 
availability of water and its quality.
    Need for a municipal, rural and industrial water project on the 
Crow Creek Indian Reservation averages 262 gallons per capita per day, 
including 48 gallons per capita per day for a heavy water using 
industry, such as a meat packing plant. The average need reflects 
system losses of 38 gallons per capita per day, 15 percent of demand, 
an acceptable level of leakage in transmission, distribution and in-
house fixtures. The average 262 gallons per capita per day reflects 
water uses for full employment, commercial and industrial development 
of the Reservation, provisions for livestock and moderate water 
conservation practices, the latter reflecting a future plumbing code 
requiring the use of water conserving fixtures in the home. Provision 
is also made for lawns and gardens surrounding each of the 978 
households projected for the Reservation in year 2020, (Table 1).

  TABLE 1-1.--STATISTICAL SUMMARY CROW CREEK SIOUX MUNICIPAL, RURAL AND 
                        INDUSTRIAL WATER PROJECT                        
------------------------------------------------------------------------
                                            1990 Census   2020 Projected
------------------------------------------------------------------------
Crow Creek Population...................           1,756           2,843
    Indian..............................           1,532           2,775
    Non-Indian..........................             224              68
Median Age:                                                             
    Crow Creek..........................            18.9  ..............
    South Dakota........................            32.6  ..............
Crow Creek School Enrollment:                                           
    Ages 3 and 4........................              40              73
     Ages 5 to 14.......................              16             765
    Ages 15 to 17.......................              97             179
     Ages 18 to 19......................              17              58
    Over 20.............................              42             122
    Total...............................             612           1,197
Housing:                                                                
    Households..........................             434             948
     Persons per Household..............            4.05            3.00
                                         -------------------------------
                                            Crow Creek     South Dakota 
                                         -------------------------------
1990 Household Income...................         $12,673         $22,503
1990 Family Income......................         $13,125         $27,602
1990 Per Capita Income..................          $3,717         $10,661
Percent Families Below Poverty Level....            49.5            11.6
1990 Labor Force........................             480         342,112
Unemployed..............................             139          13,938
Percent in Labor Force..................            55.7            74.3
Percent Unemployed......................            29.0             4.1
------------------------------------------------------------------------

                                                                   Value

Existing Public Water Systems:
    Population Served.........................................     1,520
    Service Connections.......................................       305
    Flow Capacity, gpm........................................       535
    Storage Capacity, gallons.................................   241,000
General Water Quality, TDS, mg/l:
    Secondary Suggested Limit.................................       500
    Fort Thompson.............................................       479
    Crow Creek................................................       706
    Stephan...................................................     1,500
    Big Bend..................................................     1,928
    Rural Wells.........................................................
        Maximum Observed......................................     4,440
        Average Observed......................................       702
Water Availability:
    Missouri River Streamflows, af/year.......................18,214,000
    Campbell Creek Streamflows, af/year.......................     2,669
    Elm Creek Streamflows, af/year............................     5,195
    Crow Creek Streamflows, af/year...........................    13,749
    Missouri River Monthly Minimum, af/month..................   260,668
    Tributary Monthly Minimum, af/month.................................
    Groundwater...............................................   ( \1\ )
Design Needs, gallons per capita per average day:
    In-Residence..............................................        81
    Lawns and Gardens.........................................        62
    School Enrollment.........................................         7
     Labor Force..............................................        11
    Commercial and Industrial.................................        13
    Heavy Industry............................................        48
    Livestock.................................................        14
    System Losses.............................................        38
    Water Conservation........................................       -12
                    --------------------------------------------------------------
                    ____________________________________________________

      Total...................................................       262
Design Needs:
    Average Day, gallons......................................   743,748
    Maximum Day, gallons...................................... 1,926,308
    Maximum Day, gpm..........................................     1,338
    Annual, af................................................       833

\1\ Good to Poor.

    The average future water need is 743,748 gallons per day. On days 
of the year when maximum water use is approached, needs will rise to 
1,926,000 gallons, approximately 2.59 times the average day 
requirement. These values are equivalent to a maximum day flow of 1,338 
gpm, of which 450 gpm will be provided from the existing system at Fort 
Thompson. The annual water requirement for the project is 833 acre 
feet, .005 percent of the average annual flow of the Missouri River at 
Fort Randall. It would require 200 similar projects to reduce the flow 
of the Missouri River by as much as 1 percent. The Crow Creek Sioux 
Tribe possesses water rights reserved by Tribal leaders at the time of 
the treaties with the United States, (including the 1868 Treaty) which 
significantly exceed the 833 acre feet of annual use proposed for this 
project. The water requirements of the municipal, rural and industrial 
water project are comparable to that required for approximately 250 
acres of irrigation on the Crow Creek Indian Reservation, (Table 1).
    Construction costs of the water project are estimated at 
$18,010,000. Twenty nine (29) pumping stations would be required 
throughout the system with a total of 463 horsepower. Electrical costs, 
based on 1996 dollars, would average $58,430 annually. Operation and 
maintenance costs of the pumping stations have been estimated at 
$17,000 annually, (Table 1-1). The project will require 181 miles of 
pipeline (985,000 feet).
    The project as proposed will provide safe and adequate drinking 
water to the Crow Creek Indian Reservation for the projected 
population, the development of commercial and business activities, 
development of a heavy-water using industry and the support of all 
livestock within the Reservation.
                                 ______
                                 
 Prepared Statement of Kurt Pfeifle, General Manager, Mid-Dakota Rural 
                           Water System, Inc.
Fiscal Year 1998 Funding Request
    The Mid-Dakota Project is requesting $29,836,379 in federal 
appropriations for fiscal year 1998. As with our past submissions to 
this subcommittee, Mid-Dakota's fiscal year 1998 request is based on a 
detailed analysis of our ability to proceed with construction during 
the fiscal year. In all previous years, Mid-Dakota has fully expended 
its appropriated funds, including federal, state, and local, and could 
have spent significantly more were they available.

                                           HISTORY OF PROJECT FUNDING                                           
----------------------------------------------------------------------------------------------------------------
                                                                                                   Award Level  
                  Federal Fiscal Year                     Project's   President's    Enacted    (Underfinancing)
                                                           Request       Budget       Levels         Applied    
----------------------------------------------------------------------------------------------------------------
1994...................................................   $7,991,000  ...........   $2,000,000      $1,500,000  
1995...................................................   22,367,000  ...........    4,000,000       3,600,000  
1996...................................................   23,394,000   $2,000,000   11,500,000      10,902,000  
1996...................................................           NA  ...........      ( \1\ )       2,323,000  
1997...................................................   29,686,000    2,500,000   10,000,000       9,400,000  
1998...................................................   29,836,379   10,000,000  ...........  ................
                                                        --------------------------------------------------------
      Totals...........................................  113,274,379   14,500,000   27,500,000      27,725,000  
----------------------------------------------------------------------------------------------------------------
\1\ Additional funding.                                                                                         
                                                                                                                
Note: Additionally, the State of South Dakota has contributed $7,373,000 in grants to the Mid-Dakota Project, in
  previous years. It is likely that the Project will receive $1,000,000 in grant and $1,000,000 in a short-term 
  loan this Legislative Session.                                                                                

    The Project was authorized by Congress and signed into law by 
President George W. Bush in October 1992. The federal authorization for 
the project totaled $100 million in a combination of federal grant and 
loan funds (grant funds may not exceed 85 percent of federal 
contribution). The State authorization was for $8.4 million. As of 
February 1996, the total authorized indexed cost of the project was 
$128,812,000, in fiscal year 1997. All federal funding considered, the 
Government is now 22 percent into its commitment to provide 
construction funding for the Project. Senate Bill 41 has overwhelmingly 
passed the South Dakota House and Senate and contains a grant of $1 
million and a short term loan of $1 million for the project, which will 
be made available to the Project in March, 1997. It is anticipated that 
the 1998 South Dakota Legislature will appropriate its remaining 
commitment, slightly over $1 million. When you look at the federal and 
state combined awards, you find that the project is nearly 30 percent 
complete, at least in terms of monetary awards. With this progress into 
its total development, we are pleased to see that Congress, in 
particular the Appropriations, Energy and Water Development 
Subcommittees, intend to see the Mid-Dakota project through to its 
completion.

                        MID-DAKOTA FUNDING STATUS                       
------------------------------------------------------------------------
                                                   Amount      Percent  
------------------------------------------------------------------------
Federal.......................................  $27,725,000        21.52
State.........................................    9,373,000         7.28
Remaining.....................................   92,760,000        71.20
                                               -------------------------
      Total Authorization.....................  128,812,000  ...........
------------------------------------------------------------------------

    Mid-Dakota wishes to thank this committee for its support over the 
past four years. With the current federal awards and funds appropriated 
by the State of South Dakota, we have been able to make phenomenal 
progress on project construction.
Impacts of Award
    The most obvious impact of any significant reduction from Mid-
Dakota's request will be the delay of construction of one or more 
Project components. The $29.8 million dollar request will allow the 
Project to proceed with construction of contract(s) 4-1A, 4-1B and 3-2 
(see map, page 4). An award of less than our request will result in the 
deletion or reconfiguration of one or more of these contracts from the 
fiscal year 1998 construction schedule. Further, reduced appropriations 
have the effect of adding more cost to the amount needed for completion 
of the Project.
    For more specific instances where the impact of insufficient 
funding will most definitely be felt, we offer the following as 
evidence to this testimony:
    City of Gettysburg, SD.--This small community (pop. 1,510) is 
facing a real danger of losing its water supply system. Currently, 
Gettysburg has an intake structure on the bank of the Missouri River. 
The pipeline carrying water from the intake to the community is caught 
in an area where the soil has been shifting and sliding. The City Water 
Manager and the City Council are very concerned that in the near future 
the hillside will give way and their water intake and supply pipeline 
will be lost or inoperable at best. The Community has corresponded with 
the Mid-Dakota Project and requested that we do whatever we can to 
accelerate construction of the Mid-Dakota pipeline to the Community. 
Mid-Dakota has replied that approximately $20 million in fiscal year 
1998 federal appropriations would need to be awarded to bring 
construction activities to the Gettysburg area.
    Ron and Betty Heckenliable.--of rural Highmore, SD, have been 
hauling water to their ranch for more than 43 years! As a weekly ritual 
Ron pulls a trailer mounted tank that holds 700 gallons to town and 
back, then fills his cistern to provide for his entire household water 
use. It is true that the extent of suffrage for Ron and Betty is in the 
minority of people within the Project area, but sadly it is not a 
rarity.
    Another impact not readily apparent, but certainly one that exists, 
is the impact funding has on other States. Many believe that Mid-Dakota 
is a Project that ONLY benefits people who live in South Dakota. 
Nothing could be further from the truth. The Great State of South 
Dakota is blessed with many things, however, industrial resources are 
not among them. Mid-Dakota has made what we consider a conservative 
estimate, stating that more than 70 percent of the total cost of the 
Mid-Dakota Project will be spent outside of our State. By way of 
example, millions of dollars have already been spent in pipe purchases 
in Alabama. Similarly, millions have been expended by way of contractor 
payments to Companies in North Dakota, Wyoming, Minnesota and Texas. 
Thousands and hundreds of thousands of dollars have been expended in 
many other States. Potentially, States such as Pennsylvania, Louisiana, 
Washington, Oregon and Kentucky will also benefit. The map to the 
right, denotes States that have already gained significantly from the 
construction of the Mid-Dakota Project (shaded red), as well as those 
States who potentially may realize significant purchases in the future 
as the type of materials and construction begin to change (shaded 
green). The point being, that Mid-Dakota is truly a ``federal'' 
Project, being constructed and providing benefits to people throughout 
the Nation, from California to Pennsylvania, from Texas to Montana. In 
very real as well as potential terms, Mid-Dakota may very well affect 
to varying degrees every State in the Nation.
    Mid-Dakota has consistently informed members of Congress and the 
various federal agencies that we work with about the detrimental 
effects insufficient funding has on the Project and ultimately the 
people who will receive the water. Always in character with the tough 
and individualistic portrayal of people living in the Great Plains, 
Mid-Dakota and the people we will serve have accepted the hardships 
imposed on the Project with a quiet resolve. However, failure to 
provide full funding has had profound consequences.
Construction in Progress
    Mid-Dakota began construction in September of 1994, with the 
construction of its Water Intake and Pump Station. Since that eventful 
day of first construction start, we have bid, awarded and are into 
construction on six Project components. The following bulleted list 
provides a synopsis of each construction contract:
  --Contract 1-1 (Oahe Water Intake and Pump Station), Contract was 
        awarded to Industrial Builders, Inc., of Fargo, ND, in August 
        of 1994. The Intake structure is of a vertical caisson design 
        and is currently at the 100 percent completion level. Only a 
        few clean-up items need to be accomplished and the contract can 
        be closed out in April, 1997. Cost of the Intake is 
        approximately $3.95 million.
  --Contract 2-1 (Oahe Water Treatment Plant), Contract was awarded to 
        John T. Jones Construction Co., of Fargo, ND, in October of 
        1994. The Water Treatment Plant is a ``Direct Filtration'' 
        design, capable of producing 9.0 million gallons of treated 
        water per day. The Treatment Plant is currently at the 98 
        percent completion level and will be substantially complete in 
        early March, 1997. Lack of completion of Contracts 3-1B, 3-1C, 
        4-1A and 5-1 (due to inadequate fiscal year 1997 funding), 
        prevents completion and testing of the water treatment plant. 
        However, the general contractor's, one year warranty covering 
        the entire facility will commence upon substantial completion 
        (some components of the facility have long warranties provided 
        by the specific manufacturer). Cost of the Treatment Plant is 
        approximately $10.3 million.
  --Contract 3-1A (Raw Water Pipeline), Contract was awarded to Larry's 
        Construction, Co., of Gillette, WY, in June of 1995. The 
        contract consists of nearly four miles of large diameter (30 
        inch) ``Ductile Iron Pipe.'' The Raw Water Pipeline is 
        currently complete and awaiting only some clean-up items prior 
        to closing the contract in April, 1997. Cost of the Raw Water 
        Pipeline is approximately $1.7 million.
  --Contract 3-1B (Main Transmission Pipeline--to Blunt, SD), Contract 
        was awarded to Kenko Inc., of Minneapolis, MN, in April of 
        1996. The contract consists of nearly 24 miles of large 
        diameter (30 and 24 inch) ``Steel Pipe.'' The contract is 36 
        percent in place and construction will resume in the Spring of 
        1997, following a Winter shut-down, with completion anticipated 
        in August, 1997. Cost of the contract is currently projected to 
        be $6.9 million.
  --Contract 3-1C (Main Transmission Pipeline--to Highmore Water 
        Storage Tank), Contract was awarded to S.J. Louis Inc., of St. 
        Cloud, MN, in April of 1996. The contract consists of nearly 18 
        miles of large diameter (30 and 24 inch) ``Ductile Iron Pipe.'' 
        The contract is 35 percent in place and construction will 
        resume in the Spring of 1997, following a Winter shut-down, 
        with completion anticipated in September, 1997. Cost of the 
        contract is currently projected to be $4.8 million.
  --Contract 5-1 (Highmore Water Storage Tank), Contract was awarded to 
        Landmark Structures Inc., of Keller, TX, in April of 1996. The 
        contract provides for the erection of a 1.5 million gallon 
        water storage tank (composite design) near the Town of 
        Highmore, South Dakota. The contract is 45 percent complete and 
        construction will resume in the Spring of 1997, following a 
        Winter shut-down, with completion in September 1997. Cost of 
        the contract is currently projected to be $1.4 million.
    Funding for the preceding contracts was reserved from previously 
appropriated and reprogrammed funds, except for a shortage of $796,172 
for Contract 3-1C. With the underfinancing of $600,000 subsequently 
applied, the Project is $1,396,173 short in fiscal year 1997. This 
shortfall will be covered with State funds from SB 41 (see above).
Use of Funds Requested
    The following numbered items represent the Project's proposed use 
of the $29.8 Million request in fiscal year 1998. Reduction of award 
from our request will cause the Project to delete or modify (depending 
upon size of any reduction) one or more of the delineated Project 
Components:

Canning Dist. Area (Cont. 4-1A).........................      $4,265,960
    Bid Contingency @ 5 percent.........................         213,298
    Change Order Contingency @ 5 percent................         213,298
    Inspection & Const. Services @ 8 percent............         341,277
    Add-on-Users @ 7.5 percent..........................         319,947
                    --------------------------------------------------------
                    ____________________________________________________
      Subtotal Canning..................................       5,353,780
                    ========================================================
                    ____________________________________________________
Highmore W. Dist. Area (Cont. 4-1A).....................       1,362,850
    Bid Contingency @ 5 percent.........................          68,143
    Change Order Contingency @ 5 percent................          67,143
    Inspection & Const. Services @ 8 percent............         109,028
    Add-on Users @ 7.5 percent..........................         102,214
                    --------------------------------------------------------
                    ____________________________________________________
      Subtotal Highmore West............................       1,710,378
                    ========================================================
                    ____________________________________________________
Onida Dist. Area (Cont. 4-1A)...........................       2,041,000
Onida Water Storage Tank (Cont. 5-......................         434,000
    Bid Contingency @ 5 percent.........................         123,750
    Change Order Contingency @ 5 percent................         123,750
    Inspection & Const. Services @ 8 percent............         163,280
    Add-on Users @ 7.5 percent..........................         153,075
                    --------------------------------------------------------
                    ____________________________________________________
      Subtotal Onida....................................       3,038,855
                    ========================================================
                    ____________________________________________________
Okobojo Dist. Area (Cont. 4-1A).........................       1,335,000
Okobojo Water Tank (Cont. 5-1A).........................         110,700
    Bid Contingency @ 5 percent.........................          72,285
    Change Order Contingency @ 5 percent................          72,285
    Inspection & Const. Services @ 8 percent............         115,656
    Add-on Users @ 7.5 percent..........................         100,125
                    --------------------------------------------------------
                    ____________________________________________________
      Subtotal Onida....................................       1,806,051
                    ========================================================
                    ____________________________________________________
Agar Dist. Area (Cont. 4-1B)............................       2,130,533
Agar Water Tank (Cont. 5-1B)............................         361,825
    Bid Contingency @ 5 percent.........................         106,527
    Change Order Contingency @ 5 percent................         106,527
    Inspection & Const. Services @ 8 percent............         170,443
    Add-on Users @ 7.5 percent..........................         159,790
                    --------------------------------------------------------
                    ____________________________________________________
      Subtotal Agar.....................................       3,035,645
                    ========================================================
                    ____________________________________________________
Gettysburg Dist. Area (Cont. 4-1B)......................       4,430,480
Gettysburg Water Tank (Cont. 5-1B)......................         685,000
    Bid Contingency @ 5 percent.........................         255,774
    Change Order Contingency @ 5 percent................         255,774
    Inspection & Const. Services @ 8 percent............         409,238
    Add-on Users @ 7.5 percent..........................         332,286
                    --------------------------------------------------------
                    ____________________________________________________
      Subtotal Gettysburg...............................       6,368,552
                    ========================================================
                    ____________________________________________________
Main Pipe to St. Law. (Cont. 3-2).......................       7,882,000
    Bid Contingency @ 5 percent.........................         394,100
    Change Order Contingency @ 5 percent................         394,100
    Inspection & Const. Services @ 6 percent............         472,920
                    --------------------------------------------------------
                    ____________________________________________________
      Subtotal Main Pipe to St. Lawrence................       9,143,120
                    ========================================================
                    ____________________________________________________
Other Costs:
    Engineering & Design................................         300,000
    Administration......................................         300,000
    U.S. Bureau of Reclamation..........................         250,000
                    --------------------------------------------------------
                    ____________________________________________________
      Subtotal Other Costs..............................         850,000
                    --------------------------------------------------------
                    ____________________________________________________
Wetland Component (O&M).................................          15,000
                    --------------------------------------------------------
                    ____________________________________________________
      Total Fiscal Year 1998 Program Needs..............      31,321,379
                    ========================================================
                    ____________________________________________________
Financing:
    Federal.............................................      29,836,379
    State...............................................       1,000,000
    Local...............................................         485,000
                    --------------------------------------------------------
                    ____________________________________________________
      Total Financing...................................      31,321,379

    Construction of schedules one through seven above, will provide for 
the connection of twelve small communities (Agar, Blunt, Gettysburg, 
Harrold, Highmore, Hoven, Lebanon, Miller, Onida, Ree Heights, St. 
Lawrence and Tolstoy, South Dakota). It will also make possible, the 
connection of approximately 910 rural accounts. Mid-Dakota estimates 
nearly 9,000 South Dakota residents will be enjoying the benefits of 
safe, clean, affordable drinking water upon completion of the preceding 
project components.
Closing
    Mid-Dakota is now very close to completing the painstaking task of 
building nearly $30 million worth of facilities before ever serving a 
drop of water. Funding already in place will ensure the completion of 
the facilities necessary to make a hydraulically operable system. The 
next step is to begin putting water users on line. The first $20 
million of our $29.8 million request will be dedicated to do exactly 
that, connecting users to the system. Further, the remaining $9.8 
million of the request, while ostensibly, to be used for a main 
pipeline extension, will also connect users, such as the towns of Ree 
Heights, Miller and St. Lawrence, South Dakota.
    Mid-Dakota is intensely aware of the difficult funding decisions 
that face the Energy and Water Appropriations Subcommittee and we do 
not envy the difficult job that lies ahead. We only ask that when the 
Subcommittee meets to make its funding decisions that you look closely 
at the Mid-Dakota Project and recognize the dire need that exists, the 
exceptionally high level of local and state support, the readiness of 
the Project to proceed, our credibility and ability, to actually 
accomplish those tasks we set out to do.
    Again, we thank the Subcommittee for their strong support in the 
past!
                                 ______
                                 
       Prepared Statement of the Mni Wiconi Project, South Dakota
Fiscal Year 1998 Budget Request
    The Mni Wiconi Project beneficiaries (as listed below) respectfully 
request fifth year construction funding (fiscal year 1998) for the 
project in the amount of $37,155,000 as follows:

Oglala Sioux Rural Water Supply System:
    Core Facilities (Treatment Plant, Pipelines)........     $12,223,000
    Distribution System on Pine Ridge...................       9,233,000
West River/Lyman-Jones Rural Water Systems..............       7,661,000
Rosebud Sioux Rural Water System........................       7,004,000
Lower Brule Sioux Rural Water System....................         925,000
                    --------------------------------------------------------
                    ____________________________________________________
      Total Mni Wiconi Project..........................      37,155,000

    The Oglala, Lower Brule and Rosebud Sioux Tribes were consulted as 
required by the Indian Self-Determination Act (Public Law 93-368, as 
amended) when the Department submitted its fiscal year 1998 budget of 
$33.19 million for the Mni Wiconi Project to OMB. Such amount, we 
believe, is in keeping with the judgement by the Bureau of Reclamation 
and Department of Interior that the project is progressing extremely 
well and that the higher level of funding is absolutely necessary to 
complete the Project by year 2003 and to bring good clean water to our 
people.
    The Administration's budget of $20.976 million is a sharp reduction 
from its budget of $28.3 million last year. This has created a crisis 
in the project.
Construction Plans for Fiscal Year 1998 Funds
    The project beneficiaries are capable of continuing significant on-
going construction on the distribution systems within the service areas 
of the project (Figure 1). See Sections 5 through 8.
    The Oglala Sioux Rural Water Supply System (OSRWSS) will execute 
contracts for major construction activities on the core system. Having 
completed the intake, construction contracts will be continued on the 
treatment plant (Table 1). Construction of the treatment plant will 
require $7.2 million in fiscal year 1998 to continue construction of 
this $20.6 million component. OSRWSS will use $5.6 million in fiscal 
year 1998 funds for construction contracts for large diameter pipelines 
and related facilities that will connect the treatment plant with the 
service areas (Table 1). The area proposed for pipeline construction is 
between the treatment plant and Vivian (Figure 1). Figure 1 is a 
diagram of the core facilities of the Oglala Sioux Rural Water Supply 
System that will deliver water to the interconnections of West River/
Lyman-Jones, Rosebud and Lower Brule. Figure 1 shows the elements of 
the core system that will be constructed with fiscal year 1998 funds 
and the ultimate development of the core system.
Construction Schedule Revision
    With the needs of the Mni Wiconi Project in mind, the councils and 
boards of the Indian and off-reservation service areas have prepared 
another revised plan for completion of the project by year 2003. The 
plan was designed to recognize the funding environment in which the 
appropriation committees are working and to seek a level of funding 
that is workable. The Project has five years after 1998 to complete the 
construction of the OSRWSS core system and the distribution systems 
within the respective service areas. The project participants are 
committed to working with the subcommittee to ensure that the 
expectations of the memberships are met. The request for 1998 is the 
average of the amount needed in the remaining five years of the 
Project.
    This construction schedule is modified from the schedule presented 
in the Final Engineering Report and from the schedule submitted to the 
committee last year. Construction of the treatment plant and other core 
facilities has been moved to later years of the schedule and has been 
spread out over a longer period of years to reflect the appropriation 
history. The following table reflects the appropriation needs to 
complete the Project.

                                              TABLE 1.--SCHEDULE AND APPROPRIATIONS FOR PROJECT COMPLETION                                              
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                            OSRWSS Core Pipelines                                          Appropriation
               Year                   OSRWSS       OSRWSS   ---------------------------------------------------- OSRWSS Core    Service      Completion 
                                      Intake     Treatment     N Route     to Vivian     to Murdo    to Pine R       Cost      Area Cost      Schedule  
--------------------------------------------------------------------------------------------------------------------------------------------------------
1996.............................   $3,775,104   $1,840,000  ...........  ...........  ...........  ...........   $5,615,000  $15,525,000   $21,140,000 
1997.............................  ...........    4,386,000  ...........   $8,065,000  ...........  ...........   12,451,000   14,056,000    26,507,000 
1998.............................  ...........    7,160,000  ...........    5,632,000  ...........  ...........   12,792,000   24,363,000    37,155,000 
1999.............................  ...........    7,253,000  ...........    5,034,000  ...........     $643,000   12,930,000   24,175,000    37,105,000 
2000.............................  ...........  ...........  ...........    1,240,000   $6,573,000    4,619,000   12,432,000   24,779,000    37,211,000 
2001.............................  ...........  ...........   $6,579,000  ...........    5,171,000    3,168,000   14,918,000   25,399,000    40,317,000 
2002.............................  ...........  ...........    8,684,000  ...........    4,330,000    2,277,000   15,291,000   26,034,000    41,325,000 
2003.............................  ...........  ...........   12,980,000  ...........  ...........  ...........   12,980,000   26,685,000    39,665,000 
                                  ----------------------------------------------------------------------------------------------------------------------
      Total......................    3,775,104   20,639,000   28,243,000   19,971,000   16,074,000   10,707,000   99,409,000  181,016,000   280,425,000 
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The construction sequence of the Oglala Sioux Rural Water Supply 
System (OSRWSS) will interconnect and supply all major population 
segments with Missouri River water in the project's ``sunset'' year, 
2003. The first major population segment will be served with Missouri 
River water in 2000: a design population of 5,000 within the Lower 
Brule and Lyman-Jones systems. By year 2002, the Oglala core system 
will deliver Missouri River water at interconnections designed for a 
population of 38,000 members, and by year 2003, the Oglala core will 
deliver water at interconnections designed for a population of 52,000 
members, the population projected for all service areas between years 
2010 and 2020. Distribution systems will also be completed in the last 
year in the construction schedule (fiscal year 2003). The Project can 
be completed on time if the appropriations request is met or nearly 
met. It will become more difficult to bring the project benefits to the 
area by 2003 without an increase in the Administration's proposed 
budget for fiscal year 1998. Please note that the costs have been 
indexed in Table 1 through 2003 and are higher than shown last year by 
$23.5 million due to the shift of one year on completion of all project 
elements and movement of more cost originally proposed earlier in the 
project to its end. Delays in funding not only increase the direct cost 
of the Project, there are also human costs involved. As described 
below, our Project has unique needs in regard to health and poverty 
issues. The costs, in terms of health care and human suffering, remain 
unaddressed as construction is delayed. It is essential to remain on 
schedule to end this suffering and improve the quality of life for 
people in the Project area.
Unique Needs of This Project
    Your consideration in this most important project, a project that 
brings hope, dignity and a spirit of cooperation between Indian and 
non-Indians, will be greatly appreciated. This subcommittee has 
provided us with considerable support for which we are grateful. This 
year we had hoped the Administration would provide a budget that would 
not require a significant adjustment by the subcommittee, but because 
of the devastating reduction during the OMB review period we are forced 
to petition for Congressional help to restore funds to the level 
requested here.
    The threat of a radically lower level of appropriations in fiscal 
year 1998 is one crisis compounding another. The project beneficiaries, 
particularly the three Indian Reservations, have the lowest income 
levels in the Nation. The health risks to our people drinking unsafe 
water are compounded by reductions in health programs. We respectfully 
submit that our project is unique and that no other project in the 
Nation has greater needs. Poverty in our service areas is consistently 
deeper than elsewhere in the Nation. Health effects of water borne 
diseases are consistently more prevalent than elsewhere in the Nation, 
due in part to (1) lack of adequate water in the home and (2) poor 
water quality where water is available. Higher incidences of impetigo, 
gastroenteritis, shigellosis, scabies and hepatitis-A are well 
documented on the Indian reservations of the Mni Wiconi Project area. 
At the close of the 20th century one cannot find a region in which 
social and economic conditions are as deplorable. These circumstances 
are summarized in Table 2. Mni Wiconi builds the dignity of many, not 
only though improvement of drinking water, but through employment and 
increased earnings during planning, construction, operation and 
maintenance.

                               TABLE 2.--1990 BUREAU OF CENSUS ECONOMIC STATISTICS                              
----------------------------------------------------------------------------------------------------------------
                                                                                  Families Below                
                    Indian Reservation/State                        Per Capita     Poverty Level   Unemployment 
                                                                      Income         (Percent)       (Percent)  
----------------------------------------------------------------------------------------------------------------
Pine Ridge (Shannon County).....................................          $3,029            59.6            32.7
Rosebud (Todd County)...........................................           4,005            54.4            27.3
Lower Brule (Lyman County)......................................           4,679            45.0            15.7
State of South Dakota...........................................          10,661            11.6             4.2
National........................................................          14,420            10.0             6.3
----------------------------------------------------------------------------------------------------------------

    Financial support for the Indian membership has already been 
subjected to drastic cuts in funding programs through the Bureau of 
Indian Affairs and through Welfare Reform. This project, progressing 
through the budget fighting efforts at the National level, was a source 
of strong hope that would off-set the loss of employment and income in 
other programs and provide for a healthier environment. Tribal leaders 
anticipate that Welfare Reform legislation and other budget cuts 
nation-wide will create a crisis for tribal government when tribal 
members move back to the reservations in order to survive. This 
movement has already started and will create water needs that will more 
than utilize the benefits of the Mni Wiconi Project Act. Public policy 
has resulted in accelerated population growth on the reservations. The 
Act mandates that: ``* * * the United States has a trust responsibility 
to ensure that adequate and safe water supplies are available to meet 
the economic, environmental, water supply and public health needs of 
the Pine Ridge, Rosebud and Lower Brule Indian Reservations * * *.''
    Indian support for this project had not come easily because of the 
historical experience of broken commitments to the Indian people by the 
Federal Government. The argument was that there is no hope and the 
Sioux Tribes would be used to build the non-Indian segments of the 
project and the Indian segments would linger to completion. These 
arguments have been overcome by better planning and an amended 
authorization. It will be difficult to argue that the reduction in 
funding levels proposed in the Administration's budget is not in fact 
the beginning of another broken commitment.
Oglala Sioux Rural Water Supply System within Pine Ridge Indian 
        Reservation
    Table 3 summarizes the status of the Oglala Sioux distribution 
system on the Pine Ridge Indian Reservation. With projects now designed 
and proceeding toward construction award, there are 1,687 services and 
725.9 miles of distribution and service pipelines. These projects will 
be started in fiscal year 1997 and will require fiscal year 1998 
appropriations for completion.

                                TABLE 3.--PROGRESS ON OSRWSS DISTRIBUTION SYSTEM                                
----------------------------------------------------------------------------------------------------------------
                                                                             Rural                              
                                                                          Residential    Mainline   Distribution
         OSRWSS Project                           Status                  Connections    Pipeline     Pipeline  
                                                                            (number)     (miles)       (miles)  
----------------------------------------------------------------------------------------------------------------
White Clay/Wakpamni............  Operating..............................          187         38.8          26.1
Slim Buttes....................  Operating..............................           76         27.5          14.9
Kyle North.....................  Operating..............................           77         15.2          13.1
Kyle to Sharps Corner..........  Operating..............................          107         26.6          17.1
West Boundary..................  Operating..............................            3          6.5           3.0
Manderson Loop I...............  Constructing...........................          106         15.8          26.3
Manderson Loop II..............  Constructing...........................           55         15.2          18.4
Manderson Loop III.............  Construct Start Fiscal Year 1997.......          145          8.1          28.2
Manderson Loop IV..............  Construct Start Fiscal Year 1997.......          100         12.5          20.0
Manderson Loop V...............  Construct Start Fiscal Year 1998.......          100         19.5          15.0
Kyle to Allen..................  Construct Start Fiscal Year 1998.......          171         51.5          19.8
Rockyford to Redshirt..........  Design Start Fiscal Year 1996..........           40         46.2           9.8
Kadoka to Kyle I...............  Design Start Fiscal Year 1996..........           20         20.8          10.0
Kadoka to Kyle II..............  Design Start Fiscal Year 1997..........          500        100.0         100.0
      Totals...................  .......................................        1,687        404.2         321.7
----------------------------------------------------------------------------------------------------------------

West River/Lyman-Jones Rural Water System
    The West River/Lyman-Jones systems have completed their third 
construction season. We are presently serving 417 of the original 2,016 
members signed up. With fiscal year 1997 funds provided by Congress and 
non-federal funding provided by the State of South Dakota and 
individual members, we will extend service to 95 users in the Reliance 
service areas. The requested fiscal year 1998 funding will extend water 
service to 774 locations, 39 percent of our total project membership.
    WR/LJ has now gone as far as we can without water service from the 
OSRWSS core pipeline. The core pipeline is our primary water supply. It 
will replace our interim sources and those communities will in turn 
become users of Mni Wiconi Project water which is of far superior 
quality. As the OSRWSS core pipeline becomes operational, we will 
extend water service to the 13 municipalities and the remaining 1,599 
individual members.

                                 TABLE 4.--PROGRESS ON WR/LJ DISTRIBUTION SYSTEM                                
----------------------------------------------------------------------------------------------------------------
                                                                           Residential    Mainline     Service  
            WR/LJ Service Area                         Status              Connections    Pipeline     Pipeline 
                                                                             (number)     (miles)      (miles)  
----------------------------------------------------------------------------------------------------------------
Creighton................................  Operating.....................           89          179            8
Elbon....................................  Operating.....................          136          274           13
Kadoka...................................  Operating.....................          119          247           11
Grindstone South.........................  Operating.....................           73          128            7
Reliance North and South.................  Construct.....................           95          100            9
Ft. Pierre to Vivian.....................  Design........................           95          118            9
Kennebec North...........................  Design........................           89           97            8
Kennebec South...........................  Design........................           78           92            8
      Totals.............................  ..............................          774        1,235           73
----------------------------------------------------------------------------------------------------------------

Rosebud Sioux Rural Water System
    The past year was memorable one for the people of the Rosebud Sioux 
Reservation. Construction of the Rosebud Sioux Rural Water System began 
in July and the first phase, the He Dog/Upper Cut Meat Project, should 
be in operation this spring. Close to 400 people will benefit from the 
quality water provided by this project. The He Dog day school will also 
have greatly improved fire protection.
    Rosebud has ambitious plans for fiscal year 1997. The Soldier 
Creek/Ring Thunder Project will be bid this month. Construction will 
begin on a second contract in the Mission/Rosebud area this summer. 
These projects serve an area with a design population of 5,000 people. 
Completion of the Mission/Rosebud work will require fiscal year 1998 
funds.
    The remainder of the fiscal year 1998 funds will be used on 
construction of the Rosebud core pipeline north towards Horse Creek, 
White River and Swift Bear. These communities are all suffering from 
serious water problems. The water quality and supply problems in these 
communities are so severe, for Indians and non-Indians alike, that the 
Rosebud Sioux Tribe, West River/Lyman-Jones, and the town of White 
River are exploring ways to cooperatively solve these problems as 
quickly as possible. This Rosebud core pipeline will be extended over 
the course of the next five years to connect with the OSRWSS core line 
when it reaches Murdo in 2002.
Lower Brule Rural Water System
    The Lower Brule Rural Water System has completed its Needs 
Assessment and Water Conservation Plan, thereby meeting the pre-
requisites to use of construction funds. The existing water system 
serving the communities of Lower Brule and West Brule has been turned 
over to the Lower Brule Rural Water System. Discussions are underway 
with West River/Lyman-Jones to construct Phase I of the Lower Brule 
core system from West Brule to Reliance in both fiscal year 1997 and 
fiscal year 1998. The Lower Brule core system will interconnect with 
Phase I of the Lower Brule distribution system, Fort Hale and Lower 
Brule South to be constructed with fiscal year 1998 funds, as well as 
the community of Reliance. The Lower Brule core system from Vivian to 
Presho will be the additional focus of construction in fiscal year 
1998.
    Closing In our testimony above, we described the urgency of this 
year's appropriations caused by an inadequate budget proposed by the 
Administration. We close by asking the Subcommittee to consider 
additional factors:
  --Fiscal Year 1998 is the fifth year of construction. At the 
        conclusion of fiscal year 1997, we will be on schedule for 
        completion in fiscal year 2003;
  --We are on schedule with design of fiscal year 1998 facilities and 
        need the fiscal year 1998 funds to continue ongoing 
        construction contracts and initiate new ones;
  --The following finding of Congress in Public Law 100-516, as 
        amended, underscores the nature of this project relative to 
        others in the fiscal year 1998 budget: ``* * * the United 
        States has a trust responsibility to ensure that adequate and 
        safe water supplies are available to meet the economic, 
        environmental, water supply and public health needs of the Pine 
        Ridge, Rosebud and Lower Brule Indian Reservations * * *.''
    Prepared Statement of Steven G. Oltmans, General Manager, Papio-
               Missouri River Natural Resources District
    The Papio-Missouri River Natural Resources District is a tax 
levying, local subdivision of the State government and is governed by 
an elected board of directors. We have within our borders and 
jurisdiction, over 137 miles of the channelized portion of the Missouri 
River that is in desperate need of restoration and habitat improvement.
    The entire Missouri River Ecosystem has been deteriorating over the 
last several decades. Over 500,000 acres of riverine wetlands, 
backwaters, floodplain forest, prairie and oxbow lake habitat have been 
lost in the 735 mile channelized reach from Sioux City, Iowa to St. 
Louis, Missouri. This loss is directly attributed to the Federal flood 
control and channelization projects on the Missouri River. However, 
recent attempts to restore this disappearing habitat are under way. Two 
of these authorized projects, discussed below, are an effort to return 
portions of this lost habitat to a healthy and productive Missouri 
River System within our lifetime.
The Public Law 99-662 Section 601(a) of the 1986 Water Resources 
        Development Act--Missouri River Fish and Wildlife Mitigation 
        Project.
    This Federal restoration effort for the Missouri River Bank 
Stabilization and Mitigation Project is an ongoing, necessary, and to 
date, very successful undertaking. The Papio-Missouri River Natural 
Resources District has long been a proponent of restoring the fish and 
wildlife habitat within the channelized reach of the Missouri River. 
This Mitigation Project is beginning to show benefits to the entire 
Missouri River System that must continue with an aggressive and 
expanded effort.
    The Papio-Missouri River Natural Resources District is fully aware 
and supportive of the four state (Iowa, Kansas, Missouri, Nebraska) 
fish and wildlife agency's request for increasing the Administration's 
fiscal year 1998 request of $3.895 million. The Corps of Engineers 
estimate of their capability for acquisition and restoration 
construction in fiscal year 1998 is $10.2 million, and therefore we 
strongly urge the Committee to increase the Corps of Engineers funding 
for this Missouri River Bank Stabilization and Navigation Fish and 
Wildlife Mitigation Project to $10 million per year to complete this 
project in a timely manner.
The Public Law 99-662 Section 1135(b) of the 1986 Water Resources 
        Development Act--Project Modifications for Improvement of the 
        Environment.
    This partnership between the Federal Government and a local sponsor 
has been utilized by the Papio-Missouri River Natural Resources 
District to restore and establish the Boyer Chute National Wildlife 
Refuge, and the Hidden Lake/Great Marsh complex in Washington and Sarpy 
Counties, respectively. The Papio-Missouri River NRD has contributed 
nearly 5 million local dollars to these critical restoration projects. 
We've also initiated projects at Lower Decatur Bend and California Bend 
(Burt and Washington Counties) and are planning others as funds are 
available throughout the rest of our Natural Resources District.
    Using this Section 1135 program, the Papio-Missouri Natural 
Resources District has been able to leverage other assets to assist in 
stretching everyone's funds. This unique source of project money does 
much to promote the restoration of this National natural resource.
    A tremendous, Federal/Local and multi-state partnership has 
developed over the last several years called the Back to the River 
initiative. A brochure is included that summarizes the goals, 
achievements and opportunities possible when these partnerships are 
realized. The Section 1135 funding for environmental enhancement along 
the Missouri River, has provided the impetus for this multi-state, 
multi-jurisdictional restoration effort.
    We are therefore very supportive of the 21.175 million dollars that 
are currently in the Administration's budget for 1135 Programs in 
fiscal year 1998.
    The Papio-Missouri River Natural Resources District appreciates the 
opportunity to testify on the appropriations for these two programs. We 
thank the Committee's past support for these crucial environment 
enhancement programs.



       LIST OF WITNESSES, COMMUNICATIONS, AND PREPARED STATEMENTS

                              ----------                              
                                                                   Page
Allard, Hon. Wayne, Senator from Colorado, questions submitted by   291
Allen, David, president, Board of Harbor Commissioners, prepared 
  state- ment....................................................   559
Allen, E.D., chief harbor engineer, Port of Long Beach, CA, 
  prepared statement.............................................   555
Alm, Alvin L., Assistant Secretary for Environmental Management, 
  Environmental Restoration and Waste Management, Department of 
  Energy.........................................................   157
    Prepared statement...........................................   163
American Chemical Society, prepared statement....................   610
American Public Power Association, prepared statement............   607
American Society for Microbiology, prepared statement............   611
Armstrong, Michael D., general manager, Monterey County Water 
  Resources Agency, prepared statement...........................   541
Armstrong, Ron, manager, Port of Gold Beach, OR, prepared 
  statement......................................................   707
Arnold, Bob, commissioner, Frankfort, KY, letter from............   745
Arveschoug, Steve, district general manager, Southeastern 
  Colorado Water Conservancy District, prepared statement........   817

Baber, Jack, president, Reclamation District No. 1004, Colusa, 
  CA, prepared statement.........................................   522
Baker, Kenneth, Acting Director, Office of Nonproliferation and 
  National Security, Atomic Energy Defense Activities, Department 
  of Energy......................................................     1
    Prepared statement...........................................    20
Ballard, Lt. Gen. Joe N., Chief, U.S. Army Corps of Engineers, 
  Corps of Engineers--Civil, Department of the Army, Department 
  of Defense--Civil..............................................   343
    Prepared statement...........................................   358
Barsch, Raymond, general manager, the Reclamation Board, the 
  Resources Agency, State of California, prepared statement......   468
Beasley, David M., Governor, State of South Carolina, prepared 
  statement......................................................   762
Beck, David P., Ph.D., president, Coriell Institute of Medical 
  Research, prepared statement...................................   605
Beier, Keith E., council member, San Diego Area Water Reclamation 
  Program, prepared statement....................................   522
Bein, Robert W., chairman, Water Resources Education Committee, 
  Orange County Business Council, prepared statement.............   519
Beneke, Patricia J., Assistant Secretary of Interior for Water 
  and Science, Bureau of Reclamation, Department of the Interior.   295
    Prepared statement...........................................   299
Bennett, Hon. Robert F., U.S. Senator from Utah, questions 
  submitted by...................................................
  281, 334.......................................................
Bennich, Larry, chairman, Morgan County Commission, Decatur, AL, 
  letter from....................................................   749
Bingham, Nathaniel, habitat director, Pacific Coast Federation of 
  Fishermen's Associations, prepared statement...................   697
Bletsch, Iris Z., chairman, board of directors, Clark County 
  Regional Flood Control District, Las Vegas, NV, prepared 
  statement......................................................   789
Blum, Carl L., deputy director, Department of Public Works, Los 
  Angeles County, CA, prepared statement.........................   488
Borrone, Lillian C., director, Port Commerce Department, Port 
  Authority of New York and New Jersey, prepared statement.......   671
Bransford, Donald, president, Glenn-Colusa Irrigation District, 
  prepared statement.............................................   513
Brescia, Christopher J., president, Midwest Area River Coaltion 
  2000, prepared statement.......................................   806
Bridley, John, waterfront director, city of Santa Barbara, CA, 
  prepared statement.............................................   532
Brinson, J. Ron, president and CEO, Port of New Orleans, New 
  Orleans, LA, prepared statement................................   639
Brown, Cathie, mayor, city of Livermore, CA, prepared statements. 
                                                         569, 812
Brown, Lynne P., associate vice president, Government and 
  community relations, New York University, prepared statement...   603
Bryant, Douglas E., commissioner, South Carolina Department of 
  Health and Environmental Control, prepared statement...........   769
Burns, Hon. Conrad, U.S. Senator from Montana, questions 
  submitted by...................................................
  96, 334, 427...................................................
Bye, Dr. Raymond E., Jr., associate vice president for research, 
  Florida State University, prepared statement...................   590
Byrd, Hon. Robert C., U.S. Senator from West Virginia, questions 
  submitted by...................................................
  286, 430.......................................................
Byrnes, Robert J., mayor, city of Marshall, MN, prepared 
  statement......................................................   795

Cahill, John P., New York Department of Environmental 
  Conservation, prepared statement...............................   668
Campbell, Joseph L., president, Contra Costa Water District, 
  prepared statement.............................................   543
Carey, John P., chief administrative officer, Alabama State Docks 
  Department, Mobile, AL, prepared statement.....................   723
Carr, William, president and chief operating officer, Jim Walter 
  Resources, Inc., letter from...................................   730
Cities of Arcadia and Sierra Madre, CA, prepared statement.......   548
City of Houston, TX, prepared statement..........................   830
City of Huntington Beach, CA, prepared statement.................   545
City of Inglewood, CA, prepared statement........................   530
City of Miami Beach, FL, prepared statement......................   761
City of Newport Beach, CA, prepared statement....................   545
City of Sacramento, CA, prepared statement.......................   527
Clemens, Ralph O., Jr., president, Coosa-Alabama River 
  Improvement Association, prepared statement....................   716
Collins, Father T. Byron, S.J., special assistant to the 
  President, Georgetown University, prepared statement...........   611
Colorado River Basin Salinity Control Forum, prepared statement..   570
Columbia River Inter-Tribal Fish Commission, prepared statement..   689
Combs, Larry T., county administrative officer, county of Sutter, 
  CA, prepared statement.........................................   534
Contra Costa County Board of Supervisors, Contra Costa County, 
  CA, prepared statement.........................................   554
Corbin, Hon. Rosemary, mayor, city of Richmond, CA, prepared 
  statement......................................................   561
County of San Joaquin, CA, prepared statement....................   477
Cox, Ralph, maritime director, Massachusetts Port Authority, 
  prepared statement.............................................   666
Crabtree, Russ, port manager, Port of Brookings Harbor, OR, 
  prepared statement.............................................   706
Craig, Hon. Larry, U.S. Senator from Idaho, questions submitted 
  by.............................................................    99
Creswell, Robert M., consultant, Camden, AL, prepared statement..   723
Crow Creek Sioux Rural Water System, prepared statement..........   844
Crowe, John B., executive vice president/general manager, Alabama 
  River Pulp Company, Inc., prepared statement...................   722
Curry, Darrel G., vice president, Missouri River Bank 
  Stabilization Association, prepared statement..................   791

Dal Gallo, Frank, president, the Reclamation Board, the Resources 
  Agency, State of California, prepared statement................   468
Dansby, Ronald C., president, inland division, Kirby Corp., 
  letter from....................................................   729
Darnley, James H., Jr., regional vice president, Port of Mobile, 
  prepared statement.............................................   737
Day, Thomas E., secretary, Tennessee Tombigbee Waterway 
  Development Council, prepared statement........................   754
DeCosmo, James M., manager of lands, research and procurement, 
  Southeast Timberlands, prepared statement......................   721
Delesdernier, Capt. Mark, Jr., president, Crescent River Port 
  Pilots Association, prepared statement.........................   638
Department of Water and Power, city of Los Angeles, CA, prepared 
  statement......................................................   484
Detchon, B. Reid, executive director, Biomass Energy Advocates, 
  prepared statement.............................................   627
Domenici, Hon. Pete V., U.S. Senator from New Mexico:
    Prepared statement...........................................   297
    Questions submitted by.......................................
      58, 261, 318, 385..........................................
Donner, Al, director, public affairs, Contra Costa Water 
  District, prepared statement...................................   543
Doom, Gary K., director, marketing and transportation, RECO 
  Transportation, Inc., prepared statement.......................   753
Dorgan, Hon. Byron, U.S. Senator from North Dakota:
    Prepared statement...........................................   308
    Questions submitted by.......................................
      100, 339, 447..............................................
Dorlon, H.P., Jr., regional manager, sales and operations, Vulcan 
  Materials Co., prepared statement..............................   757
Duffy, George E., chairman, Governor's Task Force on Maritime 
  Industry, prepared statement...................................   629
Dunlap, Jim, board member, New Mexico Rural Water Association, 
  prepared statement.............................................   784
DuPont, Alvin P., mayor, city of Tuscaloosa, AL, prepared 
  statement......................................................   738
Dyer, William H., president, Tennessee Valley Towing, Inc., 
  prepared statement.............................................   754

East Bay Municipal Utility District, prepared statement..........   529
Eichblatt, Robert E., city engineer, city of Huntington Beach, 
  CA, prepared statement.........................................   535
Etchart, John, chairman, Northwest Power Planning Council, 
  prepared statement.............................................   684
Etheredge, Roy F., senior vice president, Alabama Gas Corp., 
  letter from....................................................   728

Falgout, Ted M., executive director, Port Fourchon, LA, prepared 
  statement......................................................   652
Fannon, Jimmy, mayor, city of Columbus, MS.......................   758
Felty, Billy J., chief engineer, St. Francis Levee District, 
  Arkansas, prepared statement...................................   657
Fickewirth, Walter, chairman, Placer County Water Agency, 
  prepared statement.............................................   483
Ford, Charleigh D., Jr., executive director, Columbia-Lowndes 
  Economic Development Association, letter from..................   755
Foss, Brian E., port director, Santa Cruz Port, prepared 
  statement......................................................   549
Foster, Gov. Murphy J. ``Mike'', on behalf of the Louisiana 
  Department of Transportation and Development, Public Works and 
  Flood Control Directorate, prepared statements.................
  659, 662.......................................................
Fraser, Gale Wm., II, P.E., general manager/chief engineer, Clark 
  County Regional Flood Control District, Las Vegas, NV, prepared 
  statement......................................................   789
Frasher, Stephen A., senior vice president, operations, Red 
  Circle Transport Co., letter from..............................   735
Fratt, John, executive director, Port of Kalama, WA, prepared 
  statement......................................................   699
Fuhrman, Maj. Gen. Russell L., Director of Civil Works, U.S. Army 
  Corps of Engineers, Corps of Engineers--Civil, Department of 
  the Army, Department of Defense--Civil, prepared statement.....   343
Fulstone, Richard, chairman, Walker River Basin Water Users 
  Association, prepared statement................................   534

Gammage, Grady, Jr., president, board of directors, Central 
  Arizona Water Conservation District, prepared statement........   780
Gargano, Hon. Charles A., chairman and CEO, State of New York, 
  Empire State Development Corporation, prepared statement.......   671
Geiger, Dave, Pacific Salmon Program Manger, Corps of Engineers--
  Civil, Department of the Army, Department of Defense, prepared 
  statement......................................................   105
George, Bruce, manager, Kaweah Delta Water Conservation District, 
  prepared statement.............................................   486
George, Father William L., S.J., special assistant to the 
  President, Georgetown University, prepared statement...........   611
George, Randall L., president, Montgomery Area Chamber of 
  Commerce, letter from..........................................   719
Geringer, Hon. Jim, Governor, State of Wyoming, prepared 
  statement......................................................   574
Giari, Mike, executive director, port of Redwood City, CA, 
  prepared statement.............................................   549
Gieringer, Wallace A., chairman, Arkansas River Basin Interstate 
  Committee, prepared statement..................................   816
Giordano, Clyde A., parish president, Plaquemines Parish 
  Government, Belle Chasse, LA, prepared statement...............   640
Godfrey, Jim, vice president, Tennessee Farmers Cooperative, 
  letter from....................................................   744
Gorton, Hon. Slade, U.S. Senator from Washington, questions 
  submitted by...................................................
  278, 426.......................................................
Grebbien, Virginia, general manager, West Basin Municipal Water 
  District and Central Basin Municipal Water District, prepared 
  statement......................................................   514
Griffin, Brig. Gen. Robert, Commander, Northwest Division, Corps 
  of Engineers--Civil, Department of the Army, Department of 
  Defense........................................................   105
    Prepared statement...........................................   117
Groseclose, Bernard S., Jr., president and CEO, South Carolina 
  State Ports Authority, letter from.............................   765
Guthans, R.A., president, Midstream Fuel Service, Inc., prepared 
  statement......................................................   733

Haak, Norman, chairman, Garrison Diversion Conservancy District, 
  prepared statement.............................................   843
Hague, Jane, council chair, Metropolitan King County Council, WA, 
  prepared statement.............................................   712
Hall, Steve, executive director, Association of California Water 
  Agencies on behalf of the California Bay-Delta Water Coalition, 
  prepared statement.............................................   473
Hammer, Susan, mayor, city of San Jose, CA, prepared statement...   518
Hammond, Chuck, city of Fairfield, CA, prepared statement........   539
Hanke, Byron, executive director, Port of Vancouver, WA, prepared 
  state- ment....................................................   705
Hardy, Randall, Administrator, Bonneville Power Administration, 
  Department of Energy...........................................   105
    Prepared statement...........................................   111
Harmon, Jerry C., council member, San Diego Area Water 
  Reclamation Program, prepared statement........................   522
Harrington, Joseph W., mayor, city of Valley Park, Valley Park, 
  MO, prepared statement.........................................   805
Haun, Charles A., executive vice president, Parker Towing Co., 
  Inc., prepared statement.......................................   754
Hayden, Channing F., Jr., president, New Orleans Steamship 
  Association, prepared statement................................   634
Henry, Robert F., Jr., president, Robert F. Henry Tile Co., Inc., 
  prepared statement.............................................   722
Herbert, John B., president, and Thomas C. Herbert, Sr., vice 
  president, Herbert SanGravl Co.:
    Letter from..................................................   750
    Prepared statement...........................................   758
Hess, William H., sales manager, Parker Towing Co., Inc., letter 
  from...........................................................   748
Hewgley, James M., Jr., chairman, Arkansas River Basin Interstate 
  Committee, prepared statement..................................   822
Hogan, Max, mayor, city of West Jordon, UT, prepared statements.. 
                                                         566, 809
Holland, G. Edison ``Ed'', Jr., vice president, power generation/
  transmission and corporate counsel, Gulf Power Co., prepared 
  statement......................................................   730
Hollings, Hon. Ernest F., U.S. Senator from South Carolina, 
  questions submitted by.........................................   435
Holman, Gerald H., chairman, Arkansas River Basin Interstate 
  Committee, prepared statement..................................   819
Holman, Gerald, senior vice president, Wichita Area Chamber of 
  Commerce, and chairman, Arkansas River Basin Interstate 
  Committee, prepared statement..................................   814
Holmes, Marc, director, Partnership for the San Pablo Baylands, 
  prepared statement.............................................   533
Hommrich, J. Richard, president, Volunteer Barge & Transport, 
  Inc., letter from..............................................   749
Horiuchi, Randy, commissioner, Salt Lake County, UT, prepared 
  statement......................................................   563
Howson, David G., vice president-general manager, river district, 
  Martin Marietta Aggregates, prepared statement.................   731
Hrabovsky, Leon, superintendent, Mike Hooks, Inc., prepared 
  statement......................................................   733
Hubbard, Peter E., senior vice president, sales and marketing, 
  Midland Enterprises, Inc., prepared statement..................   732

Integrated Petroleum Environmental Consortium, prepared statement   597
Iowa Department of Natural Resources, prepared statement.........
                                                         800, 839
Irvine Co., Newport Beach, CA, prepared statement................   544
Israel, Keith, general manager, Monterey Regional Water Pollution 
  Control Agency, prepared statement.............................   540

James, Fob, Jr., Governor, State of Alabama, prepared statement..   751
James, Sharpe, mayor, city of Newark, NJ, prepared statement.....   670
Jenkins, David, president, Trinity River Authority of Texas, 
  prepared statement.............................................   828
Jollivette, Cyrus M., vice president for Government relations, 
  University of Miami, prepared statement........................   601
Jones, Jan, executive director, Tennessee River Valley 
  Association, prepared statement................................   740
Jordan, D.R., president, Jordan Pile Driving, Inc., prepared 
  statement......................................................   731
Jordan, James T., director, J.T. Jordan Cotton, Inc., letter from   720
Joseph, W.F., chairman, Montgomery County Commission, Montgomery, 
  AL, prepared statement.........................................   722

Kaiser, Charles F., president, board of directors, Twentynine 
  Palms Water District, prepared statements......................
  521, 547.......................................................
Kansas Department of Wildlife and Parks, prepared statement......
                                                         800, 839
Kendall, Donald R., Ph.D., P.E., general manager, Calleguas 
  Municipal Water District, prepared statement...................   493
Keyes, John, Regional Director, Bureau of Reclamation, Pacific 
  Northwest Division Region, prepared statement..................   105
Kido, Wendell H., plant manager, Sacramento Regional Wastewater 
  Treatment Plant, prepared statement............................   548
Kimble, Jay L., mayor, city of Stillwater, MN, prepared statement   792
King, T. Keith, P.E., president, CEO, David Volkert & Associates, 
  Inc., prepared statement.......................................   738
Klass, Dr. Donald L., president, Biomass Energy Research 
  Association, prepared statement................................   577
Knoy, Mark K., senior vice president, marketing and operations, 
  Marine Equipment Management Corp. [MEMCO], prepared statement..   731
Kornegay, H. Thomas, executive director, Port of Houston 
  Authority, prepared statement..................................   836
Kriege, Daniel F., chairman, California Water Commission, 
  prepared statement.............................................   453
Krygsman, Alexander, port director, Port of Stockton, CA, 
  prepared statement.............................................   559

Lake Superior Authority, prepared statement......................   681
Lancaster, H. Martin, Assistant Secretary of the Army for Civil 
  Works, Corps of Engineers--Civil, Department of the Army, 
  Department of Defense--Civil...................................   343
    Prepared statement...........................................   346
Lane, Leamon, general manager, R&W Marine, Inc., prepared 
  statement......................................................   744
LaPlace, Aubrey J., president, board of commissioners, 
  Pontchartrain Levee District, prepared statements..............
  657, 659.......................................................
Lautenberg, Hon. Frank R., U.S. Senator from New Jersey, 
  questions submitted by.........................................   290
Lea, Dennis R., superintendent, Valley Park School District, 
  Valley Park, MO, letter from...................................   805
Leavitt, Keith, ports division manager, Oregon Economic 
  Development Department, prepared statement.....................   692
Lee, Dr. Bernard, president, Institute of Gas Technology, 
  prepared state- ment...........................................   582
Levine, John, Jr., president, Associated Branch Pilots, prepared 
  statement......................................................   638
Lewis, William P., general manager, U.S. Steel Group, prepared 
  statement......................................................   738
Lopez, Gaye, manager, Colusa Basin Drainage District, prepared 
  statement......................................................   522
Los Angeles County Drainage Area Alliance, prepared statement....   547
Loveless, Ralph L., executive vice president and general manager, 
  Meriwether Lewis Electric Cooperative, letter from.............   747
Lowe, A. Lynn, president, Red River Valley Association, prepared 
  statement......................................................   641
Ludwig, James C., president, domestic sales, Drummond Coal Sales, 
  Inc., prepared statement.......................................   729
Lyon, Dick, mayor, city of Oceanside, CA, prepared statements....
                                                    478, 536, 537

Mackey, Hon. Karan, member, county board of supervisors, Lake 
  County, CA, prepared statements................................
  532, 546.......................................................
Mann, Donald G., general manager, Port of Newport, OR, prepared 
  statement......................................................   708
Marker, Sandra Y., mayor, town of Corte Madera, CA, prepared 
  statements.....................................................
  538, 544.......................................................
Marlowe, Howard, president, American Coastal Coalition, prepared 
  statement......................................................   760
Martinez, Eluid L., Commissioner, Bureau of Reclamation, 
  Department of the Interior.....................................   295
    Prepared statement...........................................   302
Mauderly, Joe L., senior scientist and director of external 
  affairs, the Lovelace Respiratory Research Institute, prepared 
  statement......................................................   594
McCrory, Robert L., professor and director, Laboratory for Laser 
  Energetics, University of Rochester, prepared statement........   584
McDonough, Frank M., director, maritime resources, State of New 
  Jersey, Department of Commerce and Economic Development, 
  prepared state- ment...........................................   671
McKee, Frank, letter from........................................   746
McKinzey, W.R., Jr., mayor, city of Aliceville, AL, prepared 
  statement......................................................   757
McTaggart, John, mayor, city of Rancho Palos Verdes, CA, prepared 
  statement......................................................   531
Meissner, Katherine Gong, city clerk, city of Stockton, CA, 
  prepared statement.............................................   487
Melton, Carlton J., vice president, SSA Mississippi River System, 
  letter from....................................................   755
Merrihew, Lawrence L., vice president, Regions Bank, prepared 
  statements.....................................................
  736, 756.......................................................
Metropolitan Water District of Southern California, prepared 
  statement......................................................   524
Meunier, Wayne, port director, Paducah-McCracken County Riverport 
  Authority, prepared statement..................................   753
Miller, George, mayor, city of Tucson, AZ, prepared statement....   774
Miller, Louise, council vice chair, Metropolitan King County 
  Council, WA, prepared statement................................   712
Minsky, Reynold S., president, board of commissioners, Fifth 
  Louisiana Levee District, prepared statement...................   665
Missouri Department of Conservation, prepared statement..........
                                                         800, 839
Mni Wiconi Project, South Dakota, prepared statement.............   851
Moore, Ted, executive director, Humphreys County E.D.C., prepared 
  statement......................................................   756
Morgan, Sheldon L., Warrior-Tombigbee Development Association, 
  prepared statement.............................................   724
Morton, Donald L., M.D., president, John Wayne Cancer Institute, 
  Saint John's Hospital and Health Center, Santa Monica, CA, 
  prepared state- ment...........................................   592
Murray, Hon. Patty, U.S. Senator from Washington, questions 
  submitted by...................................................
  289, 338, 436..................................................

Navajo Nation, prepared statement................................   788
Nebraska Game and Parks, prepared statement......................
  800, 839.......................................................
Nelson, Ron, secretary-manager, Central Oregon Irrigation 
  District, letter from..........................................   710
Noble, Vernon A., chairman, Green Brook Flood Control Commission, 
  prepared statement.............................................   674
Novak, Cathy, mayor, city of Morro Bay, CA, prepared statement...   531

O'Brien, Terrence J., Metropolitan Water Reclamation District of 
  Greater Chicago, prepared statement............................   826
Ojard, Adolph N., president, Warrior & Gulf Navigation Co., and 
  vice chairman, maritime affairs, Mobile Area Chamber of 
  Commerce, prepared statements..................................
  733, 739.......................................................
Oltmans, Steven G., general manager, Papio-Missouri River Natural 
  Resources District, prepared statement.........................   857
Owsley, Charles E., P.E., city engineer, Public Works Department, 
  Kansas City, MO, prepared statement............................   813
Owsley, Charles E., president, Missouri-Arkansas River Basins 
  Association, prepared statement................................   809

Pace, W.O., chairman, Autauga County Commission, letter from.....   719
Palmer, R. Barry, executive director, Association for the 
  Development of Inland Navigation in America's Ohio Valley, 
  prepared statement.............................................   678
Parson, Richard W., dredging program manager, Ventura Port 
  District, prepared statement...................................   560
Peebles, Sara, director, Industrial Board of Pickens County, AL, 
  letter from....................................................   752
Perkins, Mitch, director, South Carolina State Budget and Control 
  Board, prepared statement......................................   770
Peterson, J.M., president, Missouri River Bank Stabilization 
  Association, prepared statement................................   791
Peterson, R. Max, executive vice president, International 
  Association of Fish and Wildlife Agencies, prepared statement..   572
Pfeifle, Kurt, general manager, Mid-Dakota Rural Water System, 
  Inc., prepared statement.......................................   847
Pflueger, Frank, president, Ag Distributors, Inc., letter from...   746
Poundstone, Emery, president, Reclamation District No. 108, 
  prepared statement.............................................   500
Price, Julian, mayor, city of Decatur, AL, letter from...........   748
Price, Louis E., mayor, city of Scottsboro, AL, letter from......   749
Pruitt, Gary K., executive director, Greater Baton Rouge Port 
  Commission, prepared statement.................................   640
Public Works Department, city of Tracy, CA, prepared statement...   482

Rail, David, councilmember, city of Provo, UT, prepared 
  statements.....................................................
  568, 811.......................................................
Reid, Hon. Harry, U.S. Senator from Nevada, questions submitted 
  by.............................................................
  97, 336, 430...................................................
Reis, Dr. Victor, Assistant Secretary for Defense Programs, 
  Atomic Energy Defense Activities, Department of Energy.........     1
    Prepared statement...........................................     6
Riley, Ronnie A., vice president, Lower Mississippi Valley Flood 
  Control Association, prepared statement........................   653
Rippey, Mike, chairman, board of supervisors, Napa River Flood 
  Control Project, prepared statement............................   511
Riverside County Flood Control and Water Conservation District, 
  Board of Supervisors, prepared statement.......................   490
Robinson, C. Paul, director, Sandia National Laboratories, 
  prepared statement.............................................   614
Romer, Gov. Roy, State of Colorado, letter from..................   562
Royall, Robert V., Jr., secretary, South Carolina Department of 
  Commerce, prepared statement...................................   766
Ruiz, Irwin A., executive director, St. Bernard Port, harbor and 
  terminal district, Chalmette, LA, prepared statement...........   640
Ryerson, Penny, port manager, Port of Toledo, OR, prepared 
  statement......................................................   680

San Diego, CA, Water Reclamation Program, prepared statement.....   479
San Joaquin Area Flood Control Agency, prepared statement........   544
Sanchez, Sig, chair, board of directors, Santa Clara Valley Water 
  District, prepared statement...................................   501
Sanders, Charles J., III, president, Ingram Materials Co., letter 
  from...........................................................   747
Sanguinetti, Phillip A., president, the Anniston Star, letter 
  from...........................................................   720
Santa Ana Watershed Project Authority [SAWPA], prepared statement   523
Saunders, Andrew A., Jr., chairman, CEO, Saunders Engine Co., 
  Inc., prepared statement.......................................   736
Seiber, Dr. James, Nevada project director, Department of Energy 
  Experimental Program to Stimulate Competititve Research, 
  prepared statement.............................................   606
Serna, Joe, Jr., mayor, city of Sacramento, CA, prepared 
  statement......................................................   475
Sherrill, Lynn, vice president of operations, Crounse Corp., 
  prepared statement.............................................   728
Shields, Caleb, chairman, Assiniboine and Sioux Tribes of the 
  Fort Peck Reservation, prepared statement......................   711
Sims, Ron, King County executive, Metropolitan King County 
  Council, WA, prepared statement................................   712
Skaggs, Gary, chairman, Trinity River Steering Committee, North 
  Central Texas Council of Governments, prepared statement.......   833
Skidmore, David, prepared statement..............................   575
Smith, Harold, Assistant to the Secretary of Defense for Nuclear, 
  Chemical, and Biological Programs, Atomic Energy Defense 
  Activities, Department of Energy...............................     1
    Prepared statement...........................................    28
Speck, Jack P., manager, U.S. South Export Fiber Supply and 
  Marketing, Weyerhaeuser, prepared statement....................   740
Standing Rock Sioux Tribe, prepared statement....................   841
Stapleton, Maureen A., general manager, San Diego County Water 
  Authority, prepared statement..................................   517
Stefenhagen, Gordon, mayor, city of Norwalk, CA, letter from.....   520
Stewart, Jerry L., vice president, fuel services, Southern 
  Company Services, Inc., prepared statement.....................   737
Svendson, Douglass W., Jr., executive director, Gulf Intracoastal 
  Canal Association, prepared statement..........................   830
Symington, Gov. Fife, State of Arizona, prepared statement.......   777

Tarasevich, David J., president and CEO, Tuscaloosa Steel, 
  prepared statement.............................................   753
Thorne, Mike, executive director, Port of Portland, OR, prepared 
  statement......................................................   702
Timmerman, James A., Jr., Ph.D., director, South Carolina 
  Department of Natural Resources, prepared statement............   767

Upper Mississippi River Basin Association, prepared statement....   801

Vanderpool, R. Todd, president, Columbus Deposit Guaranty 
  National Bank, prepared statement..............................   754
Vann, James A., Jr., president and chief executive officer, 
  Alabama Electric Cooperative, Inc., prepared statement.........   727
Vanselow, Glenn, executive director, Pacific Northwest Waterways 
  Association, prepared statement................................   693
Velehradsky, John, Director of Engineering and Technical 
  Services, Corps of Engineers--Civil, Department of the Army, 
  Department of Defense, prepared statement......................   105
Volante, Anthony C., president, board of directors, Port Hueneme 
  Water Agency, prepared statement...............................   497

Waldon, Donald G., administrator, Tennessee-Tombigbee Waterway 
  Development Authority, prepared statement......................   750
Wallace, Jamie D., president, Salma and Dallas County Chamber of 
  Commerce, letter from..........................................   720
Wanamaker, James E., chief engineer, Board of Mississippi Levee 
  Commissioners, prepared statement..............................   654
Wayne, Michael A., chairman, John Wayne Cancer Institute, Saint 
  John's Hospital and Health Center, Santa Monica, CA, prepared 
  statement......................................................   592
Wehe, David K., professor, University of Michigan, prepared 
  statement......................................................   587
Wheeler, K., vice president, Orgulf Transport Co, letter from....   745
Wheeler, Ken A., president, R&W Marine, Inc., letter from........   734
White, Dean, port captain, Orsouth Transport Co., letter from....   734
Wicke, W. Ben, president, Elsinore Valley Municipal Water 
  District, prepared statement...................................   492
Willcox, George A., general manager, Chambers-Liberty Counties 
  Navigation District, prepared statement........................   833
Willey, Zach, senior economist, Environmental Defense Fund, 
  prepared statement.............................................   714
Williams, M.V., president, West Tennessee Tributaries 
  Association, prepared statement................................   655
Williams, Peter, general manager, Port of St. Helens, OR, 
  prepared statement.............................................   701
Wilson, Thomas W., supervisor, fifth district, Orange County Hall 
  of Administration, Sana Ana, CA, prepared statement............   536
Wisniewski, Stan, director, County of Los Angeles Department of 
  Beaches and Harbors, Marina del Rey, CA, prepared statement....   551
Wong, Leland, president, Los Angeles Board of Harbor 
  Commissioners for the Port of Los Angeles, prepared statement..   552
Woodell, Gregory, president, American Shore and Beach 
  Preservation Association, prepared statement...................   758
World Wildlife Fund, prepared statement..........................   675

Yuba County Water Agency, prepared statement.....................   485

Zaun, William L., chief engineer, Orange County Flood Control 
  District, prepared statement...................................   507
Zieschang, Ernie, president, Port of Liberty Commission, prepared 
  state- ment....................................................   829
Zimmerman, Gerald R., executive director, Colorado River Board of 
  California, Glendale, CA, prepared statement...................   569



                             SUBJECT INDEX

                              ----------                              

                      DEPARTMENT OF DEFENSE--CIVIL

                         Department of the Army

                       Corps of Engineers--Civil

                                                                   Page
Available resources, reprogramming of............................   345
Civil Works Program, level of....................................   375
Columbia River fish mitigation, OR and WA........................   345
Corps division structure.........................................   356
Endangered Species Act:
    On levee maintenance and repair, impact of...................   372
    Waiver.......................................................   374
Fiscal year 1997 emergency flood supplemental....................   344
Fiscal year 1998:
    Budget request...............................................   344
    Civil works program..........................................   357
Fox River Locks, WI..............................................   369
Full funding:
    Impact of....................................................   383
    On helping communities, impact of............................   379
Greenbrier River flood warning system............................   382
Idaho flooding, recent...........................................   370
Lafarge Dam, WI..................................................   369
Levee maintenance requirements...................................   372
Marmet Lock and Dam..............................................   380
Mitigation requirements..........................................   374
New Army Corps team..............................................   368
New construction, full funding of................................   376
New water projects, full funding of..............................   343
Progress, informing Congress of..................................   377
Projects, fate of large..........................................   379
Reprogramming procedures.........................................   384
Work force size..................................................   357
WRDA 96, full funding of.........................................   378

                          DEPARTMENT OF ENERGY

                    Atomic Energy Defense Activities

Accelerated strategic computing initiative [ASCI]................     5
Advanced experimental capabilities...............................     5
Aging stockpile..................................................    48
Annual:
    Certification process........................................    41
    Nuclear weapons stockpile....................................    27
        Certification............................................    32
B-61 strategic bomb, modification of the.........................     4
Chemical and Biological Nonproliferation Program.................    19
Chemical and biological weapons, detection of....................    26
Chemical, biological, and nuclear weapons, detection of..........    38
Commercial light water reactor...................................    54
Core research and advance technology programs....................    47
Defense programs:
    Funding......................................................    48
    Mission......................................................     3
Defense asset acquisition account................................    49
Device assembly facility.........................................
  39, 40.........................................................
DOE and DOD, relationship between................................    43
DOE's budget request, adequacy of................................    42
Dual axis radiographic hydrodynamic test facility................    48
Fiscal year 1998 budget program..................................     1
Initiatives for proliferation prevention [IPP]...................
  18, 24.........................................................
Land mines, detection of.........................................    37
Los Alamos National Laboratory...................................    44
    New Director at..............................................    44
Major accomplishments............................................     5
Manufacturing and production capability..........................    43
Material protection, control, and accounting.....................
    Nuclear......................................................    40
National Environmental Policy Act................................    51
    DOD views of.................................................    51
National ignition facility.......................................    49
NATO expansion...................................................    41
Nonproliferation:
    Activities...................................................    32
    Chemical and biological weapons..............................
      24, 45.....................................................
Nuclear weapons:
    Dismantlement of.............................................    27
    Scientists...................................................    33
    Stockpile annual certification...............................     3
Other key programs...............................................    19
Our successes and planned activities.............................    16
Spent Fuel Program in North Korea................................    46
Stockpile Life Extension Program [SLEP]..........................     3
Stockpile reliability, maintaining...............................    33
Stockpile Stewardship and Management Program.....................
  34, 41.........................................................
Subcritical tests................................................    36
Treaty monitoring and proliferation detection....................    45
Tritium:
    Accelerator production of....................................    54
    Production...................................................    54
    Requirements.................................................    57
    Supply.......................................................     5
Underground nuclear testing, capability to return to.............    35

                    Bonneville Power Administration

Bonneville Power outside the Northwest, marketing................   145
Bonneville, privatization of.....................................   139
Bonneville-related legislation...................................   143
Challenges:
    Additional...................................................   110
    Future.......................................................   109
Competition, legislation on......................................   150
Competitive pressure, BPA's response to..........................   108
Concerns, public purpose.........................................   144
Corps Northwest division location................................   134
Cost recovery....................................................   135
Costs:
    Fish and wildlife............................................   132
    Future fish..................................................   142
    Stranded.....................................................   133
Exchange rates, residential......................................   137
Federal Treasury, debt to the....................................   132
Fish and wildlife projects, amendment on.........................   154
Grid operator, independent.......................................   134
Hydroelectric activities, direct funding of......................   140
Hydropower activities, direct funding of.........................   115
INDEGO participation.............................................   129
John Day Dam drawdown............................................   152
John Day Reservoir drawdown......................................   116
Lower Snake River drawdown studies...............................   116
Memorandum of agreement extension................................   148
Power rates, reduction of........................................   149
Power, alternative sources of....................................   153
Programs, fish and wildlife......................................   106
Regional:
    Power system review..........................................   106
    Rates versus national average................................   146
    Review, focus of.............................................   109
Retail competition...............................................   150
Separation problems and issues...................................   130
Stranded cost definition.........................................   151
Transmission and marketing operations, separation of.............   128
Transmission operations and maintenance costs....................   136
Water, acquisition of............................................   138
Watershed restoration projects...................................   147
WPPS's debt refinancing..........................................   145

             Environmental Restoration and Waste Management

Advanced mixed waste treatment facility..........................   191
DOE's compliance documents, EPA's review of......................   188
Fiscal year 1998 budget..........................................   161
Formerly Utilized Sites Remedial Action Program..................
  181, 258.......................................................
General Accounting Office report.................................   256
Ground water issue, Beatty, NV...................................   182
Idaho agreement..................................................   192
Milestones, compliance and rolling...............................   194
Office of Environmental Management staff.........................   183
Pit 9 cleanup problems...........................................   190
Privatization....................................................
  162, 254.......................................................
    Budget and cleanup progress..................................   227
    Oversight....................................................   182
Program challenges...............................................   161
Risk concerns and the 10-year plan...............................   185
Rocky Flats 10-year plan.........................................   184
Technology deployment and regulatory structure...................   192
Technology deployment initiative.................................
  183, 191.......................................................
Ten-year plan....................................................   162
Verification.....................................................   254
Waste isolation pilot plant......................................
  187, 258.......................................................
Waste isolation pilot project, opening of........................   189

                       DEPARTMENT OF THE INTERIOR

                         Bureau of Reclamation

Animas-La Plata project..........................................
  306, 311, 313..................................................
    Impacts of deauthorizing.....................................   316
Bear River and Bear Lake drainage................................   312
California Bay-Delta.............................................   298
    Ecosystem restoration........................................   317
Central Utah project.............................................   298
Davils Lake, water level at......................................   308
Fiscal year 1998:
    New starts...................................................   314
    Resources....................................................   316
Flood damage reduction...........................................   315
1998 budget request, summary of..................................   301
Programs, other priority.........................................   298
Water development................................................   305
Western Water Policy Review Commission...........................
  312, 317.......................................................